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amendment such as this. I find that lamentable. Young people in my constituency want the right to get a job, to get training and to get a full education that will take them into a decent arena of work. Perhaps the Minister would agree with me. I know plenty of young people who would like the Minister's job, and would probably do a far better job than he does. In fact, I guarantee that nearly every 20-year-old in my constituency could do a far better job in coming forward with employment rights to suit the needs and requirements of young people than the Minister.I am trying to use my English accent rather than my Glasgow accent so that the Minister will understand. The nitpicking of the Government is unbelievable. The Bill is about trade union reform and employment rights, and we are saying to young folk under 20 that they will not get their rights. The Government want employers not to bother telling their young employees what their deductions are. They do not want to tell the young people what they are earning. Those young people may be working for eight, 10 or 16 hours and they will not be told what they have earned.
We heard from the Government how many part-time workers are contributing to the country's economy. Are we going to treat them like a lump of stone to be shoved about, or are we going to treat them like human beings? I resent the Government treating our people like cannon fodder to be blown about and to be treated in such a fashion. The House is not talking about animals ; it is talking about people. Surely our people have the right to be treated in a dignified fashion. If they work for an hour, they are entitled to know what their wages are for that hour. They are entitled to get a pay slip.
Mr. Michael Forsyth : Normally, the hon. Gentleman and I get on extremely well in debates such as this. Could I draw to his attention the fact that we are discussing a Government amendment which, precisely as he asks, gives people the right to an itemised pay statement? The Opposition amendment seeks to amend our amendment to remove the limit that has been set to exclude small employers. That is the issue. I should not want the hon. Gentleman to be put in a position where Conservative Members might decide that his job could be better done by a 20-year-old as well.
Mr. Graham : I am convinced that literally hundreds of thousands of young people under the age of 20 could do a far superior job. I am here to give the House the benefit of my experience in a way that is fitting, given that my constituents sent me to this place. Could the Minister say why the matter has been discussed with employers only? Why has it not been discussed with young people? The Government never discuss anthing with the young people of this country, and they are treated like cannon fodder. In a war such as there was in the Gulf, it would not be long before the young people were in the front line and lying down and dying for this country. The Government would demand that they go to war.
Why do not the Government recognise the right of young people to an itemised wage bill? Why should not young people see a breakdown of their pay? I know of plenty of duff employers. I know of some savage employers who have gone bankrupt and out of business. Some are hiding in Cyprus or Spain and did not pay any tax for their employees. I know some kids who are waiting
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for their holiday pay. I know people who have waited years for their holiday pay because they did not get it from a bum, bad employer. I have a list of those companies as long as my arm. We can supply the Minister with the list if he wants us to.I am sick and tired of the House debating the subject of young people without any real consideration for their thoughts. We are turning out some of the biggest bunch of old fogeys in the western world. Unfortunately, when I sit in the House, I realise that I am an old fogey along with other hon. Members. I have two young sons who do not miss me. When I come home, they ask : "When is the House going to get its act together? Why are there thousands and thousands of their pals on the dole who cannot get work and who want to work? Why are not the young people getting a proper education or proper training?" I challenged the Minister on the question of training credits for young people. I was told that there were thousands of training credits in my area. Last night, I asked an executive of Scottish Enterprise how many folk were getting the credits. The answer was none. There were six getting credits in Dunbarton and others elsewhere in Scotland. The point is that I got bum information, which was neither suitable nor acceptable to my constituents. If the Minister can get that wrong, he can get the amendment wrong, too. The other day I got a telephone bill from British Telecom. Have hon. Members seen it? There is an itemised bill--no problem. The customer sees that he has spent 64p here and 54p there, or talked for a minute here and one and a half minutes there. The customer can find out whether his wife has overdone the phone bill--my wife usually says that I have overdone it. If a customer goes to the grocers, or shops at Asda or Tesco, there is an itemised bill. Has the Minister ever been shopping? I go with the wife. The bill shows a pint of milk and a loaf of bread. It tells the customer that he has bought those things and gives him the price of them. There is no problem at all. Yet the Government tell us that they are helping small business by not giving employees an itemised wages slip. Their heads are in a tin--they are off their nut. That is not the kind of progress that we need. Let us have genuine discussions about employment rights, and no nonsense wasting the time of the House.
6.30 pm
Mr. Michael Clapham (Barnsley, West and Penistone) : The statutory right to an intemised pay slip is fundamental. It is something that a worker should expect when he takes employment, no matter how many hours he works. The amendment will not extend that statutory right to tens of thousands of vulnerable people.
Many, if not all, of those workers will be women who have been forced into part-time employment because of economic circumstances. They have had to take a few hours work to earn a little more money to support the family, to buy a little more for the table and to buy clothes for the children, because, generally, one person in the partnership is out of work.
In these days of mass unemployment, when jobs are hard to come by, many part-time workers will be young people who have been unable to find full- time work and have had to take the first part-time job that comes along.
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The people who framed the amendment have little idea how many people might be affected. I said that tens of thousands of people will be affected. My hon. Friend the Member for Gateshead, East (Ms Quin) mentioned 780,000 people.This morning, in its submission to the Trade and Industry Select Committee, the Federation of Small Businesses said there are as many as 4 million self -employed small business men and 1 million small limited companies. It said that about 97 per cent. of small businesses employ fewer than 20 people, and 91 per cent. employ fewer than 10 people. A great many of those employees will be part-time. If we multiply that figure by 10, we will not be far short of the figure that my hon. Friend the Member for Gateshead, East used--that is, 780, 000.
Ms Quin : The 780,000 which my hon. Friend rightly quoted includes those in companies which employ fewer than 20 people who work more than eight hours but fewer than 16 hours. If we take into account those who work fewer than eight hours, we have a figure of 1.25 million. My hon. Friend is absolutely right ; a very large number of people are affected.
Mr. Clapham : I am grateful to my hon. Friend for pointing that out. We are talking of more than 1 million workers being affected. Under this Government, small businesses have been treated rather shabbily. In 1992, for example, the failure rate was almost 63,000. Many employees will have claims against the small businesses that have folded. Those employees will be able to prosecute their claims, because they will have evidence that they were employed, evidence of the hours they worked, and evidence of how much they earned. Without an itemised pay slip, it is unlikely that an employee will be able to prosecute a claim.
The amendment gives a nod and a wink to employers not to keep records. The Government should make it clear that records are necessary and should be kept by small businesses. The Lords amendment is a retrograde step ; I ask the House to vote against it and to support the amendment tabled by my hon. Friend the Member for Gateshead, East.
Ms Ann Coffey (Stockport) : No doubt the Minister will respond to our amendment by arguing that the small additional costs that might be incurred by itemising pay slips for employees in firms of fewer than 20 employees will be the straw that breaks the camel's back for some small firms, and will drive them into bankruptcy. The Minister might be interested to hear what representatives of industry, including small businesses and the Confederation of British Industry, have told the Trade and Industry Select Committee about ways of improving the competitiveness and productivity of British industry, so that the hon. Gentleman can be assured that the emphasis on cost is the least of industry's problems and that he can therefore support our amendment.
Among the problems that have been identified, particularly by small business, are the way that VAT is collected ; the attitude of the banks ; difficulties in obtaining loans ; the tax system, and particularly how it affects small businesses ; the lack of an overall structure ; infrastructure, including education ; and the difficulty with training and transport. This morning, the representatives who attended the Select Committee did not touch upon any costs
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relating to labour. That has not been identified to us as a major problem, although representatives went on at length about some of the factors that I have drawn to the Minister's attention.It is becoming clear that the countries that do better than us and have more productive industries than ours--for example, Japan and Germany--have a fundamentally different attitude to their employees. That is reflected in employment and trade union rights and the bargaining process in respect of wage settlements. The reason for those countries' higher productivity is that their work forces have been managed properly and involved in firms' decisions. They feel that they have a long-term future and are therefore willing to work harder for their companies. That has led to higher productivity and higher-quality goods.
That point is not difficult to understand. The Minister knows that anybody who is managed well will respond more favourably. I am sure that the Ministers whom the Prime Minister treats well behave much better than the Ministers whom he does not treat well. That is a fact of life ; it is plain common sense. Indeed, this morning, the CBI acknowledged that there has been a problem with the lack of management skills in industry, and that we must involve people more. Only by doing so can we use the talents and skills of our people and stop the desperate malaise in British industry. I draw that to the Minister's attention because the issue of itemised pay slips, although small in itself, is important in recognising employees' rights.
A Conservative Member talked about the odd job of a cleaning lady. It is not an odd job at all. Without women doing those jobs, the country would collapse. The problem is that no value is placed on that work. Itemised pay slips for those workers is a way of giving the message that they are important. It is up to the Government to show leadership. If the Government do not show leadership by saying that people and their jobs are important, we cannot expect the management of British industry to give that message. The Government have a chance to give that message by supporting our amendment. Cost did not prevent the Government from asking local authorities to send out itemised poll tax bills to all residents. Local authorities are a service industry. The Government asked local authorities to do that because they thought that it was right and proper that taxpayers should be aware of what they were being asked to pay.
Mr. Forsyth : The hon. Lady is making the same mistake as the hon. Member for Renfrew, West and Inverclyde (Mr. Graham). As a result of our amendment, large employers will, for the first time, be required to give itemised pay statements to employees who work a small number of hours. What is at issue is small businesses, so an analogy with itemised statements being required by large employers such as local authorities is not a fair one.
Ms Coffey : The Minister should recall that, at the beginning of my speech, I anticipated his argument about extending that right to firms with less than 20 employees. I anticipated that his argument would relate to cost. I have not misunderstood the amendment. My point is that, if something is right and the Government think that it is right, regardless of the cost--for example, to send itemised
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poll tax bills to all residents in a borough --the argument about cost is not one that the Minister can use at all because the issue is about rights. I see that the Minister now understands.Millions of pounds have been spent on sending out glossy brochures about the citizens charter and aspects of the health service. That has cost the service industries money, but the Government did that because they thought that it was right. My point is that, if it is right to send itemised pay slips to employees, it is right to send them to all employees.
The Government have a fundamental problem in distinguishing rights from costs. There is a great strength of feeling in the United Kingdom that the contribution that people make is not valued and their rights are balanced by the Government time and time again on factors relating to cost. The contribution that people make is important, and they should not be denied basic rights simply because of the cost.
6.45 pm
Mr. Miller : When my hon. Friend the Member for Gateshead, East (Ms Quin) was speaking, I noticed that the Government Whip had his handkerchief out. I thought that he was bursting into tears at the thought of having to provide an itemised pay statement for his valet, or whatever.
The crux of the argument is the question : why should any worker not be entitled to an itemised pay statement? The Government bluntly said that it would be too costly. Indeed, in Committee on 14 January, the Minister of State suffered from the needle being stuck more than once, because he repeated himself three times in columns 435-36 when referring to the additional cost imposed on employers.
The hon. and learned Member for Montgomery (Mr. Carlile) made an important point that followed the theme adopted by my hon. Friend the Member for Gateshead, East (Ms Quin) in terms of legal cases. My hon. Friend referred to the evidence submitted by the National Association of Citizens Advice Bureaux. The hon. and learned Member for Montgomery referred to a number of legal cases in his professional background that stemmed from companies with a small number of employees.
Last night, I advised the Minister of Agriculture, Fisheries and Food on an issue that affects her responsibility, which spills into this debate. It is ironic that she held the position of Secretary of State for Employment previously. It is a great pity that the Minister has chosen to ignore the evidence provided to the Committee by NACAB.
In a document sent to me today, NACAB says that evidence shows that itemised pay slips can save a lot of time later if disputes arise. That is exactly along the lines of the point made by the hon. and learned Member for Montgomery. For example, if an employee thinks that an employer has not paid the correct amount, made an illegal deduction from his pay or not been paying tax, it is the experience of the NACAB that some employers clearly flout their obligations under the law by not deducting pay-as-you-earn tax and national insurance contributions. Other employers may make the deductions but not pay the money to the Inland Revenue.
In both cases, that is revenue lost to the Exchequer and deficient national insurance contribution records affect
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future benefit entitlements. The National Audit Office reported that there was large-scale undernterested, given the perilous state of the nation's finances, I do not know what are. It is ironic that the Government should choose to ignore that, from the Treasury point of view and that of individual citizens who are affected by some of the examples to which my hon. Friend the Member for Gateshead, East referred.There are many other examples. A citizens advice bureau in South Wales reports a client who is employed by a nursing home. Her contract states that, if her pay exceeds the lower limit for national insurance contributions, she may receive store gift vouchers, which are exempt from national insurance. That is illegal. I am not entirely sure that having a pay statement would mitigate that, but it would go a long way to helping the employee to argue her legal rights if the matter went to court.
A citizens advice bureau in Devon reports a client who was paid £23 a night to work in a residential care home, despite being told that she would be paid £24 a night. When she complained, she was told that it was to keep her payments below the national insurance level. She insisted on full payment, and her next wage packet had £6.50 deducted for national insurance contributions. As her wage was below the level for national insurance contributions, the deductions were clearly wrong. If she had had documentary proof of that in the form of an itemised pay statement, she would have been in a strong position to challenge her employer in court.
I shall give the Government some advice about the way in which to encourage small businesses to think positively about this matter, and I shall do so in two ways. One way to encourage small businesses is by the use of modern technology--I say this as someone who has some knowledge of the subject.
It is interesting that the training and enterprise council in my area has sent out 10,000 attractively produced glossy leaflets showing its successes and activities. I do not criticise the TEC for many of the activities in which it has engaged, but, I criticise the use of money to produce the glossy literature. That money could have been used to train small employers in how better to utilise modern technology in their industries to ensure that such simple things can be provided as a matter of course.
Any company worth its salt keeps records. It is more efficient to keep records on a computer database than to do so manually. The Secretary of State will know Chester, Ellesmere Port and Warrington TEC--CEWTEC--and will doubtless praise many of its activities, but I am sure that he will agree that it could direct some resources towards helping to train small businesses in how to improve their record-keeping, administration and efficiency. Part of that process could be to encourage small businesses, many of which use computers, to utilise facilities that are available at minimal cost to provide statements to their employees.
Mr. Roy Beggs (Antrim, East) : From his experience, can the hon. Gentleman say how long it would take to prepare an itemised statement?
Mr. Miller : I shall stick to the point that I was making about computerised information, and will refer to manual records later.
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A good employer will collate the relevant computerised data, and it would take seconds to produce an itemised statement. If an employer has a well organised database, the stroke of a handful of keys will be all that is necessary to produce the statement. The process can be as quick as that in a well run business--and we are all in favour of encouraging such businesses.The same arguments can be applied to the question whether there should be an upper limit of 20. The hon. Member for Tiverton (Mrs. Browning) made an important contribution in Committee, and I congratulate her on being positive. I hope that she does not back off one jot from the sentence, which is on record, in which she said : "As the trend is towards part-time work, especially for women, it is important that everyone who has deductions from pay, and who in future may have to prove them either to the Inland Revenue or to the Benefits Agency, has written proof of those deductions."--[ Official Report, Standing Committee F, 14 January 1993 ; c. 434.] I absolutely agree--"everyone" must mean everyone in a company, irrespective of size. I hope that the hon. Member for Tiverton will support us in the Division Lobby. Why should there be an arbitrary limit on the number of employees in a company?
To return to the issue raised by the hon. Member for Antrim, East (Mr. Beggs), even if a very small company cannot justify the few hundred pounds' investment in a personal computer that could be used for other activities, the hon. and learned Member for Montgomery (Mr. Carlile) has supplied the ideal solution. A proforma duplicate pad could be used to provide the basic information.
An employer--no matter what size his business--must keep books in some form or another, so to produce information on a carbonised pad would not take any effort. It would require the employer to produce information in an honest, open and accountable way to all those involved--not just the employees, but all the public agencies. Even if the technology in a company extended only to a ballpoint pen, the employer would have the facilities at his disposal to provide the information required.
It is against that background that I believe that the Government have slipped up badly. They had an opportunity to make a major advance and have failed to take it. Therefore, I support my hon. Friend the Member for Gateshead, East in opposing the Lords amendment.
Mr. Michael Forsyth : We have had an interesting debate and learnt that the official Opposition policy is to start a paper chase the length and breadth of Britain. Every cleaning lady and part-time handyman will be given a piece of paper by their employers, whether they want it or not.
The Opposition have been thoroughly ungrateful today in the face of the Government's reasonable and responsible response to considered arguments.
Mr. Dennis Turner (Wolverhampton, South-East) : Not true.
Mr. Forsyth : The hon. Gentleman says from a sedentary position that that is not true. I listened to my hon. Friend the Member for Tiverton (Mrs. Browning)--I am delighted that she has agreed to become my Parliamentary Private Secretary today. It was in no small part due to the part that she played in Committee that my right hon. Friend and I felt that she would be a splendid
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addition to the Department. My hon. Friend the Member for Tiverton took the initiative in Committee. The hon. Member for Strathkelvin and Bearsden (Mr. Galbraith) supported the arguments advanced by my hon. Friend.The hon. Member for Ellesmere Port and Neston (Mr. Miller) is not distinguishing himself today--he is no gentleman. He quoted my hon. Friend the Member for Tiverton selectively. He did not quote column 436, where she said in response to my comments :
"I am encouraged by my hon. Friend's comments".
My comments in respect of the amendment were :
"Once again, we are discussing an additional cost being imposed on employers. I am not certain what the costs or the implications would be. We have had no opportunity to discuss the idea with any of the organisations which represent small businesses, which would be affected by the proposal. If my hon. Friend will withdraw the amendment, we can pursue her idea with outside groups which take an interest in these matters, and reach a conclusion."--[ Official Report, Standing Committee F, 14 January 1993 ; c. 436.]
That is precisely what we did--we consulted.
Earlier, I was criticised for not consulting. On that occasion we consulted and found that the Confederation of British Industry, the Forum of Private Business and other organisations wanted a cut-off for small firms. That was why we introduced the amendment to improve the law by giving new rights to employees who work a small number of hours. We limited the legislation in terms of the impact on business and introduced it in such a way that any change to the limit can be made by secondary legislation should any Government decide to do so in the future.
That policy marks an advance, and to be faced with Opposition criticism that we have not done enough in a sector where we have done a great deal as a result of discussions in Committee--and done so in double quick time--is harsh.
Mr. Frank Field : I am grateful to the Minister for giving way, and particularly for reminding us that the Government are a listening Government. We applaud the Minister for talking to the CBI and representatives of small businesses before reaching a decision. However, how many low-paid, part-time workers in his constituency did he speak to before coming up with his formula?
Mr. Forsyth : The conversations that I have had with low-paid workers in my constituency showed that receiving itemised pay statements was not at the top of their agenda, where they listed more basic items such as how to improve their employment prospects, deal with housing problems and other such issues. One of the ways of solving such problems is to increase this country's wealth-creating capacity. We shall not achieve that by tying up businesses in red tape, as the hon. Gentleman well knows.
Mr. David Hanson (Delyn) : Did the Minister consult his colleagues in the Department of Social Security and in the Benefits Agency? I am worried that many people who will not now have itemised pay slips will not qualify for means-tested benefits and other benefits administered by the Department. What did the DSS have to say about his proposals?
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7 pmMr. Forsyth : People in the tax system will get their P60s, which provide the information. There is nothing to prevent employers, the vast majority of whom follow best practices in this matter, from providing the information for people whose incomes fall below that. Just for once, the hon. Gentleman should bring himself to welcome a Government proposal and to acknowledge that the position of people employed by firms with more than 20 employees working a small number of hours has been greatly improved. As my hon. Friend the Member for Chester (Mr. Brandreth) said, there must be a balance between the benefits and the costs of the bureaucracy imposed on small businesses.
The hon. and learned Member for Montgomery (Mr. Carlile) said that not many members of the CBI have fewer than 20 employees. He should remember that these small firms are the future large employer members of the CBI, and if they have to spend every waking hour filling in forms and sending out bits of paper, they will never become the larger firms that will provide the jobs of the future.
Mr. Graham : I am not knocking the Government for talking to the CBI --I thought that the Government were in the closet with the CBI all the time, anyway--but I do take issue with the Government over how many employees they may have consulted. Have they spoken to trade unions or youth organisations about their decision? We seem to hear a lot from the Government about small employers, but not much about employees. How will this measure help them?
Mr. Forsyth : I listened carefully to the hon. Gentleman's speech. He said that computers are all around us and that high technology is a fact of life. I suggest that he go and talk to those who own the newsagents, corner shops and small firms in his constituency and ask them to show him their computers which will produce itemised pay statements. He will find that there, as elsewhere in the country, employers with small numbers of employees are struggling under numerous burdens, and they would not thank this House for adding to those burdens at a time when they are working hard to create wealth and to survive in difficult trading conditions.
Mr. Peter L. Pike (Burnley) rose --
Mr. Forsyth : I do not think that the hon. Gentleman has been listening long to our proceedings.
The hon. Member for Stockport (Ms Coffey), who is not now in her place, asked me to bear in mind the importance of competitiveness. She spoke about the evidence given by the CBI and others to the Trade and Industry Select Committee. She at least listens to the voice of business. She said that competitiveness was important and that we ought to learn from Japan, where there was a fundamentally different attitude to employees. I could not agree with her more. The difference between Japan and Europe is that Japanese non-wage labour costs are exactly half those of Europe. Opposition Members should stop coming up with bright ideas to add to the non-wage costs of our employers--especially small employers.
The hon. and learned Member for Montgomery wanted me to give an assurance that we would monitor the progress of the legislation. The Government monitor every
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piece of legislation. I only regret that the hon. and learned Gentleman did not give us credit for having made an advance--Mr. Alex Carlile : Does the Minister mean to say that he has evidence that in Japan pay slips are not given to employees who work part time in industry? I suggest that the vast majority of Japanese employers give computerised pay slips to part-time employees who work less than 16 hours.
Mr. Forsyth : I knew that the Liberals made up their policies as they go along ; I did not realise that they did the same when it comes to arguments of this kind. I repeat : the non-wage labour costs of Japan are half those of the European Community, thus giving it a competitive advantage. If the hon. and learned Gentleman and his colleagues had had their way, British non-wage costs would be a good deal higher, as they would have made us sign up to the social chapter and all the other nonsense which will make it much more difficult for Europe to compete with the Japanese and others.
Lords amendments Nos. 29 and 41 represent an advance. I ask the House to support them and to reject the Opposition amendment. Question put , That the amendment to the Lords amendment be made : --
The House divided : Ayes 255, Noes 281.
Division 299] [7.05 pm
AYES
Abbott, Ms Diane
Adams, Mrs Irene
Ainger, Nick
Ainsworth, Robert (Cov'try NE)
Allen, Graham
Alton, David
Anderson, Donald (Swansea E)
Anderson, Ms Janet (Ros'dale)
Armstrong, Hilary
Ashton, Joe
Austin-Walker, John
Barnes, Harry
Barron, Kevin
Battle, John
Bayley, Hugh
Beckett, Rt Hon Margaret
Beggs, Roy
Bell, Stuart
Bennett, Andrew F.
Benton, Joe
Bermingham, Gerald
Berry, Dr. Roger
Blair, Tony
Blunkett, David
Boateng, Paul
Boyce, Jimmy
Boyes, Roland
Bradley, Keith
Bray, Dr Jeremy
Brown, Gordon (Dunfermline E)
Bruce, Malcolm (Gordon)
Burden, Richard
Byers, Stephen
Caborn, Richard
Callaghan, Jim
Campbell, Mrs Anne (C'bridge)
Campbell, Menzies (Fife NE)
Campbell, Ronnie (Blyth V)
Campbell-Savours, D. N.
Canavan, Dennis
Cann, Jamie
Carlile, Alexander (Montgomry)
Chisholm, Malcolm
Clapham, Michael
Clark, Dr David (South Shields)
Clarke, Eric (Midlothian)
Clarke, Tom (Monklands W)
Clelland, David
Clwyd, Mrs Ann
Coffey, Ann
Connarty, Michael
Cook, Frank (Stockton N)
Cook, Robin (Livingston)
Corbett, Robin
Corbyn, Jeremy
Cousins, Jim
Cryer, Bob
Cunningham, Jim (Covy SE)
Cunningham, Rt Hon Dr John
Dafis, Cynog
Darling, Alistair
Davidson, Ian
Davies, Bryan (Oldham C'tral)
Davies, Ron (Caerphilly)
Denham, John
Dewar, Donald
Dixon, Don
Dobson, Frank
Donohoe, Brian H.
Dowd, Jim
Dunwoody, Mrs Gwyneth
Eagle, Ms Angela
Eastham, Ken
Enright, Derek
Etherington, Bill
Evans, John (St Helens N)
Fatchett, Derek
Faulds, Andrew
Field, Frank (Birkenhead)
Fisher, Mark
Flynn, Paul
Forsythe, Clifford (Antrim S)
Foster, Rt Hon Derek
Foster, Don (Bath)
Foulkes, George
Fraser, John
Fyfe, Maria
Galbraith, Sam
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