Opposition Day — [7th Allotted Day] — Zero-hours Contracts

Part of the debate – in the House of Commons at 3:34 pm on 16th October 2013.

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Photo of Ian Murray Ian Murray Shadow Minister (Business, Innovation and Skills) 3:34 pm, 16th October 2013

It is always a great delight to follow my good and hon. Friend Ian Lavery, who I tend to follow in these debates—he always gets taken last, although I am sure that can be dealt with in another place.

This afternoon’s debate has added yet another dimension to the cost of living crisis that is engulfing the UK. It is not just the weekly shop, the energy bill or travel costs, but the hidden contributor of job insecurity. It is worth reminding ourselves that the UK had the third most flexible employment regime in the OECD even before this Government came to power and that there is a direct correlation between job insecurity, consumer confidence and economic growth. In fact, the Lib Dem Member for North Norfolk (Norman Lamb), the former employment relations Minister, said that any changes to the employment regime that undermined consumer confidence and created job insecurity would be “crazy”. He later got the employment relations ministerial brief and proceeded to do exactly what he said he would not do.

Many Members have discussed the plethora of other changes that have been made to the employment regime. It is worth reflecting on those changes, because they feed into the insecurity at work, which many hon. Members have mentioned, that is a symptom of zero-hours contracts. We have had—this is not an exclusive list, but gives an indication of why people feel more insecure at work—the qualification period increased to two years, collective redundancy cut to 45 days, fees for employment tribunals, the consequences of which were mentioned by my hon. Friend Ian Lucas, compensated no-fault dismissal by the back door and settlement agreements. We have also had shares for rights, compensation and employment tribunals slashed, lay people taken off employment tribunals and employment appeal tribunals, TUPE regulations diluted—that is perhaps partly why the problem of zero-hours contracts has increased—the Agricultural Wages Board abolished, national minimum wage enforcement slashed, the very existence of the Gangmasters Licensing Authority questioned, and health and safety taken back to before the Boer war. That is a cocktail of job insecurity, which is highlighted by the fact that we are having this debate on zero-hours contracts.

A lot of Members have talked about whether we should have done more in government. Many hon. Members have made that criticism, but it is a false criticism, because they are missing the explosion of zero-hours contracts in recent years and the underemployment that we are seeing across everyone’s constituency.

Zero-hours contracts are not a new phenomenon—we have mentioned that already. They work for some employees—let us put that on the record; of course they do—but let us be clear, and say time and again, that the exploitative nature of such contracts has to be dealt with. That is what we need to do in the House today—and, indeed, in anything the Government bring forward. It is also not hard to see why zero-hours contracts are attractive to employers. They allow for maximum flexibility. However, in many cases, we are seeing the transfer of business risk—this is an important point—in a difficult economy from the employer to the employee. We should not hide behind the word “flexibility” so that it can mean exploitation.

Let me highlight a couple of case studies. One employee of a cinema firm—I will not mention the firm involved—said:

“I was offered part-time work with a zero-hours contract. It was all down to the whims of the managers whether or not you got work that week, which is just impossible to live with.”

He continued:

“They were very manipulative. And they employed so many people that we ended up getting about three hours a week. It seems as though zero-hours contracts are being used more and more to get as many staff as possible without any intention of using them…or giving us the hours we need to live and earn” the income we need to survive.

Let us look at why the Government are so interested in zero-hours contracts and flexibility. Could it be because they have a flexible Cabinet? They have a part-time Chancellor. Indeed, I might even contest that the Business Secretary himself is on a zero-hours contract with the Liberal Democrats so that he can work full time for the Tories to deliver all these attacks on workers’ rights. Whether he likes it or not, that seems to be the case he is putting through. I wonder whether this issue also epitomises the kind of economy that this Government are looking to achieve—a low-wage, low-skilled, low-productivity work force that has insecure employment, to provide maximum flexibility and start a hire-and-fire culture. The Minister might come to the Dispatch Box and dispel that rumour, but it was only 24 hours ago that he suggested that small business should be exempt from any employment law whatever. If that is not creating a hire-and-fire culture, I do not know what is.

Let us reflect on the Government’s response to this issue. Although I appreciate the tone of the Secretary of State’s earlier comments—many have mentioned that—the record is: three BIS officials working part time on this issue, “speaking informally” to stakeholders, with a consultation promised some time in November. The Business Secretary said he hoped it would start some time in November, and I hope that he will bring forward strong proposals.

Many Members have spoken about issues in their constituencies and about what zero-hours contracts mean to their constituents. My hon. Friend Mrs Riordan made a powerful contribution. She made the critical point that most employers in Halifax look after their staff. I think that the vast majority of employers leave home every day to go to work with the intention of looking after their staff so that they can have a productive work force. I was struck by my hon. Friend’s story of the young person who was desperate for a job and paid to travel to work, only to be told that his name was not on the list. He had to travel home again at his own expense.

I am disappointed that Guy Opperman is no longer in his place. He made a deplorable contribution, comparing people on zero-hours contracts with his zero-hours contract as a barrister. I hope that the Minister will agree that that is really not a true comparison with the problem we are looking at. If the hon. Gentleman wanted to complain about being on a zero-hours contract as a barrister—[Interruption.] Here he comes! Perhaps he was picking up his next £10,000-a-day contract while he was out of the Chamber.

My hon. Friend Paul Farrelly has always been a strong proponent of the arguments that we are putting forward today. He rightly concluded that zero-hours contracts needed to be used, but he also argued powerfully that, if major private sector employers such as Tesco, Morrisons and Sainsbury’s do not need to use them, others such as Wetherspoon’s and Burger King should not need to either. This is all about fairness in the workplace.