Jobs and Work

Debate between Vince Cable and Tom Clarke

Wednesday 11th June 2014 Commons Chamber

[Vince Cable]

I accept the point that there are regional differences in the pace at which the recovery is happening. As it happens, of the four nations in the UK, Scotland and Wales are growing more rapidly than the UK average. However, Northern Ireland is not. I know that there is a debate about corporation tax. I do not think that is the central issue. The problem in Northern Ireland, as the hon. Gentleman well knows, is that two major banks are bad banks and are seriously contracting lending to small business. I am trying to work with the Northern Ireland authorities to assist with that.

[Mr Tom Clarke (Coatbridge, Chryston and Bellshill) (Lab)]

The right hon. Gentleman has not so far given the figures on zero-hours contracts. He will know that the Office for National Statistics has said that 1.4 million people are on those contracts, but the Government say that only 250,000 are. What is the reason for the difference?

[Vince Cable]

I was going to talk about zero-hours contracts later, but since the right hon. Gentleman has asked me the question, I will try to explain. There are very different estimates of zero-hours contracts. The ONS gives very different figures from other surveys. They range from roughly 2% to 4% of all jobs. It is worth mentioning this in passing. The shadow Secretary of State has been quite modest about his own contribution. He has been in correspondence with the statistical authority, which rebuked him for being misleading in terms of the trend in zero-hours contracts. It is a significant problem, and in a few moments, I will come to how we want to address it.

Let me move on to the underlying question in relation to zero-hours contracts and to what the Opposition are trying to say about living standards. What has always surprised me in these debates is that people are surprised that living standards fell in the wake of the financial crisis. Let me rehearse some basic facts. In the 2008-09 crisis, the British economy contracted by over 7%—more than any other major economy. It was the worst shock to our country—worse than in the 1930s. It was only after the first world war that we had a comparable hit to our economy. It was an enormous disruption, with massive implications for people’s jobs and living standards. It did happen under the last Government. It was not entirely their mistake, but it was on their watch and they had a substantial responsibility for it.

That contraction of output inevitably translated into people’s living standards, and median wages in real terms contracted by about 7% as a result of the crisis. That has been the impact on living standards. It is clear. What is different from previous recessions is that the people at the bottom end of the scale have been protected by two things: first, the minimum wage—there is cross-party consensus on that, which I welcome—and, secondly, tax policies that led us to lift large numbers of low earners out of tax altogether.

Let us look at what the combination of those factors has meant and the work of the Institute for Fiscal Studies. It makes the point that the contraction in real take-home pay for people in the bottom 10% was 2.5%. For the people in the middle, it was 6% and for the people in the top 10%, it was 8.7%. That was an essentially progressive response to a major economic crisis. Of course there are still major inequalities of income and wealth. We acknowledge that, but that relates to the top 1%, rather than the top 10%.

How do we strengthen the minimum wage system, which my colleagues and I fully buy into? We decided earlier this year to increase the minimum wage faster than inflation—a 3% increase, the biggest cash increase since before the recession. The Low Pay Commission has issued guidance to secure improvements to the real minimum wage. We accept that one of the main challenges—which the last Government did absolutely nothing about—was enforcement. We inherited a system in which the maximum fine per company was £5,000. Under this legislation, we will strengthen it to £20,000 per worker—a big step up in taking seriously sanctions in respect of the minimum wage. We now have a naming and shaming regime in place, and 30 companies have been named since it was initiated a few months ago, and as a result of much more active intervention by Her Majesty’s Revenue and Customs, we have increased by a factor of 38% the amount of arrears identified and paid to employees. All the things that the shadow Secretary of State is calling for are now being done.

Let me address the specific issue of zero-hours contacts. It is a problem, but let us get it into perspective. Although there are wide variations in the estimated number of zero-hours contracts, we are talking probably about between 2% and 4% of jobs. Of course we do not want people in that type of employment to be disadvantaged, but many take up such employment voluntarily, and particularly for students and older workers, it is an attractive system. For some, however, it is exploitative and as a result of our consultation—one of the biggest that the Government have undertaken, with over 36,000 people responding—it was very clear that there were some points on which action needed to be taken, and we are going to take action on exclusivity.

Blacklisting

Debate between Vince Cable and Tom Clarke

Wednesday 23rd January 2013 Commons Chamber

[Vince Cable]

I should like to go through the issues that have been raised step by step. Most of them relate to the past. I want to start by describing factually the matters covered by the 2008-09 Information Commissioner’s investigation. He used his powers under the Data Protection Act 1998 to launch an investigation, based on a story in The Guardian newspaper that an intelligence system had been used to vet workers for employment in the UK construction industry. As a result of that, a search warrant was issued in 2008, leading to a search of the premises of the Consulting Association in February 2009. The investigation resulted in the successful prosecution of the Consulting Association for breaching data protection law and it was closed down. The owner, Mr Kerr—now, I think, deceased—was fined £5,000, which was the maximum fine at the time. The levels of fines have now been radically changed. Fifteen enforcement notices were issued against the Consulting Association and some of its user construction companies to stop them collecting and using personal data for vetting purposes.

The investigation looked further, but came to the conclusion that there was no evidence that blacklisting existed in other industries, or that the number of construction workers blacklisted went beyond those in the files secured by the Information Commissioner. In other words, it addressed the question that Members are now trying to raise in their interventions. It is important to reflect that that wholly independent body asked the questions that are now being asked, and that it came to that very clear conclusion.

[Mr Tom Clarke (Coatbridge, Chryston and Bellshill) (Lab)]

I realise that the Secretary of State is attempting to be fair—[Interruption.] I will not divide the House on that, but it seems that way to me—I treat former Labour councillors from Glasgow with the utmost respect. My point is that evidence of blacklisting from that time has only recently come out. People did not know about it or hear about it, so what reaction can they give? I understand that during one of the Scottish Affairs Committee’s hearings a witness revealed that my name was on the list and that I had been described as a communist—me, a former altar boy! How will the Secretary of State deal with information that only emerges today but relates to the past?

[Vince Cable]

I, too, have been called a communist, including since this Government came into office, but I am not demanding an official investigation.

Then there is the question of the ICO’s handling of blacklisted individuals. As I understand it, the ICO—it is a fully independent body, not a Government agency—is trying to contact the individuals on the Consulting Association’s blacklist and help them with the long-term consequences. I repeat—this point seemed to get a little lost earlier—the ICO is a fully independent regulatory body, so we cannot pursue individual cases. I understand that there are some genuine practical problems. For example, some of the names cannot be deciphered and addresses are not available in some cases. However, my understanding is that the ICO is doing its best to trace every individual concerned and to assist them.