Good Work Plan

– in the House of Commons at 6:03 pm on 17 December 2018.

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Photo of Greg Clark Greg Clark The Secretary of State for Business, Energy and Industrial Strategy 6:03, 17 December 2018

I would like to make a statement on the good work plan published today, which sets out the Government’s vision for the future of the UK labour market and how we will implement the recommendations arising from the Matthew Taylor review of modern working practices.

The Taylor review was commissioned by the Prime Minister to examine the current labour market and the employment law framework to help us understand the opportunities of future working practices as well as to identify areas where it is not working for everyone. The Government responded to the review in February, accepting the vast majority of the recommendations. Alongside this response, we also launched four consultations to seek views on how best to implement the recommendations. I am very grateful to everyone who took the time to respond; their insights have been invaluable in informing our policy development.

The good work plan I am publishing today sets out a programme for ensuring the UK labour market continues to thrive in the future. The UK labour market has a very positive record in recent years. Since 2010 we have higher employment and lower unemployment in every region and every nation of the United Kingdom, and wages are now growing at their fastest pace in almost a decade. This success has been underpinned by an employment law and policy framework that combines flexibility with protections for workers.

New ways of working and the rise of new employment models offer great opportunities, including innovative products and services for consumers, as well as new ways in which individuals can find work, earn a living and develop their talents. Our industrial strategy set out a long-term plan to embrace the opportunities presented by these changes and to boost the productivity and earning power of people throughout the UK.

Good work and developing better jobs is at the centre of the vision of the industrial strategy, so I am proud to be the first Secretary of State to take responsibility for promoting the quality of work as well as the creation of new jobs. I have written to the independent Industrial Strategy Council to ask for its participation in considering the best ways to measure the quality of work in the United Kingdom, and I am very pleased that Matthew Taylor serves as a member of the new Industrial Strategy Council.

Another core element of the quality of work agenda is ensuring we address the challenges for employment law and policy that the Taylor review identified. Most UK employers do the right thing and ensure their workers benefit from the rights and protections to which they are entitled. We will not allow these high standards to be breached by a minority who try to deny workers their just entitlements.

Among these reforms are steps to improve clarity for both employers and workers. Matthew Taylor recommended that the Government should do more to help individuals and businesses understand their rights and obligations. He highlighted that the existing employment status tests have contributed to a lack of clarity for both individuals and employers. We agree with this conclusion and will legislate to make improvements to reflect the reality of modern working relationships.

Matthew Taylor also recommended that renewed effort should be made to align the employment status frameworks for the purposes of employment rights and tax to ensure that the differences between the two systems are reduced to an absolute minimum. Again, we agree and will bring forward detailed proposals to align the two frameworks. We are also committed to addressing what Matthew Taylor termed one-sided flexibility, where too much risk has been transferred to the individual, sometimes to the detriment of their financial security and personal wellbeing. We will legislate to give all workers a right to request a more predictable contract and address the obstacles employees can face in building up continuous service. We will also legislate to end the injustice faced by waiters and waitresses and other staff in hospitality whose tips left by customers for them are diverted to their employers.

Another fundamental reform that Matthew Taylor proposed was the repeal of the so-called Swedish derogation, which exempts agency workers from equal pay requirements. Therefore, the Government are today bringing forward legislation to prevent this type of contract from being used to avoid meeting the legitimate rights of agency workers. We are also today laying legislation to extend workers’ rights, including the right to a written statement and making this available to all workers from day one. We are also bringing forward legislation to provide workers with a longer reference period for the calculation of holiday pay and reforming regulations to make it easier for employees to have their voice heard in the workplace. This demonstrates how we are putting the good work plan into action immediately.

We also recognise the vital role effective enforcement plays in ensuring confidence to challenge when the law and regulations are broken and in creating a level playing field between businesses. Matthew Taylor called on the Government to improve access to justice in the workplace. We have already committed to extending state enforcement on behalf of vulnerable workers to the underpayment of holiday pay, and the good work plan sets out how this approach will mirror the tough financial penalties and enforcement approach that already applies to the underpayment of the national minimum wage. We are also taking steps to improve the effectiveness of employment tribunals, quadrupling the penalties that they can impose for persistent breaches of employment law. We want to continue to improve the enforcement landscape further, and in the light of forthcoming policy changes, we will also consider the case for creating a new single labour market enforcement agency, to better ensure that vulnerable workers are more aware of, and can exercise, their rights and that businesses will be able to deal with a single body on matters relating to their workplace.

The good work plan sets out a vision for the future of the UK labour market—a labour market that rewards people for hard work, that celebrates good employers and that is ambitious about boosting productivity and the potential for everyone in the UK to improve their earnings. I am grateful to Matthew Taylor and his panel, as well to the many other individuals and organisations that have contributed to the review of modern working practices and our subsequent consultations. Their input has been invaluable in helping the Government to ensure that the UK labour market is ready to embrace future opportunities without detriment to workers’ rights. I would also like to thank the Business, Energy and Industrial Strategy Committee, the Work and Pensions Committee and the Scottish Affairs Committee for their continued contributions to the scrutiny of the recommendations and for the recommendations that they have made.

Alongside the good work plan, the Government are today publishing their response to the first full strategy from the director of labour market enforcement. Sir David Metcalf’s strategy was published on 9 May 2018 and made 37 recommendations on labour market enforcement and raising awareness of employment rights. The Government’s response accepts the vast majority of the recommendations and sets out the steps that the Government will take forward on raising awareness of employment rights, on improving intelligence gathering on abuses of those rights and on strengthening enforcement efforts. I will be placing a copy of this document in the Library of the House. The Home Secretary and I look forward to working with Sir David as the Government implement the recommendations we have accepted and as he prepares to set clear strategic priorities in the 2019-20 labour market enforcement strategy.

As Matthew Taylor concluded, the British model works. We have high employment, low unemployment and a long-standing and proud record of high standards for workers. We will consistently be in the vanguard of reform to maintain this reputation as new technologies and new opportunities for workers become available. This response to Taylor is in keeping with these high standards, and I commend this statement to the House.

Photo of Rebecca Long-Bailey Rebecca Long-Bailey Shadow Secretary of State for Business, Energy and Industrial Strategy, Member, Labour Party National Executive Committee 6:12, 17 December 2018

I thank the Secretary of State for giving me advance sight of his statement, but behind his declaration on high employment lies a dark truth. Nearly 4 million people are in insecure work, with 1.1 million working in the gig economy. At a time of low wages, stagnating productivity and endemic financial insecurity across the UK, I had hoped for something big today. I was hoping for proposals that would not only make our workforce feel secure but ensure that their human capital was genuinely valued as the linchpin of Britain’s industrial strategy. Proposals for a labour inspectorate, the abolition of the Swedish derogation and ensuring that workers keep their tips were among Labour’s policies to transform our labour market, so I am pleased that, after a hard-fought campaign by Labour Members and our trade unions, these points have finally made an appearance in the Government’s good work plan. However, as the TUC stated today, despite these small victories, the remaining

“reforms as a whole won’t shift the balance of power in the gig economy.”

Let me deal with just a few of the proposals.

First, the good work plan states at the outset:

“The Prime Minister has committed that we will not only maintain workers’ rights as the UK leaves the EU, but enhance them”,

but even that opening paragraph is a little—shall we say?—constructive with reality. The Government’s withdrawal agreement fails to live up to this commitment on workers’ rights, and the Institute for Public Policy Research has stated that

“the non-regression clause will not maintain current protections in full, enforcement procedures would be ineffective and if the EU were to raise standards, there would be no requirement for the UK to follow suit”.

Can the Secretary of State confirm today that if standards on workers’ rights increase within the EU, UK standards will follow suit?

Secondly, it appears that the critical point on employment status is equally ambiguous. People on the margins need to know whether they are employees, workers or neither. Do they qualify for unfair dismissal and redundancy or not? The Government are committing to legislating to improve the clarity of the tests, but there is no detail. Can the Secretary of State confirm the legal principles on which each status is likely to rest?

Thirdly, the Government will allow workers on zero-hours contracts to request a more predictable and stable contract. That all sounds rather lovely, but the Secretary of State must know that an ability to request stable hours exists now. What does not exist is an obligation on the employer to meet such a request. The Government’s paper is silent on that point. Will the Secretary of State confirm that the proposed draft legislation will address that deficiency? If it fails to do so, zero-hours contract workers will—as the TUC so poetically put it today—have

“no more leverage than Oliver Twist”.

The fourth critical issue is enforcement, on which there is again very little detail in the Government’s plan. This is not simply a question of shuffling the deck. The Government need to ensure that the enforcement agency has power and resources. In the light of the already swingeing cuts to bodies such as the Health and Safety Executive, can the Secretary of State confirm what financial commitments are being made to ensure that this proposal is financially supported?

Finally, on the proposal for increased penalties following successful employment tribunal claims, I am not against the principle but I fear that this is just window dressing. The TUC has stated that the current system for enforcing employment tribunal awards is not fit for purpose, with 35% of successful claimants not receiving any compensation. Can the Secretary of State tell us how increasing fines will address this? Will he also tell us what additional action he is taking to address the efficacy of tribunal award enforcement? The horrific tales of insecure workers swirl around us like passages from a Charles Dickens novel, from delivery drivers being forced to urinate in bottles to zero-hours staff giving birth in workplace toilets. The Government’s proposals were an opportunity to improve the lives of those workers, but sadly they fall dramatically short, and those workers face a Dickensian future unless the Government take serious action to protect and enforce the intrinsic value of their human capital within our economy.

Photo of Greg Clark Greg Clark The Secretary of State for Business, Energy and Industrial Strategy

I would have thought that the hon. Lady might have congratulated Matthew Taylor, who worked for her party in the past. Along with his panel, he has devoted himself to producing a report that most people conclude is a substantial one. He has made a series of far-reaching recommendations, which we are enacting today. The central basis of his report is to reflect on the fact that we should build on success. He refers to the UK’s successful record in creating jobs, including flexible jobs, that open up work to people with different needs. That is an important step forward that I would have thought the hon. Lady welcomed. When it comes to the condition of employees and workers in this country, Matthew Taylor noted that, far from the Dickensian caricature that she fell into the trap of describing, the average take-home pay for someone in full-time employment in this country, if tax levels and tax credits are taken into account, is higher than in the rest of the G7. We also have higher employment than at any time in our history and lower unemployment than at any time in 40 years, and the hon. Lady should have welcomed that.

The hon. Lady mentioned zero-hours contracts, but what she did not mention—[Interruption.] She mentioned the gig economy, by which I think she was referring to zero-hours contracts. At the moment, 2.4% of workers have flexible zero-hours contracts, and the number is falling. It has fallen from more than 900,000 a year ago. The key thing is that two thirds of those workers do not want an increase in hours. Nearly 20% of them are in full-time education. Matthew Taylor therefore concluded correctly that to ban zero-hours contracts, as the hon. Lady would, would do a disservice to, and go against the interests of, the people who benefit from them.

As for the scale of our response, the last set of measures to change and reform employment rights to this extent came over 20 years ago in the Employment Rights Act 1996 and not, coincidentally, under the previous Labour Administration, reflecting the fact that it is always Conservatives in government who put in protections for workers. The Labour party can criticise, but it did not take the opportunity to make the reforms that the hon. Lady mentioned. The hon. Lady also mentioned the alignment of the test for employment and for taxation. Matthew Taylor was clear in his report that it is a complex matter that will take some time to bring into effect and that we should consult carefully on it, and the Select Committees have endorsed that recommendation. We have said that we are committed to ending the disparity and to bringing the difference to a conclusion, and she should welcome that.

Finally, the hon. Lady mentioned the European Union, referring to the fact that we will be able to set our own employment policies once we leave the European Union. The Prime Minister has been clear that not only will we not reduce the protections that workers enjoy, but we will increase them, and today shows that. We are laying legislation this very day that goes far beyond the rights that are currently available in the European Union. The hon. Lady should have confidence in the ability of this House and this country to lead the world in employment rights, and I am proud that our Government are doing it.

Photo of Maria Miller Maria Miller Chair, Women and Equalities Committee, Chair, Women and Equalities Committee

I welcome my right hon. Friend’s statement on how he and the Government plan to take forward the Taylor review. He is right that too much risk has been transferred to the individual in many circumstances, but I am a little puzzled as to why there is still so little action to strengthen protections for pregnant women. That action was promised around two years ago following a Women and Equalities Committee inquiry into maternity discrimination, which highlighted the fact that more than 50,000 women a year leave their jobs because they are pregnant. Will my right hon. Friend update the House on what is being done to enhance such protections and to ensure that more women who are contributing so much to our economy are able to stay in work even when they are pregnant and afterwards?

Photo of Greg Clark Greg Clark The Secretary of State for Business, Energy and Industrial Strategy

My right hon. Friend, who is Chair of the Women and Equalities Committee, will be pleased to note that the package announced today is not the first or the only set of powers that will strengthen workers’ protections. The Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend Kelly Tolhurst, will respond shortly and enthusiastically to the recommendations made by my right hon. Friend Mrs Miller, and I hope that she will welcome the further extension of protections for pregnant women.

Photo of Drew Hendry Drew Hendry Shadow SNP Spokesperson (Business, Energy and Industrial Strategy)

I thank the Secretary of State for advance sight of the statement, which contained a couple of things to welcome. First, the Scottish National party has long called on the Government to repeal the Swedish derogation loophole and ensure that agency workers are protected and treated fairly. It is therefore welcome news that the Government are closing a loophole that has allowed unscrupulous employers to circumvent equal pay entitlements for far too long. Secondly, we are pleased to see an increase in fines for employers who breach workers’ rights, which has been long in the waiting.

However, there are measures that miss the mark or are missing completely from the statement. There is nothing to tackle zero-hours contracts, but perhaps the most disappointing of all is the absence of any meaningful action. It is extraordinary that this Government say that they have a good work plan and yet they utterly fail to tackle zero-hours contracts. The measures also do not address the damage done to workers’ rights by the regressive Trade Union Act 2016, which was designed to strike at the heart of trade unions’ abilities to organise and support workers. The SNP believes that a modern and progressive approach to industrial relations and trade unionism is at the heart of being able to achieve fair work.

The measures also do nothing to ensure that people are paid a real living wage. In addition to expecting people to work for less than a real living wage, this Government are presiding over a period of wage growth decline. Contrast that with the Scottish Government who have got behind the real living wage accreditation scheme, which has led to over 1,000 employers now paying the real living wage, covering nearly 82% of workers in Scotland. The Secretary of State also failed to take any action to end the discrimination of young people in the labour market, which my hon. Friend Alison Thewliss has long called for.

The statement does nothing to tackle unpaid work trial shifts. The Government call this a good work plan, but they still refuse to end the practice of unpaid trials, and the Unpaid Trial Work Periods (Prohibition) Bill of my hon. Friend Stewart Malcolm McDonald needs support. The measures also offer no protections for gig economy workers, but the Secretary of State could do that by supporting the progress of the Workers (Definition and Rights) Bill of my hon. Friend Chris Stephens, which would define the status of workers in the law. This Government should be doing much more work on workers’ rights, and they need to bring it forward.

Photo of Greg Clark Greg Clark The Secretary of State for Business, Energy and Industrial Strategy

The hon. Gentleman will know that the Scottish Affairs Committee’s inquiry into the future of working practices in Scotland was warm in its endorsement of the Taylor report’s key recommendations that we are implementing today. I therefore hope that he will continue to support it.

The hon. Gentleman mentions zero-hours contracts, which were the subject of one of Matthew Taylor’s central pieces of analysis. On the basis of rigorous and extensive research across all parts of the United Kingdom, he concluded:

“To ban zero hours contracts in their totality would negatively impact many more people than it helped.”

If we commission an independent report that has authority and depth of research and it makes such a clear recommendation, we ought to act on it. That is what we are doing in our response. The hon. Gentleman also mentioned the national living wage, but he did not refer to the fact that 117,000 people in Scotland have gained over £2,750 since its introduction. However, I note of course that the Scottish Government’s decision to increase taxes on working people has meant that over a million Scots are actually receiving less in take-home pay than they otherwise might. If we are looking at the welfare of workers in Scotland, we need to look at what they pay in tax as well.

It gives me no pleasure to point out to the hon. Gentleman that Scotland under the SNP has had the slowest rate of job growth of all the nations and regions of the United Kingdom. Indeed, if Scotland had matched the UK’s rate of job growth, nearly 200,000 more Scots would have a job. It is right to build on Matthew Taylor’s analysis of how to build on the success while extending protections. I look forward to working with Derek Mackay and the Scottish Government, because many aspects of the report, such as education policy, are relevant to people’s ability to earn more. Through our industrial strategy, we will work together, but a little more humility from the hon. Gentleman in his criticisms might be appropriate.

Photo of Robert Halfon Robert Halfon Chair, Education Committee, Chair, Education Committee, Chair, Education Committee

Amid all the Brexit fog, I have to say that this is the best news I have heard from the Government for weeks. This is an example of the Conservatives truly being the workers’ party of the United Kingdom, and I strongly welcome what the Secretary of State said about agency workers, because many constituents have suffered as a result of the Swedish derogation.

Turning to apprentices, a fifth of apprenticeships at levels 2 and 3 were not paid the apprentice minimum wage, which was highlighted by the Education Committee in our report on apprentices. Her Majesty’s Revenue and Customs has prosecuted fewer than five employers, and Sir David Metcalf, the Director of Labour Market Enforcement, said that we should increase fines and seek more criminal prosecutions against the companies involved. On top of the excellent work that Sir David has done, will the Secretary of State ensure that apprentices’ rights are first and foremost in his work?

Photo of Greg Clark Greg Clark The Secretary of State for Business, Energy and Industrial Strategy

I am grateful to my right hon. Friend for his endorsement. The great reforms being made in response to, in this case, a very good report are happening at pace—we are tabling legislation this very day—but he, like me, is sometimes frustrated that the reforms do not get the attention they merit, but he gives me the opportunity to draw the House’s attention to them today.

My right hon. Friend is about apprentices. A key part of the industrial strategy is to increase the quality and the number of apprentices, to which he has made a distinguished contribution. It is vital that apprentices should be paid what they are due in terms of the minimum wages. We have doubled the enforcement budget for Her Majesty’s Revenue and Customs, and the measures we have set out—we are working very closely with Sir David Metcalf—will make sure it is clearly understood by every employer that paying the minimum wages, whether for apprentices or others, is not optional but essential if they are to trade in this country.

Photo of Rachel Reeves Rachel Reeves Chair, Business and Trade Committee, Chair, Business and Trade Committee, Chair, Business, Energy and Industrial Strategy Committee

The Select Committees on Business, Energy and Industrial Strategy and on Work and Pensions concluded that workers frequently rely on employment tribunals to enforce their rights and recommended punitive fines on employers for breaches of law. The Government are increasing the potential payouts for those who get to tribunal, which I warmly welcome, but they are refusing to reduce tribunal fees. Will the Secretary of State pledge to look at that again? Will the Government listen to Sir David Metcalf, the director of labour market enforcement, who said today that he is disappointed that the Government have rejected his recommendation of greater penalties for non-compliance in paying the minimum wage?

Will the Secretary of State tell us how many more cases need to be won against employers like Uber, Hermes and Addison Lee before the Government act, name and shame and properly punish these businesses that wrongly classify their workers as self-employed and deny them the rights to which they are entitled?

Photo of Greg Clark Greg Clark The Secretary of State for Business, Energy and Industrial Strategy

I am grateful to the hon. Lady, the Chair of the Business, Energy and Industrial Strategy Committee, for her comments and for welcoming our increase in penalties. It is essential that we send a message that people’s employment rights are non-negotiable and that they must be paid.

We work closely with Sir David Metcalf, a man for whom I have the greatest admiration. The reason for not increasing, at this stage, the penalties available to the authorities for non-compliance with the national minimum wages is that the penalties were increased about 18 months ago. We have not ruled it out, but we have said that we will look at the effect of the increase and consider it.

The hon. Lady will be aware that a big increase in penalties for employers that persistently breach the verdicts of employment tribunals would be very welcome. Again, we will keep under review the employment tribunals regime to make sure that people have access to the justice they need, but when her Committee considers its response to the report I hope it will agree and endorse what is a substantial package that, in many ways and in many respects, goes beyond what was proposed both by Matthew Taylor, important though his contribution has been, and by the Committee. We have gone further than many people expected, which is quite right given the importance of employment rights in this country.

Photo of John Howell John Howell Conservative, Henley

In 1961, under another Conservative Government, we signed the social charter, a Council of Europe treaty that is still in force and that enshrines workers’ rights. Will my right hon. Friend confirm that the rights he is now talking about follow in that same legal tradition?

Photo of Greg Clark Greg Clark The Secretary of State for Business, Energy and Industrial Strategy

I am delighted to have a history lesson from my hon. Friend. I do not think he was there at the time to witness that important breakthrough, but it is important to remind ourselves, as my right hon. Friend Robert Halfon did, that the Conservative party has always believed that free enterprise should be associated with high standards for consumers, for workers and for members of our community. That is very much in our tradition, and it has not required the imposition from outside this Parliament. We embrace our responsibilities with enthusiasm.

Photo of Frank Field Frank Field Chair, Work and Pensions Committee, Chair, Work and Pensions Committee

As the Secretary of State knows, we have had reports from Select Committees and from Andrew Forsey and myself on how the gig economy works to the detriment of careworkers, Hermes couriers, Uber drivers, DPD couriers, Parcelforce drivers and Deliveroo drivers who are forced into self-employment against their will. When his package of reforms hits the statute book, will he be able to give all those workers a guarantee that no one in this country will be forced into self-employment against their will?

Photo of Greg Clark Greg Clark The Secretary of State for Business, Energy and Industrial Strategy

I am grateful to the right hon. Gentleman and the Work and Pensions Committee for their proposals. He and Rachel Reeves, the Chair of the Business, Energy and Industrial Strategy Committee, have suggested a Bill so that these measures could be enacted straightaway. We have acted in that spirit, and this day we have tabled a large number of statutory instruments to bring them into effect immediately.

My ambition is exactly as Frank Field says, that the flexibility of the gig economy is offered rather than compelled, and that flexibility, in the words of Matthew Taylor, should be two-sided, rather than one way. That is the intention of this package of reforms. The Work and Pensions Committee will be rigorous in scrutinising the effects, but that is precisely the intention of the reforms.

Photo of James Cleverly James Cleverly Deputy Chair, Conservative Party

Rebecca Long Bailey mentioned the Dickensian and Edwardian eras. Does my right hon. Friend agree that, when we consider the Mines and Collieries Act 1842 that took children out of mines and collieries, the Artisans’ and Labourers’ Dwellings Improvement Act 1875 that cleared the slums and paved the way for the Peabody Trust homes that are loved to this day, and the Workmen’s Compensation Act 1897 that imposed a duty on employers to compensate workers injured at work, this is the party—[Interruption.]

Photo of Eleanor Laing Eleanor Laing Deputy Speaker (First Deputy Chairman of Ways and Means)

Order. This is a statement. We do not have heckling during a statement. The hon. Gentleman is asking a question, and then everyone will have a chance to ask their questions in the same way.

Photo of James Cleverly James Cleverly Deputy Chair, Conservative Party

I will not start again from the beginning. The Conservative party, in government, has more than a century of tradition of protecting and enhancing workers’ right. The Secretary of State’s proposals are in a long tradition of looking to the future and realising the importance of the people whose work underpins our economic growth.

Photo of Greg Clark Greg Clark The Secretary of State for Business, Energy and Industrial Strategy

My hon. Friend is absolutely right. Continuing the historical theme, I would add Shaftesbury’s Factory Acts, which were foundational to ensuring that the industrial revolution could not trample on workers’ rights and that those rights were protected. To bring it further up to date, I pay tribute to Lord Hague’s Disability Discrimination Act 1995, which is also in this firm Conservative tradition that I am proud to be taking forward today.

Photo of Stephanie Peacock Stephanie Peacock Opposition Whip (Commons)

Despite what the Secretary of State says, in the two and a half years since the Prime Minister promised to act on workers’ rights we have had a review, we have had a consultation on the review, we have had a consultation on the consultation and, now, we have a plan but no legislation. The press release refers to building on the Government’s record, but the Government have not yet tabled a Bill. May I offer him my ready-made private Member’s Bill, the Employment and Workers’ Rights Bill, which would immediately end the Swedish derogation, offer insecure workers a proper right to a contract and finally give people in precarious work the security they need?

Photo of Greg Clark Greg Clark The Secretary of State for Business, Energy and Industrial Strategy

The hon. Lady is misinformed. The legislation has been tabled today.

Photo of Mike Wood Mike Wood Conservative, Dudley South

Flexibility in our labour market is to be welcomed but exploitation is not. Sadly this distinction is too often missed by those on the Labour Front Bench in their pursuit of ideological dogma. What assessment has my right hon. Friend made of the impact of banning exclusivity clauses in zero-hours contracts?

Photo of Jamie Stone Jamie Stone Liberal Democrat Spokesperson (Armed Forces), Liberal Democrat Spokesperson (Defence)

I welcome the announcement about the Swedish derogation—it would be churlish not to—but I was surprised that there was no mention in the statement of people with disabilities. If this country is to punch above our weight in an increasingly competitive world, we will have to empower people with disabilities as never before; it would be folly not to use their skills and knowledge in the future. How will the Secretary of State ensure that the 21st century economy works for our disabled people?

Photo of Greg Clark Greg Clark The Secretary of State for Business, Energy and Industrial Strategy

I mentioned the Disability Discrimination Act, which was a landmark piece of legislation. One aspect of enforcement and clarity that the new regulations and legislation will bring in is the right to be free from discrimination, including on grounds of disability, to make sure that that is, first, clearly understood and, secondly, more effectively enforced. This is a further step to promote that very important set of rights for workers.

Photo of Kevin Foster Kevin Foster Conservative, Torbay

I very much welcome the tone and content of the Secretary of State’s statement. Torbay’s economy is very dependent on the tourism industry, where there are not only many gig workers who literally undertake gigs, but those who do part-time or agency work. How does he see the plans he is setting out today striking the balance between the need to have an industry that can employ seasonally and flexibly, and ensuring that workers can have certainty in their employment?

Photo of Greg Clark Greg Clark The Secretary of State for Business, Energy and Industrial Strategy

My hon. Friend speaks from great experience; he knows that the report and these reforms seek to capture the right balance. That includes making sure that the tourist industry, for example—which, to a certain extent, is seasonal—can operate in such a way that it is possible to take people into employment during times of peak demand, and so enable prospering during the year, while recognising that people have a legitimate reason for wanting to build a career in the hospitality sector and giving them the right to request a stable contract.

I want to remind the House of the emphasis that Matthew Taylor puts on good work, looking at how we can increase the level of skills and opportunities for advancement in work. That is an important part of the industrial strategy and of the reforms we are making. As well as the protections for workers, giving greater opportunity is very much the hallmark of this report.

Photo of Siobhain McDonagh Siobhain McDonagh Labour, Mitcham and Morden

I welcome this long overdue statement and, in particular, the ending of exploitative pay between assignment contracts. I congratulate, in a heartfelt way, Sally Bridge and all at the Communications Workers Union who have campaigned for so long for this. I also thank the Under-Secretary of State for Business, Energy and Industrial Strategy, Kelly Tolhurst, and indeed her predecessor, for meeting me about this matter.

But is this not a work in progress? Is there not so much further to go, given that important British employers now use the living wage to reduce people’s terms and conditions? These loopholes need to be ended, so that a fair day’s work gets a fair day’s pay.

Photo of Greg Clark Greg Clark The Secretary of State for Business, Energy and Industrial Strategy

I completely agree with what the hon. Lady said at the end about her aspiration, and I am grateful for her endorsement of the reform. Of course, our vision for our economy is that we should see continually rising standards and opportunities for workers; that has been in our tradition and it is strategically in our interest as well. If we want to compete with other nations, that should be based on the quality and excellence of our work, rather than on a competition based on low standards. Now and in the future, we will look to build on these standards, but I am grateful that she recognises that this is a very important step forward today.

Photo of Matt Warman Matt Warman Conservative, Boston and Skegness

The good work plan is, in many ways, the first Government document to really wrestle with the changes technology has brought about on workers. I welcome the fact that the Secretary of State has brought in meaningful changes, but he has not imposed things that would limit the future flexibility of both employers and employees, so this country can maximise the opportunities of that industrial revolution rather than have that done unto us by other countries.

Photo of Greg Clark Greg Clark The Secretary of State for Business, Energy and Industrial Strategy

My hon. Friend makes an excellent point. His expertise tells him that when technological changes come about, we want to be in a position to embrace them, rather than keep them at bay. This is the first report, the first investigation in the world, that looks at the changes that technologies are making to the labour market. By getting ahead of the game, it allows us to prepare for that, so that we can embrace those changes with confidence, knowing that they would lead to high standards, rather than, as I am afraid some Opposition Members have advocated, keep them at bay and restrict the deployment of technology. That is not in the interests of workers or consumers.

Photo of Chris Stephens Chris Stephens Shadow SNP Spokesperson (Fair Work and Employment)

I am not necessarily sure we should take historical lectures from a political party that introduced the Masters and Servant Act 1823, which determined which devices could be used to discipline workers. Does the Secretary of State not agree that the biggest single factor in reducing zero-hours contracts is trade union activity? If he does agree with that, should we not present legislation that says that zero-hours contracts should be allowed only where there is a collective agreement with a recognised trade union, as is sensibly written in the Workers (Definition and Rights) Bill?

Photo of Greg Clark Greg Clark The Secretary of State for Business, Energy and Industrial Strategy

I do not agree with that, but I think the ability for workers to be part of receiving information and of the consultation on the practice of their businesses is very important. Part of the reforms we are bringing in will lower the threshold for workers in companies to be included in requirements to be involved in the future direction of their company and to be given information. So there is an increase in participation, and I hope that the hon. Gentleman will at least welcome that.

Photo of Madeleine Moon Madeleine Moon Chair, Defence Sub-Committee, Chair, Defence Sub-Committee

A young, highly vulnerable member of my constituency who has a long history with mental health services did exactly what the Government ask—she went out and took a job as a cleaner. Unfortunately, at the place she was cleaning the workers had no rights to go to the toilet without losing pay, so they started using the waste paper bins as toilets. When emptying a bin, my constituent found herself covered in urine. When she complained to the management, she faced bullying from the workforce, who were going to lose pay because of the need to go to the toilet. Will the Minister agree to ensure that whatever legislation he brings forward will cover workers’ rights on pay and going to the toilet, so that they are not forced into the humiliating position of having to use waste bins rather than lose pay?

Photo of Greg Clark Greg Clark The Secretary of State for Business, Energy and Industrial Strategy

I am shocked at the example the hon. Lady gives; it is a disgraceful example of the kind of practices that have no place in any 21st-century country, let alone the UK. I can confirm to her that as part of the clarity we are bringing to the different categories of workers, employees and the self-employed, we will make it crystal clear that if someone is regarded as self-employed, they cannot be imposed on in terms of the detailed working hours, and if they are an employee, of course they are entitled to breaks, including comfort breaks. The ambiguity has in some unscrupulous examples been used to intimidate and bully in the way that she describes.

Photo of Wes Streeting Wes Streeting Labour, Ilford North

There are proposals to welcome in this statement, but it says an awful lot about this Government that they have to stretch back more than 100 years to find good examples of advancing Conservative employment laws. The Secretary of State could have talked about the doubling of the length of time that employees have to wait to enjoy full employment rights, which was introduced in 2012. He could have talked about the employment tribunal fees introduced in 2013 or about the draconian Trade Union Bill introduced in 2015. Under this Conservative Government, even the Prime Minister’s job security is not all that safe either.

Companies such as Uber are subject to licences awarded by public authorities, so may I ask the right hon. Gentleman to look carefully and seriously at whether licensing authorities such as the Mayor of London, Transport for London and others could take into account employment rights and practices before awarding licences, or indeed—I am thinking across Government here—awarding contracts?

Photo of Greg Clark Greg Clark The Secretary of State for Business, Energy and Industrial Strategy

I mentioned some recent examples of legislation, to which I might add the national living wage, which has made a huge difference and led to the fastest growth in the rate of pay for the lowest earners in 20 years. When it comes to the examples that the hon. Gentleman gave, my intention is clear: whoever someone works for in the gig economy, their rights should be clear and fair. Whether they are regulated by the Mayor of London or are not subject to regulation, those rights should be unambiguous, clear and enforced.

Photo of Rachael Maskell Rachael Maskell Shadow Minister (Transport)

If an individual’s employment status is established, that individual themselves has the key to unlock different sets of rights. Matthew Taylor recommended that employers should bear the burden of proof; why has the Secretary of State moved that burden on to employees or workers, who will have to establish their employment status?

Photo of Greg Clark Greg Clark The Secretary of State for Business, Energy and Industrial Strategy

As of today, the new legislation that we have introduced will give the right to a day-one written statement of the rights of workers. They will be told unambiguously, as of right, what they are entitled to as part of their employment. The separate issue, which the hon. Lady might be eliding with that one, is whether the different rights associated with different categories of employment or self-employment are clear enough. That will require some changes in the law and regulations, to which we have committed, but the combination of the entitlement to day-one clarity and some further changes to reduce some of the ambiguity between the categories will achieve what the hon. Lady intends.

Photo of Paul Sweeney Paul Sweeney Shadow Minister (Scotland)

Generally speaking, this plan is a step forward for workers’ rights in the UK but, as always, it is a war of attrition. I have particular concern about workers who are in distressed enterprises that face closure, many of whom have seen long-standing issues. For example, in my constituency we have heard in the past couple of days the announcement that a railway works that has been in existence since 1856 is threatened with closure, even though it has been through several owners since 2013 and in the process the workers have surrendered so much of their right to their pension entitlements. The works has effectively been asset-stripped by a company called Knorr-Bremse, which transferred it to a German company, and it then went under the term of a company called Gemini Rail Services.

Will the Secretary of State reflect on the situation facing the workers at that plant, look into the issues facing the heavy maintenance and overhaul of the railway industry in the UK, and undertake to meet me to discuss the particular difficulties faced by the heavy maintenance and overhaul industry in the UK railway sector? It is facing real crisis. We need to take action to protect those jobs and vital skills, particularly in Springburn in my constituency.

Photo of Greg Clark Greg Clark The Secretary of State for Business, Energy and Industrial Strategy

It would obviously not be appropriate for me to comment on that particular case at the Dispatch Box without making myself more familiar with it, but I am happy to meet the hon. Gentleman, or for one of my colleagues to do so. More generally, the treatment of workers and pensioners in respect of companies in trouble is subject to a separate set of reforms that the Government are introducing. I would be happy to take the hon. Gentleman through them when we meet.

Photo of Peter Kyle Peter Kyle Labour, Hove

I thank the Secretary of State for his statement, and I thank Matthew Taylor for the work that went into his report, because it was a really fantastic piece of work.

Throughout the course of our inquiries, the Business, Energy and Industrial Strategy Committee heard some really horrific studies of what is happening in the modern workplace. Many of those practices will be outlawed by the proposals in the White Paper and what has been announced today, if it is all implemented in the right way, and I congratulate the Secretary of State on that. He said in his statement that the Government will

“make it easier for employees to have their voice heard in the workplace.”

That is a far cry from having workers on boards, as the Prime Minister announced some years back. Why is there not a more ambitious and clearer plan to include workers’ voices that would give them the voice that the Prime Minister herself said they would get a few years ago?

Photo of Greg Clark Greg Clark The Secretary of State for Business, Energy and Industrial Strategy

The hon. Gentleman is absolutely right to commend Matthew Taylor on the quality of his work and the recommendations. On workforce participation, he will know from his work on the Select Committee that we have introduced reforms that give workers a voice in the boardroom, whether through a dedicated elected director, through a non-executive director who is appointed with particular responsibility to provide an outlet for the workforce, or through the establishment of a council that can take workforce opinions. The further expansion of consultation included in the plan is another reinforcement of the fact that the more workers are involved in the affairs of their employers, the better it is for productivity.

Photo of Jo Stevens Jo Stevens Labour, Cardiff Central

In answer to an earlier question, the Secretary of State stressed the importance of access to justice, so will he guarantee today that he will not reintroduce employment tribunal fees?

Photo of Greg Clark Greg Clark The Secretary of State for Business, Energy and Industrial Strategy

I think the hon. Lady knows that that is a matter for the Ministry of Justice and the Courts and Tribunals Service, and that I cannot make that commitment from the Dispatch Box. What she can see through the reforms in the plan is that the opportunity to obtain justice and see that enforced, whether through the tribunal system or through employers directly, is substantially advantaged by the plan. I hope she would welcome that.

Photo of Diana R. Johnson Diana R. Johnson Labour, Kingston upon Hull North

As my hon. Friend Wes Streeting just reminded the Secretary of State, when his party came into power with the Liberal Democrats in 2010, they doubled the length of time that someone had to be in employment to be able to claim unfair dismissal protection. In the light of today’s statement, is the Secretary of State looking again at whether that is fair and whether the time should be reduced down to the one year that it was under the Labour Government?

Photo of Greg Clark Greg Clark The Secretary of State for Business, Energy and Industrial Strategy

Obviously, we keep the standards that we have under constant review. The appointing of a group, under Matthew Taylor’s chairmanship, to consider all aspects of our labour markets and regulation was an open and transparent way to proceed. We are acting on almost every one of his recommendations. They are substantial reforms. I stand by them and I am proud of them.

Photo of Kevan Jones Kevan Jones Labour, North Durham

It is important to have employment rights, but I would argue that an individual’s ability actually to enact those rights is equally important. The Secretary of State said in his statement that he would

“give all workers a right to request a more predictable contract, and address the obstacles employees can face in building up continuous service.”

My hon. Friend Diana Johnson just mentioned the increase to two years of the length of time required to get full employment rights. How would someone get their rights enacted if they did not have the two years of service? It is clear that in the real world people will just be sacked if they ask for their rights and have less than two years of employment.

Photo of Greg Clark Greg Clark The Secretary of State for Business, Energy and Industrial Strategy

Part of the point of making it a statutory requirement that employers should entertain a request for a more permanent contract is to prevent precisely that kind of abuse. That would be unlawful under the proposals.

Photo of Alison Thewliss Alison Thewliss Shadow SNP Spokesperson (Treasury), Shadow SNP Spokesperson (Housing, Communities and Local Government)

It is hugely disappointing that the Secretary of State has chosen to maintain state-sponsored age discrimination against workers under the age of 25, who are not entitled even to his pretendy living wage. Is he aware that the age pay gap between a 16 or 17-year-old and a 25-year-old, starting on the same day in the same job, has increased over the past three Budgets? Has he read the report by the Young Women’s Trust, “Paid Less Worth Less?”?

Photo of Greg Clark Greg Clark The Secretary of State for Business, Energy and Industrial Strategy

The Low Pay Commission has been established to advise, on the basis of rigorous research, what the rates of pay should be for different groups. I am surprised that the hon. Lady does not have the respect for the commission that I have. As we expand the opportunities for young people, especially through apprenticeships, it is important that posts are available for them. It is the commission’s task to advise on what is the best balance between pay and opportunities.

Photo of Melanie Onn Melanie Onn Shadow Minister (Housing, Communities and Local Government) (Housing)

The Secretary of State says that he has gone further than many expected, but he has not gone far enough for the Government’s own Low Pay Commission, which has written to him with a series of recommendations, including that people have the right to regular contracts if they are working regular hours; minimum notice periods for shifts; and compensation for shift cancellations. Why will the Government not commit to those recommendations, instead of their watered-down right to request?

Photo of Greg Clark Greg Clark The Secretary of State for Business, Energy and Industrial Strategy

It is not watered-down. The hon. Lady should see that the changes we are making, including on the ability to request a change from a flexible contract to one that has a fixed number of hours or days, are important reforms. They build on the rights to request, for example, different parental leave, which have proved successful in the past. The hon. Lady should not dismiss reforms that have proved valuable in other contexts.

Photo of Hugh Gaffney Hugh Gaffney Labour, Coatbridge, Chryston and Bellshill

I welcome this report as a starter. I am a proud Member of this Parliament who pays their intern staff a real living wage—£10 an hour—in a modern MP’s office. The Sutton Trust has found that 70% of all internships taken annually in the UK are unpaid. When will this Government take action to end the scandal and exploitation of unpaid internships? May I also ask that we pay modern wages in this Parliament and in this House for all staff who work here so that we practise what we preach?

Photo of Greg Clark Greg Clark The Secretary of State for Business, Energy and Industrial Strategy

I am grateful to the hon. Gentleman. He will be aware that we are increasing the resources available for the enforcement of the national living wage, and that applies to people who are employed. They may have the description of interns, but if they are performing paid work, they are entitled to the national living wage.