The Economy

Seema Malhotra Excerpts

Thursday 4th June 2015 Commons Chamber

[Chris Leslie]

Of course individual choices have to be made, but it would be better if they were made on the basis of need and evidence, not simply on whether the hon. Gentleman has the ear of a particular Minister at a particular point in time. That is the old way to plan infrastructure, and he knows in his heart that we should reform it.

The choices that the Chancellor makes in the emergency Budget in July will be crucial for productivity and therefore crucial to the health of the economy and public finances. I want to know whether the Chancellor will set out a sensible approach to deficit reduction by prioritising the areas of public spending that raise productivity. Why do we not ask the OBR to report on how the options for the spending review might impact on productivity and living standards and to set out the impact of the different choices that the Chancellor could make? He will have our support if he wants it to do that work. As the OECD suggested yesterday, the uneven profile of his planned fiscal pathway poses real risks, and higher productivity would give greater scope to protect working families, while still balancing the books. So these are the choices that he must confront. Is he still planning to double the pace of cuts, regardless of the impact on productivity, or is he now planning to moderate that pathway? The Chancellor has wiggle room here, even within his own fiscal rules.

[Seema Malhotra (Feltham and Heston) (Lab/Co-op)]

I thank my hon. Friend for giving way. He is making an excellent speech. I want to follow up on a point made by my hon. Friend the Member for Huddersfield (Mr Sheerman). According to the CMI report, leadership and management are a key issue for this country, and we have seen nothing in government strategy on that issue. How much does my hon. Friend think that that should also be part of our review of why we have such problems with productivity in this country?

[Chris Leslie]

This is at the heart of the Chancellor’s policy choices. Is he looking not just at how much but how spending is taking place? He can choose to ensure that where spending has to be prioritised decisions lean towards supporting growth and productivity and the skills that will in turn get us into that more virtuous cycle.

Finance (No. 2) Bill

Seema Malhotra Excerpts

Wednesday 25th March 2015 Commons Chamber

We already have the lowest rate of corporation tax in Europe, but we also have the most expensive property tax. That is why it makes no sense for the Government to make it a priority to cut a tax that is already among the most competitive, but not help smaller firms with very large costs.

[Seema Malhotra (Feltham and Heston) (Lab/Co-op)]

Does my hon. Friend agree that supporting small businesses, developing skills and apprenticeships and cutting tuition fees, which is what a Labour Government would do, would also benefit large corporations? We need broader measures that work in the interests of the whole economy.

[Shabana Mahmood]

My hon. Friend is absolutely right and her point takes us back to our earlier debate about the value of the headline rate of corporation tax and the policy environment that supports it.

Clearly, more needs to be done on the business rates regime. We back the announcement of a review of business rates. There are problems in the system. For example, a factory investing in a new piece of equipment will find that its bill will go up next year because property is now worth more, which could be a disincentive to invest. Although our corporate property tax system needs to be fundamentally rethought, small businesses need urgent and immediate relief. Our proposal for a cut in business rates in the first year of the next Parliament, followed by a freeze in the second year, will make a genuine difference. I hope that Government Members will today take the opportunity that they have failed to take previously, support our amendment and thereby show their support for small and medium-sized businesses.

Oral Answers to Questions

Seema Malhotra Excerpts

Tuesday 2nd September 2014 Commons Chamber

[Mr Osborne]

I very much agree with my hon. Friend. The university technical colleges have been a real boost to technical education in our education system, and I know that there are ambitious proposals in Leeds. Indeed, I think, from memory, that one has just been given the go-ahead in Leeds. But I would also say that the apprenticeship scheme has been very successful. Working with myself and the Business Secretary, more than 2 million apprenticeships have been provided. We want to see more of those provided, so that young people have the skills to take the opportunities that the economy is now providing them.

[Seema Malhotra (Feltham and Heston) (Lab/Co-op)]

Does the Chancellor regret that under his watch the number of young people staying on jobseeker’s allowance for more than 12 months has risen by more than 46%? Is it not now time for Labour’s compulsory jobs guarantee to ensure that young people are not left behind?

[Mr Osborne]

Interestingly, a lot of Labour MPs have regularly asked about long-term youth unemployment during Treasury questions over the past couple of years. I bring that up because the hon. Lady asks about this, but long-term youth unemployment is now lower than it was when this Government came to office. We heard a lot of complaints about long-term youth unemployment over the past two years, so let us have some Labour Members congratulating the Government now.

Finance Bill

Seema Malhotra Excerpts

Tuesday 1st July 2014 Commons Chamber

[Catherine McKinnell]

My hon. Friend hits on a key point. Rights are rights and should not be up for sale. I will go into some of the concerns expressed about the policy. The TUC, for example, has said:

“We deplore any attack on maternity provision or protection against unfair dismissal, but these complex proposals do not look as if they will have very much impact, as few small businesses will want to tie themselves up in the tangle of red tape necessary to trigger these exemptions.”

Not only do the proposals send out completely the wrong signals about employment rights—I have focused on women’s employment rights, but those rights are affected across the board—but they have been so badly thought through that the general feeling is that they will not have much impact, as most people would not want to enter into the arrangements.

[Seema Malhotra (Feltham and Heston) (Lab/Co-op)]

My hon. Friend is making incredibly important points. She mentioned businesses. Does she share my concern that the scheme has not had the support from businesses that we might have expected, for some of the practical reasons that she has raised?

[Catherine McKinnell]

I agree with my hon. Friend’s concern. The lack of transparency from the Government about the interest in the scheme is why we tabled the new clause. It has been difficult to get information about the scheme’s potential take-up—how many businesses have expressed an interest? It has taken a freedom of information request to get even the most basic information, which I will outline a little later.

I should like to quote Justin King, chief executive of Sainsbury’s. What he says relates poignantly to the interventions made by my hon. Friends the Members for Alyn and Deeside (Mark Tami) and for Feltham and Heston (Seema Malhotra):

“This is not something for our business. The population at large don’t trust business. What do you think the population at large will think of businesses that want to trade employment rights for money?”

I could not have expressed it better myself.

--- Later in debate ---

[Catherine McKinnell]

I agree with the hon. Gentleman. He sums up the point at stake. The scheme seems to confuse and conflate two different issues: employee ownership of shares in a company—something we fully support—and employment rights. There seems to be a belief that one can be traded for the other and that that will create an entrepreneurial work force, when in fact it undermines productivity and performance and is so unattractive that few businesses have taken up the offer, we believe. But that is the reason for the new clause: we want to get to the truth of exactly how many businesses are interested in taking up the scheme.

[Seema Malhotra]

To build on that important exchange, Labour supports employee ownership, but coupling it with slashing employment rights is not only contradictory but counter-productive. Do we not need a way in which we can support employee ownership alongside employment rights? That is how we will get a motivated and engaged work force. Partnership between management and staff is the right way to get the focus on high productivity and long-term incentives.

[Catherine McKinnell]

My hon. Friend speaks passionately and I absolutely agree. Employee ownership is something we should be talking about and finding ways to support. That is why it is so disappointing that the Government wasted the opportunity to boost the cause of employee ownership and shareholding, and have undermined it by framing the argument so unfairly. It smacks of the Adrian Beecroft fire-at-will proposals and does not ring true for most businesses, which do not want to conduct their affairs in that way. They want an equal partnership with their employees to build the business together, knowing that in most circumstances their work force are their key asset. Undermining and cutting employment rights will potentially undermine the trust in a business between employers and employees. That is not the way to build a successful, strong business for the future.

The policy was the centrepiece of the Chancellor’s speech to the 2012 Conservative party conference. He suggested at the time that his grand idea would herald a new three-way deal between employer, employee and the Government, in which employees give up their employment rights, the company gives shares and the Government grant tax exemptions on those shares. In his words, it is swapping “old rights”—as if they are no longer required—

“with new rights of ownership.”

I want to be absolutely clear that we do not oppose the concept of employee ownership. We are aware of its benefits for both employees and employers alike, but we strongly object to its being linked to the removal of employment rights, which serves to undermine the whole concept. Ministers need to make it easier to hire people, not to fire them, but the Chancellor is kidding absolutely nobody by trying to claim that the scheme does anything other than encourage that.

The Chancellor talks about new types of ownership rights, but the Employee Owner Association, which describes itself as the voice of co-owned business, has pointed out that the scheme serves only to discredit and undermine genuine employee ownership schemes—schemes that we fully support. The chief executive of the Employee Ownership Association has said:

“There is absolutely no need to dilute the rights of workers in order to grow employee ownership and no data to suggest that doing so would significantly boost employee ownership.

Indeed all of the evidence is that employee ownership in the UK is growing and the businesses concerned thriving, because they enhance not dilute the working conditions and entitlements of the workforce.”

We need only look at the comments of our colleagues in the other place, including a number of former Tory Cabinet Ministers, before they voted down these measures to see that that view is shared by pretty much everyone outside the Government. Lord O’Donnell said:

“If an employer is offering this, they are probably the kind of employer that you do not want to go near. If an employee accepts it, it is probably because they do not really understand what they are doing. On those grounds, it is bad.”

He went on to ask a question:

“we know that in the old days the price of slavery was 20 or 30 pieces of silver. Is it now £2,000?” —[Official Report, House of Lords, 20 March 2013; Vol. 744, c. 617.]

I could not discuss shares for rights without reminding right hon. and hon. Members of the view of the former Conservative Cabinet Minister, Lord Forsyth of Drumlean. He described the scheme as having

“all the trappings of something that was thought up by someone in the bath”—[Official Report, House of Lords, 20 March 2013; Vol. 744, c. 614.]

Perhaps the Minister will respond to those comments today.

In new clause 11, the Opposition are trying to probe the Government on the take-up that the scheme has achieved so far. A cursory search for “shares for rights” on an internet search engine suggests that things have not been a roaring success. It turns up the following headlines. The FT.com website states, “Chancellor’s ‘shares for rights’ plan flops”. The Guardian says, “George Osborne’s shares-for-rights scheme doesn’t add up”. The Telegraph says, “No take-up on ‘rights for shares’”, as well as, “George Osborne’s flagship rights for shares scheme risks falling flat”. The specialist human resources website, XpertHR, sums it up well with, “Shares for rights: 1.7% of UK employers plan to use employee shareholder contracts, XpertHR research finds”. Even the Deputy Prime Minister has contributed to the headlines, with FT.com reporting in January that “Nick Clegg urges end of ‘shares for rights’”.

I am quoting headlines from internet searches because it is incredibly difficult to get any information out of the Government on the take-up and impact of the policy. The purpose of the new clause is to get to the truth. [Interruption.] I see that the hon. Member for Rochford and Southend East (James Duddridge) is frantically searching on his hand-held device. Perhaps he has found some alternative headlines that he would like to share with the House. Would he like to intervene?

--- Later in debate ---

[Seema Malhotra]

My hon. Friend has quoted some significant voices in this debate and I want to add one more quotation. Justin King, the chief executive of Sainsbury’s, said:

“This is not something for our business… The population at large don’t trust business. What do you think the population at large will think of businesses that want to trade employment rights for money?”

Does she agree that businesses are concerned that the way in which this scheme is being used is not helpful to them? They want to build long-term relationships with their employees, invest in them and find ways to build employee engagement in the profits of the company. Does she also share my concern that this is another way in which the Government are trying to reduce employment rights?

[Catherine McKinnell]

My hon. Friend raises an important point, and that concern has been expressed by a range of voices in response to the proposals—when I say voices, I mean businesses, but also those who represent employees, employee ownership and recruitment agencies. They are all concerned about the proposals ultimately creating a two-tier work force: those who have rights and those who do not.

The Opposition would like to see many problems addressed in relation to some of the insecure working practices that many workers up and down the country are subject to. We know the impact that such working practices have, particularly on those with families and their ability to plan for child care and to know whether they can afford to pay the rent at the end of the week.

People come to my constituency surgery in awful confusion about whether they need to claim housing benefit from one week to the next, because one week they get enough hours to pay the rent, and the next week they do not. That creates a two-tier work force of those who know how much they will be paid and what hours they will work, and those who are left with insecure zero-hour contracts. That potentially creates yet another tier of worker—one who does not have redundancy rights, cannot request flexible working, does not have the right to take time off to train, and one who, if they take maternity leave, has to give four months’ notice instead of two as to when they might return. There is a worrying trend of eroding employment rights that does no good for the workers involved or for businesses, and that strong message has come from businesses in response to the proposals.

Let me return to the criticisms of this policy made by the Deputy Prime Minister in the Financial Times report that I mentioned. That report was telling because it contained the only official piece of information in the public domain about the take-up of the scheme. A freedom of information request from the FT revealed that the Department for Business, Innovation and Skills had received just 19 inquiries about the scheme in the six months to the end of December. That followed a report in The Daily Telegraph last November which found that of 500 businesses surveyed, a mere 0.1%—virtually none—said they were planning to introduce the scheme. The survey also showed that 72% of businesses believed that encouraging employees to relinquish rights would make recruitment far more difficult, in complete contrast to the Chancellor’s claims.

I find that response from the business community incredibly heartening because it shows that businesses in Britain know what makes for a good, strong work force, and for trust between employer and employee. It also shows, however, how completely out of touch the Government are if they think by offering this scheme, they are giving business what it needs. The results of the survey correlate closely with the Department’s own consultation responses, which found that the policy had the full support of fewer than five of the 209 businesses asked to respond. It conceded that only a “very small number” of respondents welcomed the scheme or were interested in taking it up.

To return to the FT report, it is perhaps no wonder that Treasury officials are not particularly optimistic about the scheme’s take-up. Responding to the FT’s FOI figures, an unnamed official admitted:

“This was never going to fly off the shelf.”

Of course it was not—it is divisive, ill thought through, and has proved unpopular among former Tory Cabinet members, not to mention the overwhelming majority of the business community. I gather, however, that those FT figures are the latest information available for the scheme. Will the Minister comment on why that is the case, and explain why Ministers are so reluctant—for whatever reason—to update Members of the House on the scheme’s progress? That is why we have tabled new clause 11. We think that the House deserves to have available the information associated with this scheme.

The FT cited a spokesperson from the Department for Business, Innovation and Skills as saying that they still expected 6,000 businesses to sign up this year. Do the Minister and his officials share the belief in that estimate? Are the Government on track to meet that target? Based on previous figures, consultations and survey responses, I suggest that it is a little ambitious. I am keen to hear the exact figures from the Minister, but if he cannot supply them, I expect the Government to support new clause 11. I am sure that they would also want to ensure that the information be made available to Members.

[Seema Malhotra]

One could conceive that this policy may have had a well-intentioned goal, but does my hon. Friend agree that, given the feedback on the consultations, the low take-up and now the claims that it could lead to a tax loophole and large amounts of tax avoidance, it could end up being a real own goal for the Government? If the policy is not reversed, it needs to be under active review at the very least—hence the importance of new clause 11.

[Catherine McKinnell]

I thank my hon. Friend for that intervention as it takes me neatly to my next point, which is the issue of tax avoidance. Several people share our concern that the employee rights scheme is potentially vulnerable to significant abuse. I raised that concern during consideration of last year’s Finance Bill, when we tabled an amendment calling on the Government to review the impact of this scheme on tax avoidance activity. That helpful amendment was not accepted by the Government, but I hope that this year—knowing that the Government profess to be keen to clamp down on all forms of tax avoidance—they will accept the need to have the right information available to prove that this policy will not create just another massive loophole.

Buried in the annexes to the OBR’s policy costing document from December 2012 was an admission that the cost of the scheme could rise to £1 billion by 2018—depending on take-up, obviously, and we are looking forward to the figures for that. A quarter of that cost was specifically attributed to tax avoidance—or tax planning, as it is termed in the report. In certifying the figures, the OBR stated that

“there are a number of uncertainties in this costing. The static cost is uncertain in part because of a lack of information about the current Capital Gains Tax arising from gains on shares through their employer. The behavioural element of the costing is also uncertain for two reasons. First, it is difficult to estimate how quickly the relief will be taken up; this could make a significant difference as the cost is expected to rise towards £1 billion beyond the end of the forecast horizon. Second, it is hard to predict how quickly the increased scope for tax planning will be exploited; again this could be quantitatively significant as a quarter of the costing already arises from tax planning.”

Perhaps the director of the Institute for Fiscal Studies, Paul Johnson, characterised the issue best when he wrote, in a Financial Times article aptly entitled, “Shares for rights will foster tax avoidance”:

“There may be a case for more flexible approaches to employment legislation. But as a tax policy, ‘shares for rights’ always looks pretty questionable. At a time of increasing scrutiny of tax avoidance schemes, it has all the hallmarks of another avoidance opportunity. So, just as concern over tax avoidance is at its highest in living memory, just as government ministers are falling over themselves to condemn such behaviour, the same government is trumpeting a new tax policy that looks like it will foster a whole new avoidance industry. Its own fiscal watchdog seems to suggest that the policy could cost a staggering £1bn a year, and that a large portion of that could arise from ‘tax planning’.”

It is bad enough that the policy is unnecessary, divisive, damaging and counter-productive. Those of us on the Opposition Benches pretty much all agree on that, and I have not heard any voices from the Government Benches argue the opposite. I look forward to the Minister’s contribution, once he has managed to find that article that is, apparently, supportive of the scheme. The fact that the scheme could cost the Exchequer up to £1 billion, and that one quarter of that cost could arise from tax avoidance, simply beggars belief. The Minister has previously stated that there are sufficient anti-avoidance provisions to mitigate such activities, but what are the Government actually doing to monitor capital gains receipts and reliefs, and ensure we have evidence of avoidance?

Recent reports from the National Audit Office and the Public Accounts Committee have been highly critical of the Government’s continued creation of complexities and loopholes that open the door to more tax avoidance. If Ministers fail to monitor such avoidance activity properly, I fear that this will be just one more tax relief to add to the 948 on the NAO’s list of unmonitored tax expenditures, to use the Treasury’s own phraseology. Considering that the scheme came into being last September, can the Minister produce any more up-to-date estimates, based on Treasury data, to build on the OBR’s original forecast? If he is not able to do that today, hon. Members will want to vote for new clause 11 to ensure that that information is available to the House, that monitoring is taking place and that we can all see the potential implications of the Government proposal.

The Chancellor’s flagship shares for rights scheme has been rejected by businesses. It may have opened up a tax loophole that, according to the OBR, will cost the Exchequer £1 billion. For what gain? That is what people are asking. That is what the Government need to demonstrate in their response today, or certainly in the report that we are calling for. We have said that we will reverse the shares for rights scheme and use the money to contribute to the repeal of the bedroom tax. The bedroom tax is a cost-inefficient policy and we would like to see it reversed. We want the money saved from the damaging shares for rights scheme to be used to ensure that that can be achieved without any extra borrowing. We have urged the Government to abandon their ill-thought-through shares for rights policy, which the director of the IFS aptly described as having all the hallmarks of another tax avoidance opportunity, never mind the former Conservative employment Minister, Lord Forsyth, accusing it of having the trappings of something thought up in the bath. So far, Ministers have failed to listen; or at least, they may be listening but they are not hearing.

We have tabled new clause 11 to try to provide much-needed clarity. Officials and Ministers dismiss out of hand as unrepresentative take-up figures disclosed in FOI requests. OBR forecasts are dismissed as not taking account of all the facts. Indeed, the Government’s own measures are dismissed as being unreliable or uncertain. Why will Ministers not step up to the mark and disclose exactly how many employees have signed up to employee shareholder contracts and have been awarded the £2,000 in return for shares? Why will Ministers not disclose the value of shares that have been issued under the shares for rights scheme to date? Instead of labelling Opposition amendments as unnecessary and as an administrative burden, which I anticipate the Minister will, why will the Minister not instead today tell us exactly how much the scheme is costing the Exchequer as a result of the capital gains tax exemptions? How much of that cost is as a result of tax planning arrangements; people capitalising on a poorly thought through policy that could quite easily act as a tax avoidance mechanism, rather than the great stimulus to entrepreneurship and employment that the Government claimed it would achieve?

It is bad enough that this divisive policy totally undermines the concept of employee ownership and workplace rights, not to mention the potential millions lost in tax avoidance activity; but worst of all, Ministers are plainly refusing to disclose the information that would enable Members properly to assess and scrutinise what the scheme has done to achieve the Chancellor’s clearly stated aim of helping businesses to recruit more people.

For all those reasons and given the concerns set out by my hon. Friends, I urge hon. Members to support our new clause 11, so that we can get the facts straight on shares for rights.

Oral Answers to Questions

Seema Malhotra Excerpts

Tuesday 24th June 2014 Commons Chamber

[Andrea Leadsom]

Yes, I absolutely agree with my hon. Friend. The Government want more competition and diversity in the banking sector, which is why we asked the old Financial Services Authority to review the barriers to entry for banks, why we legislated to give the Financial Conduct Authority strong competition powers, and why we created the payment systems regulator to look at fair access to payment systems.

[Seema Malhotra (Feltham and Heston) (Lab/Co-op)]

In recent discussions with women entrepreneurs I have been struck by the number who have said they were surprised by the banks’ attitude towards them and their businesses. I spoke to one entrepreneur who said that only when she was featured in a TV programme did a bank phone her up and offer her a loan. What discussions has the Chancellor had with banks about women-led businesses, the demand for lending and how many they are lending to?

[Andrea Leadsom]

This Government have taken great steps to improve competition and I am delighted that, currently, the regulator is talking to 25 new applicants for new banks. We are also taking steps to ensure that those who get turned down for credit have the opportunity to go to other challenger banks to access other sources of finance. I am sure that the hon. Lady will welcome the steps that the Financial Secretary to the Treasury, my right hon. Friend the Member for Loughborough (Nicky Morgan), is taking to improve particularly the support the Government are giving to female entrepreneurs.

Amendment of the Law

Seema Malhotra Excerpts

Thursday 20th March 2014 Commons Chamber

[Vince Cable]

I find that many of my ideas have been incorporated in Government policy, and I am very pleased about the progress that we are making in that respect.

Of course, increased investment depends on business confidence. Because we are approaching the election season, a danger is posed by some of the comments being made by the Opposition. Sir George Cox, who used to be at the Institute of Directors and is now an adviser to the Opposition, suggested recently that the business-averse policies of the shadow Chancellor and his leader were doing serious damage not to their own credibility, but to confidence in the country. I would underline that. If we have policies that appear to commit future Governments to energy price freezes that prevent new energy investment, we are undermining investment. Of course it is not just the Opposition; the people who want to take Britain out of the European Union and want to take Scotland out of Britain are also undermining investment confidence. Political certainty requires at least literate policies from the Opposition, which in the area of price freezes certainly is not the case.

[Seema Malhotra (Feltham and Heston) (Lab/Co-op)]

I think the Secretary of State will know that that is not an accurate representation of what was said. May I ask him to comment on net lending particularly to small businesses, which is a concern? Why does he think that has continued to fall on his watch, and what is going to be done about it?

[Vince Cable]

Yes, there has been a continuing decline in net lending to small business. We think it is bottoming out, but it has happened and it is damaging. It is a consequence of the near-collapse of the banking system and the fact that some banks are now responding to much tougher regulation by being much more conservative in their lending. That is not true in all cases: Lloyds and Santander are increasing their net lending to small businesses, but many are not.

In response, the Government are establishing institutions, particularly the business bank, which are developing new flows and types of finance—internet-based lending, asset-based finance, invoice finance—in areas that hitherto were deficient, as well as supporting the establishment of new banks. About 20 new banks have been licensed over the last year, and that deals with the issue of bank competition that should have been dealt with when the last Government were in power and we had the Cruickshank report. That is now happening, however, and I therefore think we will begin to see the net lending trend becoming much more positive, but there is no underestimating the enormous damage that was done to the British economy as a result of the collapse of the banks, over which the last Government had responsibility for many years yet did absolutely nothing.

--- Later in debate ---

[Seema Malhotra (Feltham and Heston) (Lab/Co-op)]

It is disappointing that this has turned out to be a Budget for the few, not the many. I am particularly concerned that it has delivered nothing to support young people and the long-term unemployed, and it is on that point that I wish to make a few remarks.

We all know that young working families are struggling. Last week I met Sarah, a young mum of two, in a local supermarket. Two years ago, the jobcentre forced her to go on a course at a time when she was very ill during her first pregnancy. The tutor on the course sent her home almost as soon as she arrived, and her doctor then signed her off work for the pregnancy lest she even lose the baby. Her partner has been out of work for three years, which has had a knock-on effect on his self-esteem. He is a young man struggling to find work and wanting to support his young family, and he has felt that the courses being offered to him are well below what he needs and are doing little to increase his chances of work.

I met a mum who was concerned about her son’s future. He has been on a zero-hours contract with no certainty about what work he will get or on what day. The stress that it has caused the family is enormous. Imagine not being able to plan if and when to do a course of further learning, or when it might be possible to see a doctor, care for a family member or go out on a certain day. Zero-hours contracts definitely need reform.

More than 1 million 16 to 24-year-olds in the UK are not in education, employment or training. Long-term unemployment is up more than 300% since 2010, and long-term youth unemployment has almost doubled in that period, yet pay is still rising faster for bankers than for the average worker. This was not a Budget for those such as the disabled man I met recently who was hit by the bedroom tax; for the families and parents struggling with rising child care costs; or for small businesses struggling to pay their business rates.

I welcome the reduction in bingo duty and I am pleased that the Government have listened to calls from Labour and the public about reducing that duty. I thank many of my constituents, including Mike Ellis, a bingo club manager in Feltham, for their work on that matter. The fact remains, however, that the recovery is not yet reaching the many. The Chancellor and the Prime Minister often talk about getting young people into work, but I am concerned that there is no actual plan for young people. Making school-based work experience optional rather than compulsory, as the Government did in September 2012, is one shocking example of that—a move that was opposed by Labour and by 89% of those who took part in the Department for Education consultation. In the past year alone more than 64,000 fewer young people have been able to take part in work experience, compared with the previous year.

The young people of today are the taxpayers and leaders of tomorrow, and we have a responsibility to hold open the doors so that they can succeed. That is why getting young people back to work is a priority for Labour. It is about our duty to the next generation, to give them the chances they need, and confidence that the Government are on their side. Labour would put young people back to work with a job for every unemployed young person, paid for by a tax on bankers bonuses. Young people also need a place to live and bring up their families, and Labour would build up to 200,000 homes a year by 2020. Tackling the housing crisis is not just about fuelling demand, but building new homes and increasing supply.

We would freeze energy prices to help tackle that modern scourge: the cost of living. Labour would get finance flowing again to businesses, with a proper independent business investment bank and a network of regional banks to support businesses that need finance, not just in London but in our industrial centres in the north that have been so neglected by the Government and on which our national economy depends.

This country needs an active Government with the courage to bring forward bold policies to build a strong, sustainable economy that generates wealth for the many, jobs for the unemployed, and prosperity for all. Instead, it is a shame that this out-of-touch Chancellor, and Prime Minister, has delivered a Budget that caters for the privileged few, while working families and mums like Sarah fight for scraps from his table.

National Minimum Wage

Seema Malhotra Excerpts

Wednesday 15th January 2014 Commons Chamber

[Rachel Reeves]

I suggest that Government Members look at what we are debating: the national minimum wage. I know they do not want to talk about it, because they did not support it in the first place, but it would be nice if they could talk about its impact on their constituencies. However, I think we may have to wait for another occasion.

We have a Government who opposed the national minimum wage when it was introduced and who are not enforcing the legislation properly today. Thanks to an investigation by the independent Centre for London, we know that as many as 300,000 workers are being paid less than the minimum wage. We have reports of workers having the costs of uniforms, accommodation, transport or training illegally deducted from their pay packets. We have shocking accounts of working conditions for some people in sectors such as elderly care which hurt not only employees but vulnerable people who need a reliable and good-quality service from people who are paid a decent wage. There are stories of legal loopholes being used to bring in migrant workers who are, as my hon. Friend the Member for Stockton North (Alex Cunningham) said, forced to work at exploitative rates of pay that also undercut and undermine the pay and conditions of all workers.

Despite that, the number of enforcement cases opened or registered has fallen in every year of this Tory-led Government, and it is now at less than half the level it was in the last year of the Labour Government. Since this Government came into office, just two prosecutions have been brought for non-payment of the minimum wage. They have repeatedly said that they will name and shame firms that are flouting the legislation, but they have not named a single one.

[Seema Malhotra (Feltham and Heston) (Lab/Co-op)]

My hon. Friend is making a very powerful speech. Does she agree that perhaps one of the reasons the national minimum wage has not been enforced is that Government Members are not 100% committed to it? For example, the hon. Member for South Northamptonshire (Andrea Leadsom) has called for businesses with three employees or fewer to be exempt from the national minimum wage, as well as from regulations on maternity and paternity rights.

[Rachel Reeves]

Not only are Government Members not 100% behind the national minimum wage; they cannot even bring themselves to say “national minimum wage”.

--- Later in debate ---

[Vince Cable]

I did not particularly wish to raise this, but I am being asked personally to explain why I did not vote. It had a lot to do with the fact that my late wife was terminally ill at the time and I was in the Royal Marsden hospital. That is why my voting record at the time was poor on that and other issues.

As it happens, my party supported the national minimum wage; nobody opposed it. I became the party’s spokesman shortly after the vote and I made it absolutely clear throughout that Parliament that we supported the principle of the national minimum wage. There was never any question about that.

Perfectly legitimate issues were raised about why there was no regional variation. There is a proper debate to be had about whether there should be a regional or a national minimum wage. As it happens, I endorsed the principle of the national minimum wage. However, there is a perfectly respectable argument for regional variation. As I understand it, the Labour party now promotes the living wage, at the heart of which is the idea that there should be regional differentials, with people in London being paid more and people in the west country or the north of England being paid relatively less. There is an argument for that. Why criticise people who have put forward that idea in good faith?

As for the Conservatives, although I do not always speak in their defence, I think that they should get credit for accepting that there is a good system that works and for deciding to support it. That is creditable. Although I and my party have supported the national minimum wage, there is a perfectly respectable intellectual and moral argument for not having a minimum wage. Countries that do not have a minimum wage include Sweden, Finland, Norway, Denmark and Austria. Those countries are all in the social democratic tradition, but have felt that it is too problematic. Germany, which has had either social democratic or national unity Governments for most of the post-war period, has adopted a national minimum wage only in the last few weeks. In those countries, where there are civilised values and a sense of solidarity, the costs and benefits of the minimum wage have been debated properly. Why should we criticise people in this country who wanted to have such a debate, but who have now come to a consensus that it is a good system and that we should make it work?

[Seema Malhotra]

Is the Secretary of State saying that Government Members and Conservative Members in particular support the national minimum wage for all businesses in all circumstances?

[Vince Cable]

Yes, it is now the law. Of course we support enforcement of the law. I do not understand the question.

Autumn Statement

Seema Malhotra Excerpts

Thursday 5th December 2013 Commons Chamber

[Mr Osborne]

Britain is very much open for business. We are now the destination for a huge amount of investment from around the world, and we have some very important ports, one of which in particular depends on the A14. That is an important strategic link. We have listened to representations from local people concerned about the prospect of tolling an existing road, albeit an improved one, and we will ensure that the road is improved, not just for local people, but for the whole country, but without imposing a road toll.

[Seema Malhotra (Feltham and Heston) (Lab/Co-op)]

Evidence from Citizens Advice showed that last year citizens advice bureaux received 92,000 inquiries about fuel debt and 81,000 about water debt and that the four months to June this year saw a 78% rise in the number of people inquiring about food banks. Does the Chancellor agree that, with families on average £1,600 a year worse off, this is an unbalanced recovery, and does he regret that the UK has suffered the second-biggest fall in wages of any G20 country since this Government came to office?

[Mr Osborne]

We had one of the deepest recessions and the highest budget deficit of any country in the G20. We have been recovering from that situation, which this Government inherited, increasing the number of jobs in the hon. Lady’s constituency and ensuring opportunities for people to go to university or find apprenticeships and for those without skills to get good training. These are the things we are doing to clear up the mess that her party left behind.

Cost of Living

Seema Malhotra Excerpts

Wednesday 27th November 2013 Commons Chamber

[Chris Leslie]

The hon. Gentleman should be shamefaced even to mention economic growth when for the vast majority of his esteemed time as a Member of Parliament growth has flatlined and he has failed to deliver. He needs to recognise that unless we get some serious and sustained economic growth, we will never deal with the deficit issues we have in this country.

[Seema Malhotra (Feltham and Heston) (Lab/Co-op)]

Is my hon. Friend as surprised as I am by the amnesia among Government Members, bearing in mind that we were coming out of recession in 2010 but have since been flatlining and that they have failed to explain why prices have risen faster than wages for 40 out of 41 months?

Women and the Cost of Living

Seema Malhotra Excerpts

Tuesday 19th November 2013 Commons Chamber

[Gloria De Piero]

That is absolutely right. That is why it is important to tackle long-term unemployment, and that is exactly what a Labour Government would do.

When women do manage to find work, more often than not it is part time, low-wage or temporary. The number of women working in temporary jobs increased twice as fast as the number of men. Three times more young women are in low-wage jobs than 20 years ago, and the number of women in part-time work is at its highest level ever.

[Seema Malhotra (Feltham and Heston) (Lab/Co-op)]

My hon. Friend is making a powerful speech. Does she agree that for women working in jobs not equal to their capabilities and not getting the hours and experience they need and deserve, it will have a longer-term impact on their prospects in the workplace and their income over their lifetime?

--- Later in debate ---

[The Economic Secretary to the Treasury (Nicky Morgan)]

It is a privilege to speak in this debate. My favourite quote is from the UK’s first female Prime Minister:

“If you want something said, ask a man; if you want something done, ask a woman.”

I am not sure whether today’s debate is a landmark because all the opening and closing speeches will be made by women Ministers and shadow Ministers, but I would hope that we could make it a bit different by having a proper discussion rather than just talking at each other.

The Government recognise that both women and men up and down the country have been through a difficult economic period because our economy has been through, and is now recovering from, the most damaging financial crisis in a generation.

[Seema Malhotra]

Does the hon. Lady agree, however, that women have been hit three times as much as men by the Government’s deficit reduction steps?

[Nicky Morgan]

I am afraid that I cannot agree with the hon. Lady. I will come on to talk a little bit more about this, but the difficulty with the Opposition’s figures is that they assume that income is not shared throughout a household but that it is held on to by one parent in a two-parent household. The Labour figures also do not take into account self-employment, the correct inflation figures and any benefits or tax cuts. Therefore, the figure that was stated of £1,600 does not actually stack up at all.

[Seema Malhotra]

rose—

[Nicky Morgan]

I am going to carry on for now.

As I said, we are now recovering from the most damaging financial crisis in a generation. I am afraid that the hon. Member for Ashfield (Gloria De Piero) did not mention that financial crisis at all, but it was overseen by the Labour party—although I appreciate that she was not a Member of this House at that time. It was overseen by the last Government, who built a decade of growth on unsustainable debt. When our country is trying to overturn the largest deficit since the second world war at the same time as our largest trading partner, the EU, has been in recession, it is unfortunately highly likely that women and men will feel the pinch.

--- Later in debate ---

[Alison McGovern]

Thank you, Madam Deputy Speaker.

The hon. Member for Braintree (Mr Newmark) tells me that I do not like to hear facts, and then he confuses the population of women in employment with the unemployment rate. I am sorry—[Interruption.] Madam Deputy Speaker, it is incredibly frustrating in this House when people shout things like, “More women in work than ever before,” when we all know that the rate of unemployment is what matters. I suggest that the hon. Gentleman acquaints himself with some of the facts. If the population increases, that will increase the population in work. It is the unemployment rate that matters, most importantly the long-term unemployment rate. That is the most damaging thing, as I know from communities such as mine. Long-term unemployment has increased eight times as fast for women as it has for men, so I would instruct the hon. Gentleman to acquaint himself with the facts rather than coming to this House to patronise me.

[Seema Malhotra]

Does my hon. Friend share my surprise at the fact that under this Government 63% of the jobs that have been created have gone to men and 37% to women?

[Alison McGovern]

Unfortunately, I am not surprised by that fact. I am only too aware of it. I suggest that the hon. Member for Braintree acquaints himself with the facts before he intervenes again.

I intervened to mention care workers and zero-hours contracts. I see this a great deal in my constituency, so I make no apology for raising the issue in the House again. The Government estimate that 1,750 people are working in the care sector in Wirral. It is my assumption from experience, although we do not know, that many of those are women. It is my guess that many of them are older women. I hope the Ministers on the Treasury Bench might at some point go and talk to women working in the care sector. I am sure they will do so in their constituencies. They will hear about the heartbreaking experience of women who face local government cuts, which creates low wages in the sector and means that there is not always good training.

Local government cuts have had a severe impact on care, which has affected not only those who receive that care and support, but those working in the sector and their ability to make ends meet while they do an incredibly stressful job, sometimes caring for older people at the end of their life, which I know Ministers will agree is a terribly important job. I am sure they will look at that issue with great care and attention.

Finally, I want to say a couple of words about older women. I believe that my generation stands on the shoulders of the generation that was born in the 1950s. That group of women saw none of the benefits of the legal and social change that they fought for, but they fought for it none the less. They are now being punished by this Government because of pension changes that have gone through too quickly. They are also a generation of women who, as I mentioned in response to the intervention from the hon. Member for Braintree, have seen much greater unemployment by proportion compared with men. As my right hon. and learned Friend the Member for Camberwell and Peckham (Ms Harman) has pointed out so eloquently, they are a generation of women who always seem in danger of being counted out.

Let us not do that economically. That generation of women fought for the rights that have enabled people like me to see any success in my life. Let us make sure that we back them up, not just in terms of pensions, but in terms of their living costs now, and make sure that they do not face the severe and significant unemployment that hurts their chances now and as they move into later life.