Economy and Jobs

Margaret Greenwood Excerpts

Monday 20th January 2020 Commons Chamber

[Margaret Greenwood (Wirral West) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Speaker. We have had a number of maiden speeches today, and I congratulate all Members who made theirs. My hon. Friend the Member for Cynon Valley (Beth Winter) paid tribute to her predecessor in the House, Ann Clwyd, and spoke about the scourge of high unemployment and low wages that characterises so many of her constituents’ experiences. The hon. Member for Arundel and South Downs (Andrew Griffith) spoke about the beauty of the area that he represents and its role as a dark sky reserve.

My hon. Friend the Member for Nottingham East (Nadia Whittome) made a very impressive speech in which she spoke of the urgency of addressing climate change and the reality of life for so many of her constituents when 42% of children live in poverty and firefighters are using food banks. There were also maiden speeches from the hon. Members for North West Durham (Mr Holden), for Loughborough (Jane Hunt), for Dover (Mrs Elphicke), for Kensington (Felicity Buchan), for Newcastle-under-Lyme (Aaron Bell), for Stoke-on-Trent Central (Jo Gideon) and for Gordon (Richard Thomson).

Despite the warm words of Ministers, the Queen’s Speech fails to put an end to a decade of austerity that the Government must take full responsibility for. There is no shortage of evidence to show just how badly the Government have failed. Child poverty is at record levels at over 4 million and is set to rise to over 5 million by 2022 as a direct result of Government policy. Thirty per cent. of children in the UK are growing up in poverty and, in parts of the east end of London, Birmingham and Manchester, that figure is over 50%. There is no moral case for the Government to continue—[Interruption.] I do not understand why Government Members are making such a noise at the news that in some parts of this country, 50% of children are living in poverty—they should be hanging their heads in shame. There is no moral case for the Government to continue with business as usual, and radical action is needed. Most urgent is the abolition of the two-child limit in universal credit and the provision of free school meals to all primary schoolchildren.

Only last week, a major new study highlighted that the wealthiest people in the UK can expect to live around nine years longer in good health than the poorest people in our society. That is a stark indication of the deep-rooted inequality in our country. The UN special rapporteur on human rights and extreme poverty said, in his report on the UK, that

“much of the glue that has held British society together since the Second World War has been deliberately removed and replaced with a harsh and uncaring ethos.”

That is a damning indictment of Conservative Governments’ shameful record.

Average wages still remain lower in real terms than they were in 2008. Meanwhile, the dividends paid to shareholders have increased at three times the rate of inflation. UK private sector corporations are stockpiling reserves, so total cash and bank deposits increased by 8.3% last year. That picture suggests uncertainty rather than confidence in the future.

The last decade has also seen a sharp rise in the number of people in low-paid, insecure work. While the Government propose to increase the national living wage, it will fall far short of a genuine living wage, as set by the Living Wage Foundation. The Government have even missed their target of £9 an hour by 2020, set by George Osborne back in 2015, let alone Labour’s goal of £10 an hour for all workers aged 16 and over.

There has been an increase in the number of workers who are not even being paid the current national minimum wage. In 2016, just over 22% of workers aged 25 years and over who should have been paid the minimum wage were underpaid. Now the figure stands at 26%, according to a new study by the Resolution Foundation, which estimates that around 350,000 of the 1.4 million people over 25 who were paid the national living wage in 2019 were paid less than they were legally entitled to. It is truly shocking that so many people are being exploited in this way and that so many employers think that it is okay to pay less than the legal rate. Despite that, since mid-2018 the Government have suspended the naming and shaming of employers found by HMRC to be underpaying. They claimed to have done so on the advice of the director of labour market enforcement, but that is not quite right: in fact, he had called for an evaluation and specific improvements, so why have the Government abandoned workers who are being badly exploited?

Low pay is not the only matter of matter of concern. The world of work has changed enormously in the last decade. Two thirds of the growth in employment since 2008 has been in areas such as self-employment, zero-hours contracts and agency work, while the total number of people in insecure work is estimated at around 3.7 million by the TUC, and that estimate includes 1.5 million self-employed people earning less than the national living wage. For those in insecure employment, it is extremely difficult to report abuse, not just in the case of underpayment of the minimum wage but when it comes to sexual harassment. Women are more likely to be in insecure work involving temporary, agency or zero-hours contracts than men, and nearly 900,000 people are now on zero-hours contracts, more than half of them women. In July, the EU introduced a directive on transparent and predictable working conditions, part of which was aimed at addressing the use of zero-hours contracts by employers. The Secretary of State for Business, Energy and Industrial Strategy told the House that the Government had gone further than the directive, but that is not entirely accurate. For example, they have not gone so far as to require employers to give employees a minimum period of notice of their shifts and compensation if they are then cancelled. Can the Minister confirm whether the Government intend to do so, and if so, when?

Alleged bogus self-employment has been the subject of high-profile legal challenge in the past few years. As with underpayments of the minimum wage, the concern has to be whether employers are trying to escape their basic responsibilities to their workers. Are they requiring self-employed status to avoid paying for uniforms, equipment and national insurance contributions and to avoid paying into pensions? The Taylor report and the BEIS and Work and Pensions Committees have called for reform of the law on employment status to place greater emphasis on whether there is an employer who exercises control and supervision over a person who is allegedly self-employed. The Opposition believe the Government should end bogus self-employment by creating a single status of worker for everyone apart from those genuinely self-employed in business on their own accounts. The employment Bill does not seem to address the issue of employment status at all, so can the Minister tell us why not?

The growth of low pay and insecurity in the workplace has been accompanied by severe cuts to social security. Universal credit was supposed to lift people out of poverty and smooth the transition into work. It is failing on both counts. The reality is that many people find it far more challenging to make a claim in the first place and then to have to wait five weeks to receive payments. The 1.6 million emergency food parcels distributed by the Trussell Trust last year represented a 20% increase on the year before. In this, as in so much else, the figures show clear regional inequality, with a 38% increase in the north-east of England. It should be a source of deep shame to the Government that food banks have become a hallmark of Conservative administration.

Access to and availability of childcare can make a real difference to people trying to get into work. The all-party group on childcare and early education has highlighted in a valuable report that Government funding for the 30 hours of free childcare is inadequate. It argued that as a result of a £662 million funding shortfall, there is a danger that access will become increasingly restricted in more deprived areas as providers close their doors or charge for extras such as meals or nappies. In the Queen’s Speech, the Government announced additional funding for wraparound childcare, but can the Minister tell us when they will fund their core commitment properly?

Many Members have spoken of their concerns about the replacement of the European social fund, but on this matter the Queen’s Speech was silent. That is a very serious omission, given that numerous organisations providing employment support for disabled people and deprived communities rely on the European social fund for support. The Government may have guaranteed funding in the current round, but the ESF funding for most organisations will end either this year or next, leaving a major question mark over their future. The Government promised a consultation as far back as July 2018 on the future of the shared prosperity fund, but since then they have dragged their heels. When will they give details of the design of the fund so that organisations can at least have certainty? Will the shared prosperity fund match and maintain the funding levels provided by the ESF during its next round of funding? Employment support organisations are at risk of closing before we get answers from the Government, and with those closures will come the loss of vital support and expertise. The confusion over the shared prosperity fund is not taking back control; it is delay and drift. Disabled people and the deprived communities who rely on ESF funding deserve better.

We are facing a crisis in productivity. Rather than our seeing the investment in skills and machinery that we need, much of the economy is based on low-paid, low-skilled employment. Overall growth in business investment in areas such as machinery, IT and intellectual property has been slowing since 2015, and has actually fallen in each of the last two years. A recent survey found that only 50% of UK employers expected to increase their spending on skills development in the next 12 months. The Government have failed to provide a lead. Rather than their investing in skills, public funding of adult skills training is set to be cut by half between 2009-10 and 2020-21. There is something seriously wrong when people from disadvantaged backgrounds, with the lowest qualifications, are the least likely to have access to skills training. That was highlighted by both the Office for National Statistics and the Social Mobility Commission last year.

The increase in low-paid, insecure work is damaging people’s lives. It leaves children going hungry, puts stress on families, and leaves many unable to meet basic household bills. Low-paid, insecure work is not good for people, and it is not good for the economy. The Conservatives have now had 10 years in which to take action to tackle the scourge of low pay and ensure that work is a route of poverty. They have had 10 years in which to ensure that when people are not able to work, they are supported by a social security system that has dignity and respect at its heart. Instead, we find that inequality is deeply entrenched. The most disadvantaged have paid the price of the financial crisis through cuts in social security, and the cuts in public services have weakened the very fabric of our society.

It is time that the Government faced up to their responsibilities and took the action that is needed to tackle climate change, rebuild our public services, and invest in our people at every stage of life.