Small Business, Enterprise and Employment Bill

Tom Blenkinsop Excerpts

Wednesday 19th November 2014 Commons Chamber

[Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)]

My hon. Friend is no doubt aware that even the Treasury has admitted in statistical analysis that in the case of someone on a fixed-term contract of 20 hours as opposed to someone on a zero-hours contract with potentially 40 hours—although it will fluctuate over time—the person on the zero-hours contract pays more in national insurance contributions than a similar worker doing the same amount of hours annually. The Treasury estimated that they were about £300 a year worse off than a person on a fixed-term contract doing fewer hours.

[Ian Murray]

That is the way the tax system works. People are allocated their national insurance and tax thresholds on the basis of when they work on a monthly basis. It can be aggregated over the year only if they are in permanent employment through pay-as-you-earn and the national insurance contributions that are made. In Committee, we had the strange scenario of Government Back Benchers saying that it does not matter what the tax take is because the aggregate would be the same if 100,000 people were working on zero-hours contracts than if the same number of hours were being worked by those in permanent employment. That is primary school economics, because the analysis does not work.

The Government have to reflect on the fact that while unemployment is falling, and has fallen by a substantial amount over the past 12 months, tax take, including income tax take, is exactly the same as it was the year before. That means that people are not being paid properly for the work that they are doing, that they are under-employed, or that they are in part-time jobs or on zero-hours contracts. So while they may not be an unemployment statistic, they are certainly not contributing to the economy.

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[Tom Blenkinsop]

Does my hon. Friend know whether the hon. Member for Burnley (Gordon Birtwistle) was the Parliamentary Private Secretary to the Chief Secretary to the Treasury in March 2012, when the Government froze the national minimum wage for under-21s?

[Sheila Gilmore]

I do not think that there is any need to add to that observation.

When people work on a regular basis, that has to be accepted and provided for. That is what amendment 10 would do. If somebody genuinely does not want a permanent contract, nobody is saying that it should be forced on them. Amendment 10 says that people should be offered such a contract. If there really are all those people out there who would not want a permanent contract instead—I have to say that I doubt it—they would, of course, be free to turn it down.

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[Sheila Gilmore]

I am sure that some people would like the Opposition to table amendments to abolish zero-hours contracts, but our position has never been to say that they should be abolished totally. The question is whether people have a genuine choice. Just as an employer can say, “I need you on Friday evening, Saturday afternoon and Sunday morning,” the employee should be able to say, “I can’t do Sunday morning. I want Monday or Tuesday instead.” The question is whether there is a genuine two-way relationship, and in a lot of circumstances there clearly is not. That shows that we have to give people protection.

[Tom Blenkinsop]

This is not just about zero-hours contracts. Under the amendments, an employee would be entitled to see their contract within six months of starting their employment. Often, people are not given any view of their contract, and their agreement to the terms and conditions is implied by the fact that they turn up to work. The amendments are about all contract work, not just zero-hours contracts. An employee should have the right to see their contract, and the Government should enforce that right.

[Sheila Gilmore]

That is an important comment, and it illustrates again the importance of giving people protection that they do not necessarily have at the moment. In a lot of situations, the employee is perforce in a much weaker position than the employer.

I fully accept that there can be circumstances in which people can find contracts such as we are discussing a useful way to live their lives, provided that they have equal bargaining power. I remain slightly unclear, however, about why people who want choice would not on the whole be better operating on a self-employed basis. There are a lot of people who have been doing regular work and who everybody knows are employees, but who cannot easily get permanent work. Some employers might find it difficult to rearrange their planning to let them have a permanent arrangement, but things seemed to operate on that basis for many years. I cannot understand why it has suddenly become so difficult for employers to manage.

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We have heard from those on the Front Benches about Labour’s plans to give responsibility and power to local councils to enforce the national minimum wage, but cuts to HMRC have made it significantly more difficult to enforce existing legislation—I have also seen that in my area where HMRC employs a significant number of staff. The Government’s efforts to introduce a policy of naming and shaming have been pretty poor.

[Tom Blenkinsop]

Proposed new section 6A(c) in amendment 8 states

“changes in provisions relating to the national minimum wage improving other measures of pay in the labour market.”

That obviously means that Labour wants better collective bargaining in workplaces. The best way of ensuring any minimum standard is to have collective bargaining on site as that would reduce the costs of enforcing the national minimum wage at a later stage. Does my hon. Friend agree that one good measure for the care sector and other small SMEs is more collective bargaining in the workplace?

[Bill Esterson]

That is absolutely right, and as evidence from the TUC that I mentioned earlier made clear, where we have organised workplaces, we have a better system of pay, conditions and support, and as a result better services in sectors such as the care sector.

[Tom Blenkinsop]

Does my hon. Friend agree that the best way to have collective bargaining on site is to pay subscriptions to a trade union? Traditionally, of course, that has been done through check-off. Does he agree that the Government’s current position on check-off, as an employer of their own employees in the civil service, is a demonstration of their lack of commitment on this issue?

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[Toby Perkins]

Frankly, the right hon. Gentleman is the one who ought to be a bit embarrassed.

Let me continue by talking about pub companies. The right hon. Gentleman was not in the Chamber for much of yesterday’s debate, but had he been, he would have realised why we were able to convince people that the Government’s proposals on pub companies did not go nearly far enough and that real change was needed. It is a matter of tremendous pride that we were able to convince hon. Members on both sides of the House to express their will in support of the market rent only option. The Minister’s attitude and the approach that he is taking demonstrate how the Government have lost all the arguments on that. I am glad to see that they are not going to try to bring the family brewers back into the scope of the measure, even though he is wrong to say that no amendment was withdrawn yesterday. A series of amendments were withdrawn yesterday that would have attempted to bring the family brewers back in. I hope he reflects carefully before attempting to change in another place something that was the will of this House.

[Tom Blenkinsop]

On a slightly different note, I wanted to raise one factor that was highlighted to me. There has not been one speech or one single contribution from a Scottish nationalist during the entire—

[Madam Deputy Speaker (Mrs Eleanor Laing)]

Order. That is not a point for Third Reading. I asked the hon. Member for Chesterfield (Toby Perkins) to be brief because there are people who have had no chance to speak in this debate. I trust that what the Chair says will be listened to.