Small Business, Enterprise and Employment Bill

Debate between Tom Blenkinsop and Sheila Gilmore

Wednesday 19th November 2014 Commons Chamber

[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.

Finance (No.2) Bill

Debate between Tom Blenkinsop and Sheila Gilmore

Tuesday 8th April 2014 Commons Chamber

[Tom Blenkinsop]

Does my hon. Friend agree that it is interesting that Conservative Members are talking about a 20% rate of corporation tax, which is a direct tax on profit, but have no qualms about how a review might interplay with things such as value added tax, which many, if not all, small businesses pay and is paid prior to profit?

[Sheila Gilmore]

Value added tax has been a difficulty for a lot of individuals and for small businesses. The amendment is an opportunity for us to review these matters. If Conservative Members are right that such a change would be harmful, a review would show that. It has to be demonstrated to the small businesses of this country why a proposal of this kind is thought to be harmful to our economy.

Business and the Economy

Debate between Tom Blenkinsop and Sheila Gilmore

Monday 14th May 2012 Commons Chamber

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

There has been a lot of doom and gloom today, I must say. I was sure that someone on the Government Benches would mention the fact that retail sales bounced back by 1.8% in March 2012. The House of Commons research paper, “Economic Indicators, May 2012”, states on page 20 that that was down to the fact that:

“Unusually high automotive fuel sales were a major contributor to retail sales growth in March.”

I think everyone in the Chamber knows why that was.

So many chief executives have been sacked in recent weeks for failing to deliver the performance promised by their high salaries that we might think the brief reference to directors’ pay in the Gracious Speech was unnecessary, or more appropriate to current Ministers. Apart from that, there was little in the Gracious Speech about business, investment, employment or growth. In fact, since the speech last week, the Government’s lack of vision for business has degenerated into an attack on entrepreneurs.

Aviva, Trinity Mirror and AstraZeneca shareholders have recently indicated that they have had enough of their chief executive officers. Why now? It is obvious that those shareholders sensed that they were beginning to lose control of the companies that they owned. The parallels between business and the Government are only negative in that respect. More importantly, is that situation just about executive pay, or is it a further indicator of corporate financial hoarding? Shareholders are savers who want great returns, of course, but what are the Government doing to get shareholders to increase their intention to part with their profits for further business investment? The real economic impasse is in getting companies to part with their hoarded billions of pounds, and that was not addressed in the Gracious Speech.

BT recently paid off a considerable deficit in its pension scheme. It paid £3 billion by the end of March and will make nine annual payments of £325 million. BAE Systems had a £2.1 billion cash pile, yet in the past two years it has cut 22,000 jobs, 3,000 of them in the UK, while returning £2.2 billion to shareholders. The story is similar at the oil services company AMEC, which ended 2011 with £521 million of cash and unveiled a £400 million share buy-back programme. Last year, shareholders’ dividends paid by listed companies jumped by 19% to a record £67.8 billion, according to Capita Registrars, and they are expected to hit a new high of £75 billion this year. Jonathan Bye, chairman of the Food and Drink Federation’s SME forum, says:

“Companies like Nichols have plenty of cash…the irony is that the big manufacturers are sitting on cash because they just don’t know how to use it.”

After this Gracious Speech, they still will not.

The Government’s ideological strategy is to focus on an enterprise and regulatory reform Bill that is supposed to reduce burdens on businesses by repealing unnecessary legislation and limiting state inspections. The argument is the same as ever—shrink the state, deregulate and get out of the way of the private sector. They say that it worked perfectly in the years following the 1990s recession and the early 1930s depression. It is expansionary fiscal contraction, the antithesis of Keynesian stimulus spending.

We have had two years of this already. Despite the evidence provided by the double-dip recession, of which Opposition Members forewarned, the resounding message of the Gracious Speech is “more of the same”.

[Sheila Gilmore]

It is interesting that my hon. Friend mentions the parallel with the 1930s. One parallel that worries me is that, as in the 1930s, there is a huge difference between different parts of the country. Does that perhaps explain why so many members of the Government are apparently unaware of the effects of the recession—they represent parts of the country that are not suffering as badly as others?

[Tom Blenkinsop]

My hon. Friend makes an excellent point. Before the general election, the now Prime Minister stated that the north-east economy needed serious rebalancing. Actually, the north-east is the lead region for exports, with more than £13 billion a year. If the Labour Government got everything so economically wrong, why, despite the overarching burden of the public sector, has the north-east managed to beat every other region in the country? I am bemused, foiled and perplexed by that one. The Prime Minister might want to come to the Dispatch Box on Wednesday and explain it to the workers of Alcan and other industrial workers in the north-east let down by the current economic policy.

Business investment is actually shrinking, and in the final three months of 2011 fell by a whopping 5.6%. It is the single biggest drag on economic growth, with a negative gravitational pull of 0.5%. Business investment is still more than 15% below its pre-recession peak in 2008. Unlike in the 1990s recovery, when private sector hiring employed four people for every one public sector job cut, business recruitment is extraordinarily weak. For evidence of that, we only have to look at the private sector last year. Admittedly, it took on 226,000 staff in full-time but mostly part-time positions, yet figures from the Office for National Statistics show that 270,000 public workers were laid off. The Government’s official forecaster, the Office for Budget Responsibility, said that 2012 should be the year of the business renaissance. Of the weak 0.7% growth the OBR expects the UK to eke out over the next 12 months, 0.6% is scheduled to come from business investment—the single largest contributor.

We have been here before. Last year, the OBR forecast that business investment would deliver 6.7% growth, but it did not. Instead, it shrank by 2%. According to the Bank of England, 2012 is not looking very encouraging either, despite the OBR’s optimism. Its recent agents survey for February found that

“investment intentions continued to weaken, suggesting little growth in spending on capital over the next 12 months”.

That is mirrored by Barclays Capital’s Simon Hayes, who said that the OBR’s projections required a level of spending not seen in 30 years.

Essentially, my point is that the Queen’s Speech does not introduce any policy or legislation to enable this Parliament to get hold of the £750 billion of cash under the corporate mattress to invest in Britain and ensure we have a genuine rebalancing of our national economy.

Work Experience

Debate between Tom Blenkinsop and Sheila Gilmore

Tuesday 13th March 2012 Westminster Hall

[Sheila Gilmore]

Absolutely, but we must ensure that these schemes build on the experience and skills that people already have. Of course, some people have not worked for a very long time. Some young people have never held down a job. For them, some basic experiences will enable them to grow, develop and mature.

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

I come from a town with 14% unemployment; indeed, it has a history of unemployment over the past two or three decades. Most people will make any sacrifice, in any way, shape or form, for the promise of a job. The problem at the moment is not necessarily this policy in its totality; I think that it is well meaning, although perhaps it has a few kinks in it. The problem is the change to tax credits. There may be no promise of a job at the end, or particularly in retail, there may be a job that is part time and for fewer than 24 hours a week. Some people might therefore see such work experience as valueless, because the job at the end might not pay as much as they would receive on the dole.

[Sheila Gilmore]

My hon. Friend is correct. Someone spoke previously about an elephant in the room. The job at the end is probably the biggest elephant in the room. It is not good enough to say that the whole problem is about people not having skills or training and that, somehow, if we list all the schemes, work programmes and other programmes, we have solved the unemployment problem. There are two sides to the unemployment problem. There is the problem of the lack of jobs, which is very considerable in some areas of the country, and, yes, there are issues about whether people have the proper skills and experience to take up opportunities. We need both. To say constantly that we are on top of this because we have programme X, Y, Z and goodness knows what else will not solve the problem of the lack of jobs.

One big issue that we face is that we do not know a lot about the outcomes of the scheme. We are told that it is a wonderful scheme and is having great results. Will the Minister tell us when he will give us more detailed information about what is actually happening? Ministers and Back Benchers constantly recite the fact that half of those doing work experience are in jobs within a short time. That is based on an initial pilot involving some 1,300 people between January and March 2011. The more accurate statement—I accept that the Minister usually gives the more accurate statement, although others do not—is that one half or 51%, to be exact, were off benefits 13 weeks after the work experience period. They may have come off benefits and gone into a job or to college, or simply not have been claiming. For example, someone who has got to the end of their six months on jobseeker’s allowance and who has a working partner may simply stop claiming.

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[Tom Blenkinsop]

May I give my hon. Friend an example? The Government are changing the point at which an employee’s rights kick in and they become a full employee with full rights to 24 months. What is there to say that a young person who has got work experience through this scheme and gets a job will not find that the workplace is subject to a short-time-working agreement and that they are probably first in line for a LIFO—last in, first out—scheme, unofficially, by that employer, because their employment rights do not kick in for another 12 months?

[Sheila Gilmore]

The situation might be even worse than that. At Treasury questions last week, my hon. Friend the Member for Chesterfield (Toby Perkins), who is not here today, raised the case of two young people who had been given a job at the end of a work experience scheme, but who were paid off within two weeks, which is not particularly satisfactory. If we are not tracking outcomes properly, we should be. If we are to judge the validity of schemes, we need the data.

Oral Answers to Questions

Debate between Tom Blenkinsop and Sheila Gilmore

Wednesday 19th January 2011 Commons Chamber

[Sheila Gilmore (Edinburgh East) (Lab)]

8. What assessment he has made of the likely effects on the social enterprise sector of reductions in Government expenditure.

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

9. What assessment he has made of the likely effects on the social enterprise sector of reductions in Government expenditure.