Amendment of the Law

Debate between Vince Cable and Debbie Abrahams

Thursday 19th March 2015 Commons Chamber

[Vince Cable]

Let me deal with one of the points of righteous indignation that is made about welfare cuts—the point about the so-called bedroom tax. The problem with it is that the idea of relating housing benefit to the size of accommodation did not start under this Government; it was a long-standing policy in relation to people in private rented accommodation. Where we have disagreed with our Conservative colleagues—we have made this explicit—is in saying that the so-called bedroom tax should not apply retrospectively. If people are given an offer of accommodation in the council house sector and they turn it down, they should pay it, but if they do not receive a satisfactory offer, they should not. That is a point of difference. The sheer righteous indignation bears absolutely no relation to the history of this problem.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

Will the Secretary of State give way?

[Vince Cable]

I will take the hon. Lady’s intervention later.

Let me turn to the broader issue of living standards. It is blindingly obvious that in all the western countries that were hit by the financial crisis, there has been a fall in real wages. That has happened everywhere. Countries—including ours—were made poorer, production fell, productivity fell and, although we got more people back into work, real wages fell with it. I am putting this in terms of basic economics. Unless real wages had been kept “sticky”, as Keynes termed it, they were bound to fall, and they have fallen. The alternative was what has happened in France, Spain and Italy, where real wages were maintained, but where there has been mass unemployment as a result, particularly among younger workers. That has not happened here, which is a blessing.

The figure that the Chancellor produced yesterday is highly relevant, because what matters to households is not just wages but people’s take-home pay and disposable income. Disposable income involves not just wages but tax credits and taxation, and families are now better off then when we came to office. That is a result of several interventions, the most crucial of which was lifting the tax threshold. We made the radical, massive change of lifting the income tax threshold from £6,700 to £10,800, and that has brought a great deal of relief at a time of economic crisis to 27 million people. Three million people have been lifted out of tax altogether—mainly women on part-time earnings—and that has benefited workers by the equivalent of £800 a year. That has cushioned working people from the effects of the crisis, and there should be some acknowledgement of that from the Opposition Benches.

[Debbie Abrahams]

I must challenge the Business Secretary on what he has said about the impact of this Government, which includes the Liberal Democrats and their policies. The Institute for Fiscal Studies clearly states that as a result of tax and spending changes, low-income families, particularly those with children, are proportionately worse off, and incomes have reduced by £1,100. We cannot avoid those facts.

[Vince Cable]

As I said, the whole of society was hit by the economic crisis, but it is clear that the poorest in society have not been proportionately badly hit, and the people at the top have paid proportionately more. I remind the hon. Lady of what the IFS data said, which was that if we take into account inequality in all its aspects—that includes tax, tax credits and earnings—in income terms Britain is more equal, or as equal now as it was under a Labour Government. Labour Members may need to explain why the economy got into that position when they were in office, but that is what the independent sources tell us.

In addition to the tax allowance, the other key step has been protection of the minimum wage and the Low Pay Commission. I was alarmed by comments made yesterday by the Leader of the Opposition about the minimum wage. I am not one of the people who wants to trash everything that the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) did when in office. There were some mistakes but also some good things, not least making the setting of interest rates independent through the central Bank—a very positive step. Supporting science was another positive step, as was the establishment of the Low Pay Commission as a mechanism for deciding what is in the national interest as far as the minimum wage is concerned, and how we balance the perfectly natural wish of working people to see their wages rise with the overall interests of the economy and employment.

What was alarming about the comments of the Leader of the Opposition yesterday was that he now wishes to turn that valuable inheritance into a political football. I think he originally said that he would determine politically that there should be an £8 minimum wage, regardless of the conditions of the economy. Yesterday it was “at least £8”, but why not £8.50, £9 or £10? We could all bid in a Dutch auction on the minimum wage, but it would be ruinous for the economy.

Small Business, Enterprise and Employment Bill

Debate between Vince Cable and Debbie Abrahams

Wednesday 16th July 2014 Commons Chamber

[Vince Cable]

The point of access for people who have such concerns is the pay and work rights helpline, which is free, so the first stage of remedying those faults and getting an investigation into illegal activity does not cost anything. The tribunal is a different process as that involves dismissal, but if we are concerned with remedying abuses of the minimum wage, we have a system in which complaints can be made free of charge—there is access to the system—and in which there is effective and prompt enforcement.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

Is the Business Secretary aware, though, that the number of employment tribunals has decreased by 80% since the introduction of these charges?

[Vince Cable]

Yes, I am aware of a substantial fall in numbers. There are several reasons, which we are currently investigating, one of which could be connected with fees. Another reason is that earlier legislation sought to introduce an arbitration mechanism through ACAS as a first port of call. As I am sure that the hon. Lady will realise when she studies the figures, there has been a very big increase in the number of cases going through ACAS, as I recently discussed with its chair. That is exactly as we wished; to ensure that we headed off a legalistic process and that people were able to remedy their disputes in a more successful way.

Amendment of the Law

Debate between Vince Cable and Debbie Abrahams

Thursday 20th March 2014 Commons Chamber

[Vince Cable]

We are well aware of some of the problems that arise with zero-hours contracts. That is why, as the hon. Gentleman knows, some months ago I commissioned a full consultation on dealing with abuses. What has come out of that consultation suggests that it is actually a very complex story. A lot of workers benefit from being on zero-hours contracts and want them to continue. Many do not and do encounter abuse. I am sure that before the end of this Parliament, Members will have an opportunity to vote on measures designed to deal with those abuses.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

Will the Secretary of State confirm what his colleague, the Chief Secretary to the Treasury, had difficulty in doing the other day: confirm that the employment rate is still below pre-recession levels?

[Vince Cable]

My understanding is that the employment rate, if the hon. Lady is talking about the total adult population in work, is now at its highest level ever—higher even than in the United States, which is famed for a flexible labour market.

I am surprised that Opposition Members feel that there are issues to pursue. [Interruption.] Somebody muttered “Immigration”. Last year, overwhelmingly the largest number—well over 90%—of jobs went to British workers. I do not know if they have studied those figures.

Job Insecurity

Debate between Vince Cable and Debbie Abrahams

Wednesday 5th February 2014 Commons Chamber

[Vince Cable]

It is not clear to me from the intervention whether we are talking about avoidance or evasion. I need to be clear before we take action, so if either the hon. Gentleman or the hon. Member for Darlington (Jenny Chapman), or both, give me the details, I will deal with the issue.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

I am grateful to the Secretary of State for giving way; he is being generous with his time. Is he aware that the health effects of insecure employment are exactly the same as those for people who are unemployed? He will be aware that mental health problems, as well as physical health problems such as cardiovascular disease, are associated with unemployment, but there is clear evidence that insecure work also has these detrimental effects. Has his Department made any assessment of the effects not just on individuals—which can obviously be traumatic if they have a myocardial infarction, for example—but on the health service?

[Vince Cable]

Yes, we are well aware that insecurity in general has negative health effects. It is important, therefore, that we restore security.

It is worth quoting a study that was carried out a year or so ago, which contrasted people’s attitude towards their work now with their attitude roughly a decade ago, in 2003-04. The workplace employment relations study said that despite recession, the level of work satisfaction is higher than it was before. Of course, these are qualitative judgments and we cannot quantify these things, but I accept the basic point—we need job security and confidence—so let me take the various policy issues raised in the motion, and that the Opposition spokesman raised.

We are already dealing with some of the issues the hon. Gentleman raised, as he well knows. The consultation on zero-hours contracts will finish on 13 March. We have made it clear that we would like to take action on exclusivity. We are discussing the practicalities of that and I will return to the House to report on it. He refers in the motion to penalties for minimum wage abuse. He may recall that I explained to the House just over a week ago—I think I was facing the shadow Chief Secretary —that the penalties are being quadrupled. We are bringing forward primary legislation that will extend the penalty system per worker, rather than per company, which will potentially be much more prohibitive.

Contrary to what it says in the motion, we are looking at local enforcement. Joint actions between Her Majesty’s Revenue and Customs and local councils are already taking place. Again, we have acknowledged that there are issues with false self-employment. The Treasury has admitted that this is a potential area of abuse. It has investigated it and a consultation is going out on how we can deal with the problem. Therefore, a lot of the issues raised in the motion are already being dealt with, as I think the shadow spokesman is well aware.

However, I want to deal with the areas where the hon. Gentleman reheats some of the criticisms of actions we took in the past. On the broad issue of employment rights, I have always made it clear that the hire and fire culture is not something I or we want to see. The people who argued that introducing a hire and fire culture into business was the only way to create employment have been proved as comprehensively wrong as the people who talked about a triple-dip recession, which is why we have not followed their advice.

It would also have been gracious to acknowledge that in some respects employment rights have been massively enhanced, and in two respects in particular: shared parental leave and paternity leave, and extending the right to flexible working. This affects hundreds of thousands of workers and potentially millions, whose rights at work have as a consequence been entrenched.

Oral Answers to Questions

Debate between Vince Cable and Debbie Abrahams

Thursday 7th February 2013 Commons Chamber

[Mike Gapes (Ilford South) (Lab/Co-op)]

2. In how many months net lending to businesses has (a) increased and (b) fallen since January 2011.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

12. In how many months net lending to businesses has (a) increased and (b) fallen since January 2011.

[The Secretary of State for Business, Innovation and Skills (Vince Cable)]

Figures from the Bank of England show that between January 2011 and December 2012 lending to businesses by UK banks increased in six months, and decreased in the others. The Government and the Bank of England are working to increase lending across the economy, for example through the funding for lending scheme and the new business bank.

--- Later in debate ---

[Vince Cable]

Certainly, the decline in net lending to SMEs is a serious issue, which I frequently refer to. It is a genuine problem and Government schemes have provided support in a variety of ways, including about £7 billion of net lending and £1 billion alone from the enterprise guarantee scheme.

Before we are lectured on this, we need to go a little further back and remember who was in charge when the banks collapsed and the lending crisis erupted. The hon. Gentleman may recall, given that, like me, he has been a Member of the House for some years, the Cruickshank report of 2000, which pointed out that the banks were overcharging their business customers, providing a poor service and making excess profits. The last Government had an opportunity to reform the banking system then. They did absolutely nothing about it, which is why we are in this mess today.

[Debbie Abrahams]

Small and medium-sized enterprises in Oldham have told me how they are struggling to access finance. We now know from Bank of England data that bank lending fell by £18.6 billion last year. On top of this, SMEs were owed more than £36 billion in late payments in 2011. Will the Secretary of State back an inquiry I am launching as part of my Be Fair—Pay on Time campaign to investigate the issues associated with late payments?

[Vince Cable]

I would like to acknowledge the contribution the hon. Lady has made through debates in the House to this very important issue. The Minister of State, my right hon. Friend the Member for Sevenoaks (Michael Fallon), has launched a significant initiative with business in order to reduce that problem. We also have a trade financing scheme, working with Kingfisher to try to ensure that credit flows through the supply chain. The key point is that credit does not depend solely on banks; it also depends on the big primes, whether in the retail sector or in manufacturing, and we are providing substantial support to small companies caught up in that problem.

Executive Pay

Debate between Vince Cable and Debbie Abrahams

Monday 23rd January 2012 Commons Chamber

[Vince Cable]

The hon. Gentleman is absolutely right, although we have of course already introduced principles governing remuneration in the public sector, including greater transparency, ratios and things of that kind. We are now extending those into the private sector where it is appropriate to do so, while recognising, as he implied, that in the private sector we need also to give incentives to entrepreneurship and good management.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

The Secretary of State mentioned that he was not accepting the High Pay Commission recommendation to publish the ratio between the highest and the average earners in a company because it was too complex. Will he expand on that please?

[Vince Cable]

That was not the recommendation to which I referred. The commission also made a specific recommendation about a double number between salary and top-up to salary. For a variety of reasons, we do not feel that being quite so prescriptive is appropriate, but that was the recommendation to which I referred and which we were not able to take forward.