Zero-hours Contracts

Ian Lavery Excerpts

Wednesday 19th March 2014 Westminster Hall

[Alison McGovern (Wirral South) (Lab)]

It is a pleasure to open this debate under your chairmanship, Mr Dobbin. My contribution will not be terribly lengthy, which will enable other hon. Members to intervene or contribute, and to hear the Minister. I would like to start by referring to an e-mail that was sent to me recently. Knowing that I had secured this debate, quite a number of people got in touch with and wrote to me, as they feel so strongly about zero-hours contracts.

One gentleman who got in touch explained his life, saying that he lives to work and enjoys work, and wants to feel good about himself and perhaps own a house one day. He is signed up with an agency and has had various problems. Anyway, the agency felt that it could get him a job as a refuse collector. He has written me a long e-mail, explaining how he has turned up for work only to be turned away. He has had the odd day here and there, and he feels that the situation is like something from many years ago, where someone turns up not knowing whether he will be given work. He said that, when it started, he was “a little annoyed”, but “confused more than anything”. He said there were

“about 50 lads in that day and only 40 had work.”

He continued:

“It just carries on like this. I have been here two months now, and only ever had one full week; to cover a holiday, it looks like. And you daren’t take a sick day; not like I would anyway if it could be helped…you would just lose your place and start at the bottom of the pile.”

Reading that, as I did last night, brought it all back to me as to why my hon. Friend the Member for Liverpool, Wavertree (Luciana Berger), my right hon. Friend the Member for Knowsley (Mr Howarth) and I started a campaign and a discussion on zero-hours contracts last summer. I will go on to talk about the numbers of people whom we do not know are on zero-hours contracts.

The issue is about people who are facing a difficulty in the workplace. It is about how that makes them feel. The indignity of feeling useless through unemployment is very bad, and we must never let up on our passion to get people into work and see the difference. However, it is no better to feel the indignity of turning up for work and being turned away. Zero-hours contracts can be used to make people feel as if their efforts are for no good at all and that they are not wanted. The issue is not just a fact of economics, but a moral question about how people are made to feel by certain features of our labour market. That is why we need real action. I want to say a couple of things about understanding the phenomenon of zero-hours contracts; about what the Government are or are not doing, and what they might be doing; and about such contracts as a symptom of other developments in the labour market.

Regarding counting, the Office for National Statistics said that the most recent labour force survey suggests that there are close to 600,000 people—I think the exact figure is 582,000—on zero-hours contracts in the United Kingdom. That is up from its previous estimate earlier this year of around 250,000. We knew that there was a problem with the survey’s counting of zero-hours contracts, because in a parliamentary response to me, the Minister of State, Department of Health, who has responsibility for care, explained that a national survey of care workers estimated that more than 300,000 people working in social care were on zero-hours contracts. There cannot be 300,000 people on zero-hours contracts in the care sector when there are only 250,000 nationally across all sectors. Therefore we knew that there was a problem, and now the ONS has said that there is.

[Ian Lavery (Wansbeck) (Lab)]

I congratulate my hon. Friend on bringing this important issue to Westminster Hall. Does she agree that the recent figure of 500,000 zero-hours contracts is quite conservative? Other analysis suggests that there are more than 1 million people on such contracts. For those 1 million people, there is no production or wages, and they have no economic input whatever. If we have 1 million-plus people on zero-hours contracts, is that not a way of fiddling the employment or unemployment statistics that we are currently being fed by the Government?

[Alison McGovern]

My hon. Friend has pre-empted exactly what I am going to say. It is interesting that a Department for Business, Innovation and Skills Minister will respond to the debate, but we could do with having the Health Minister here, given how rampant zero-hours contracts are in the care sector. We could also do with the Minister of State, Department for Work and Pensions, the right hon. Member for Wirral West (Esther McVey), who has responsibility for employment, because I want to know exactly how many people we have forced to take jobs with zero-hours contracts to get them off the claimant count.

--- Later in debate ---

[The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jenny Willott)]

I thank the hon. Member for Wirral South (Alison McGovern) for securing this debate. It is a very important issue, which has been widely discussed in the media, online and in both Houses of Parliament. She raised some important points.

The term “zero-hours contract” encompasses many different forms of employment relationship, in which the employer does not guarantee any work and the individual does not have to accept it when offered. Such contracts can be direct contracts of employment or can cover people working for agencies and so on, so they include a wide variety of different models of employment. The Government, and indeed most people now, believe that zero-hours contracts have a place in today’s labour market, but we need to make sure that people get a fair deal when they are employed on such a contract. The Government have always been clear that we will crack down on any exploitation of individuals in the workplace and the zero-hours contract consultation that has just closed is an important part of the process.

As the hon. Lady highlighted, there has been some inconsistency in the statistics on zero-hours contracts. The picture has been very mixed. That is primarily because there is no legal definition of a zero-hours contract, so it has been difficult to gather good statistics. The labour force survey, as a survey of individuals, provides an estimate of the number of people who identify as being on zero-hours contracts. The greater media coverage in 2013 is likely to have increased awareness of zero-hours contracts. The Office for National Statistics believes that that has led to the estimate rising from 250,000 people in the final quarter of 2012 to more than 500,000 people in the final quarter of 2013; in other words, it more than doubled. We do need to gather information and analyse it sensibly if we are to know exactly what is going on and to achieve the right balance between the opportunities and the risks that zero-hours contracts provide. The hon. Member for Wirral South asked what is being done on that. The Office for National Statistics has been looking at the issue and will release the results of its new survey in April. That will, I hope, give us more clarity about the current figures and the number of people working in this way.

Let me put the issue in a little bit of context. Zero-hours contracts can give growing companies the opportunity to grow in a relatively safe way and can be used to increase flexibility in the range of services that businesses are able to give their customers or clients—for example, by employing people in specialist roles and in different geographical locations that a permanent staffing model could not provide for.

The contracts are sometimes portrayed as simply a way for businesses to try to reduce labour costs, to the detriment of the people who work for them, but we have also heard in evidence that we have received that the contracts sometimes offer positive work opportunities to people who would find it difficult to take regular work at fixed times. For example, one quarter of all zero-hours contracts are taken up by students, who cannot necessarily commit to a fixed working pattern, as their timetables change. The contracts can allow them, for example, to be more flexible around exams and so on. Zero-hours contracts offer them an opportunity to gain useful work experience and to progress on to other forms of employment when they wish to do so. That is also true of many other people with responsibilities outside work—in particular, caring responsibilities. The additional flexibility that zero-hours contracts can provide can be greatly valued.

Having said that, we must be clear that although zero-hours contracts suit some people, they do not suit everyone and there are people on zero-hours contracts who would prefer to be in full-time, permanent work. I am sure that, as constituency MPs, we have all seen people in that situation.

[Ian Lavery]

Does the Minister agree with the comments from Lord Oakeshott, the Liberal Democrat peer, who said:

“A zero-hours Britain is a zero-rights Britain in the workplace—Beecroft by the back door. Being at the boss’s beck and call is no way to build a skilled, committed, loyal labour force”?

[Jenny Willott]

As I said, zero-hours contracts can have a place in the labour market. They can suit some people—students, people with caring responsibilities and others—but clearly they are not appropriate for everyone. Anecdotal evidence, including that highlighted by the hon. Member for Wirral South and by the hon. Member for Hayes and Harlington (John McDonnell), suggests that some individuals are being pressured into working when it does not suit them and have the implied threat hanging over them of being denied future work, which removes the flexibility for those individuals.