Small Business, Enterprise and Employment Bill

Gordon Birtwistle Excerpts

Wednesday 19th November 2014 Commons Chamber

[Ian Murray]

That is the way the tax system works. People are allocated their national insurance and tax thresholds on the basis of when they work on a monthly basis. It can be aggregated over the year only if they are in permanent employment through pay-as-you-earn and the national insurance contributions that are made. In Committee, we had the strange scenario of Government Back Benchers saying that it does not matter what the tax take is because the aggregate would be the same if 100,000 people were working on zero-hours contracts than if the same number of hours were being worked by those in permanent employment. That is primary school economics, because the analysis does not work.

The Government have to reflect on the fact that while unemployment is falling, and has fallen by a substantial amount over the past 12 months, tax take, including income tax take, is exactly the same as it was the year before. That means that people are not being paid properly for the work that they are doing, that they are under-employed, or that they are in part-time jobs or on zero-hours contracts. So while they may not be an unemployment statistic, they are certainly not contributing to the economy.

[Gordon Birtwistle (Burnley) (LD)]

Does the shadow Minister accept that the tax take is possibly down by a lot because of the increased allowances that people now get before they start paying tax? Surely the fact that people are not paying as much and keeping more of their salary would affect tax take.

[Ian Murray]

The hon. Gentleman misses the point. If he was in his place earlier—I have no reason to doubt that he was not; I just did not notice when he came in—he would have heard me say that HMRC had predicted a significant increase in tax take having already factored in the increase to £10,000 in the taxable allowance. Even taking that into account, it was projecting a significant increase in tax take, yet it has been flat. HMRC had accounted for the change in the personal allowance threshold and for the fact that unemployment is falling. Taking all those things into consideration, it projected that it should be getting substantially higher tax revenues, but it is not. That tells us something about the kind of employment market that this Government want to create.

--- Later in debate ---

[Sheila Gilmore]

I absolutely agree that such methods are used to manage the process, and they might make it look as though the service can be procured more cheaply. I assure anyone who thinks that we in Scotland somehow do not have a problem with social care because some elements of it are supposedly free that that is not the case—we see all the same things happening.

The insecurity for the worker is huge. I see no reason why that should be the case when the work is there. It might take a bit more juggling, but firms have been trying for years to work out how best to spread the work force over the week.

In the care industry, there may well be a need for some form of emergency cover, but that is different from regular work. I have heard the argument that it is all very well to say that the people who need to be cared for are known about, but if somebody goes off sick or is on holiday, somebody else is needed so that urgent arrangements can be made. That may well be the case, as it is in teaching. There are long-standing arrangements involving supply teachers. We are back to the issue of choice. If people choose to work in that way and it is limited to situations where cover is needed, clearly it has a place. However, the firms that are using such arrangements are not using them just for emergency cover; they are using them for the predictable times, too.

If people end up doing longish periods of regular hours, they should be offered a proper permanent contract. By that stage, people are tried and tested, by definition. There is no reason for the employer to think that they are not capable of doing the job. In many fields of work, the practice would encourage retention, which is a problem in some of the fields that we are discussing. In a job as important as caring for other people, but not just in that job, it is crucial to deal with issues such as turnover—people not staying the course—because they affect the quality of care. This is not just an issue for the people who are employed in these fields; it is hugely important for those who receive the services—they want certainty about the person who is coming into their home.

[Gordon Birtwistle]

The hon. Lady is making a passionate speech. I agree that there are a lot of anomalies in the care industry that need to be resolved. However, such contracts have been available for years and nothing has been done about them. Why did the previous Government, who were in office for 13 years, not resolve these problems? I share her passion on this issue, and some of the things that she is saying are right, but it is a bit late to come to this debate and complain about what this Government are doing. Why did the Labour Government not sort it out years ago when they brought the zero-hours contracts in?

[Sheila Gilmore]

That allegation is made frequently. In the years up to 2007 when I was a local councillor, I did not see these things happening in the care industry. I really did not see huge numbers of zero-hours contracts being used in my area. I do not think that what the hon. Gentleman said was a factual statement.

--- Later in debate ---

[Toby Perkins]

I could not agree more. That is an example of how Government and industry can work together to build the high-skill, high-wage economy that we want, which is in stark contrast to the kind of economy that has developed under this Government. My parents worked at Warwick university, and if we compare the size of that university in the ’70s, when I first came to the area, with its size today, we see the real difference that investment can make.

[Gordon Birtwistle]

Surely the hon. Gentleman agrees that the advances in apprenticeships and high-tech skills that the coalition Government are delivering represent progress from the previous 15 or 20 years. The number of apprentices is approaching 2 million, and many companies in the aerospace, automotive and oil sectors have jumped on the fact that we need such skills to be delivered. Does the hon. Gentleman accept that progress has been made, or is he still thinking back to the days of Thatcher 30 years ago?

[Toby Perkins]

I accept that some progress has been made. There was a real rebirth in apprenticeships over the second half of the previous Government’s time in office and the current Government have said a lot about apprenticeships. However, I was disappointed that they did not support our amendments on apprenticeships, and people will feel short-changed because the Bill represented a real opportunity for the Government to take substantive steps on apprenticeships.

The hon. Gentleman is right to point out that many employers recognise the importance and value of apprenticeships. However, the number of under-19 apprenticeships is falling, and there has been a big increase in the rebadging of programmes that were previously known as back-to-work schemes as apprenticeships. I hope that the hon. Gentleman does not mind me saying that he was the oldest new Member of the 2010 generation. Older workers are incredibly important, as is demonstrated by the vigour with which he performs his tasks, and no one would describe him as an apprentice, but many older workers with a huge amount to offer our economy are being classified as though they are apprentices.