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A large number of Labour Members support the Bill, and more than 150 have signed an early-day motion on the subject. As I understand it—perhaps I will be corrected if I am wrong—the hon. Member for Ellesmere Port and Neston believes that backing the Bill would enable the Government to fulfil their manifesto commitment to enact domestic legislation to ensure the equal treatment of temporary and agency workers. I am delighted to see, first, that so many Labour MPs have come along to stick the boot into their Government, and, secondly, that so many are here to fulfil a manifesto commitment. I very much hope to
see the Labour Benches full in a few weeks’ time when we debate a referendum on the European treaty. If fulfilling one’s manifesto commitments is so important, let us hope that Labour Members demonstrate a great deal of consistency in that.
The Government say that they refuse to back the Bill but that they will not oppose it on Second Reading. Their opposition to it is at best lukewarm. They say that they do not want to introduce any measure that could cost British businesses jobs. It strikes me from that that they concede that the Bill, if enacted in its current form, would cost British businesses jobs. I do not understand how on earth any Labour Member could want to sign up to and support a Bill when their own Government have made it abundantly clear that they believe that it would lead to job losses in this country. As we heard, the CBI estimates that the Bill as drafted could lead to 250,000 job losses. Its people are at the chalkface and they know what is going on in their businesses. I have always believed that the people who know best about any particular subject are those who are involved in it every day of their lives, because they see it as it is. It is not us pontificating from a comfy chair about what businesses should or should not be doing to look after their workers that matters; it is the businesses themselves that know what pressures they face, and they say that the Bill could lead to 250,000 job losses. The Minister would not say how many job losses he thought that we would see as a result of the Bill, but it is clear that the Government accept that there would be job losses.
Mr. Chope: The debate has often taken place in the context of the Bill being a burden only on business, but it could also place a large burden on the taxpayer because almost 40 per cent. of the 1.4 million temporary workers work in public administration and the public sector.
Philip Davies: My hon. Friend is right. Many Departments employ temporary and agency workers. It would be interesting to know what policy the Government employ on the treatment of their temporary workers, and whether they enjoy the same pay and conditions as permanent staff. The Government and Labour Members want to inflict such measures on businesses, and it would be nice to know that they were setting an example. I am certainly interested to know how the public sector treats its temporary workers. It does not need to wait for the law to change to implement best practice as it sees it. If the measure is so important, the public sector can implement it in its workplace. No one needs to wait for particular legislation to be introduced before doing that. I am happy to give way to the Minister if he wants to indicate the Government’s policy on their treatment of temporary and agency workers whom they employ. He does not seem to want to get into that, from which we will have to draw our own conclusions.
An impasse seems to have been reached at a European level on the text for a temporary and agency worker directive, and that appears to have prompted the calls for a national Bill. As my right hon. Friend the Member for East Yorkshire (Mr. Knight) said, the debate has been going on in the European Union for many years. My understanding is that the Government have always played their part in trying to kill off the
proposal at European level, which makes it all the more surprising that they do not have the courage of their convictions to vote against the Bill on Second Reading. They have been active behind the scenes in Europe in opposing the Bill, but it appears that they will be reticent in a public vote of the House of Commons, which would enable people to see where the Government stand on it.
A number of organisations fundamentally oppose the Bill, and I shall go through each in turn to see what they think of it. The British Retail Consortium, which I know well from my time working for Asda, has fundamental objections to the Bill. The first, which was also made clear by my hon. Friends the Members for Wealden (Charles Hendry) and for Ribble Valley, is that agency workers are already covered by all key employment rights. Health and safety was also mentioned, and they are protected by health and safety legislation as well. They are also protected by, anti-discrimination legislation, just like any other worker, so on many levels, the Bill is not required.
The flexible labour market, which the Bill seeks to undermine, benefits not only businesses but the people who work for them. Of course, it allows companies to meet peaks in demand, but it also allows workers to manage their work alongside other commitments. Temporary working means that people can work when they want to work, and not necessarily always at the times that their employer wants them to work, so they can conduct other activities. The British Retail Consortium believes that temporary working offers a valuable route into the workplace. Last week, I spent four days working in St. George’s Crypt, which is a homelessness project in Leeds. It does a fantastic job in tackling homelessness in Leeds and helping people with addictions. People who work there regularly told me—and I saw this for myself—that we have to instil a work ethic in people in that position.
There are many families in which no one has worked for generations. They do not have any experience of work, so they do not know what it is like to get up in the morning and go to work. Temporary and flexible working gives those people the opportunity to gain a work ethic. They may work only a few hours a week to start with, or a few hours a month, but at least that gets them into a routine. If we seriously wish to help vulnerable people—homeless people and people with addictions—to have a normal life, which, to my mind, means going out to work every day, temporary working is a valuable way of giving them a work ethic. If we imposed extra burdens on businesses to employ temporary workers, it would, at a stroke, take away the opportunity from many of those people to get a foot on the work ladder.
Equal pay between agency temps and permanent employees cannot always be justified, as we must take into account differences in loyalty and experience. Many good employers make a point of rewarding the loyalty of employees who have worked for a company for a long time by giving them bonus payments. Are we really saying that, under the Bill, someone who wishes to work for only a few weeks for their own benefit and convenience should, at a stroke, be paid the same as someone who has been a loyal and faithful servant to a
company for many years? If that is the route we are going down, it will be bad for employees and undermine employers’ attempts to reward loyal employees.
Such an approach would also lead to prohibitive costs, preventing companies from using agency workers at all. The hon. Member for Ellesmere Port and Neston said that his Bill was not designed to end the practice of agency working, but if we made it expensive to employ temporary workers, that would be the practical outcome, as the Bill would stop people using temporary workers. We have got ourselves into that situation, because time after time, the Government have made it more expensive to employ people. One need only speak to businesses in one’s constituency to discover that it is a nightmare to employ people. They say that it is time-consuming, bureaucratic and expensive to take people on as permanent staff. If staff do not perform properly, the hurdles employers have to overcome get rid of them are a nightmare. Many small businesses cannot cope with that. My hon. Friend the Member for Ribble Valley made a point about the different needs of big businesses and small businesses.
Mr. Greg Knight: Is my hon. Friend certain that his example of bonus payments would be covered by the Bill? One could argue that giving a long-serving, loyal employee a bonus payment would be justified “on objective grounds” under clause 1(2).
Philip Davies: My right hon. Friend raises an interesting point about clause 1(2). He may well be right that bonus and loyalty payments may be exempted on the basis of objective grounds, but the Bill does not define objective grounds. The meaning of that phrase may have to be tested in a court of law. It would be incredibly damaging, expensive and time-consuming if every time an employer wished to do something to support a loyal and long-serving member of staff, it faced court action. It would be completely debilitating for businesses to be left in limbo, not knowing what they could and could not do as a result of the Bill. Therefore, I say again that even those who might agree with the Bill’s thrust could not possibly support it because of the uncertainty that it would create.
Mr. Evans: Is my hon. Friend aware that in 2006 the Department for Work and Pensions had 120 agency staff, between 2005 and 2006 the Department of Health spent more than £12 million on agency staff, and in 2006, to meet the single farm payment scheme, 53 per cent. of the staff working on that matter in the Department for Environment, Food and Rural Affairs were agency workers? The Government therefore endorse the efficacy of employing agency staff, but the Bill could impose an extra burden and cost on them.
Philip Davies: My hon. Friend is entirely right. The poor, hard-pressed taxpayer has already paid enough without being expected to cough up even more to fulfil the obligations that the Bill may inflict. Given that so many temporary workers are employed by the Government, they could implement the measures contained in the Bill for their workers anyway. They do not need any law to be passed for them to implement these measures for their own staff, which might well serve as a shining example to other employers.
The British Retail Consortium makes it abundantly clear that temporary staff are protected by the national minimum wage, health and safety, discrimination and working time legislation. It feels that there is a perception, particularly among Labour Members, that temporary workers are subject to unsafe conditions, suffer discrimination, are paid badly and work long hours. I have no idea on what basis they make that assumption, but it is clearly one that they make. Agency workers receive the same protection in all those areas, including working hours, pay, discrimination and unsafe conditions, as any other worker. The perception of temporary workers that some Members are seeking to create is simply untrue.
Another point that has already been made and which bears repeating is that agency work is often more expensive than direct employment as employers pay the agency a fee that covers the wages and the agency’s costs. Therefore, businesses are not using agency staff to save money, but because it suits their needs to do so. We heard a lot about unscrupulous employers, and there are doubtless employers who do not comply with the law, but surely the answer cannot be to pass even more laws for them to ignore. There is always the desire to be seen to be doing something. Whenever the Government are faced with a problem, there are two elements to their solution. The first is that they must be seen to be doing something, and the second is that whatever they do must not offend anybody, so we end up with more and more well-meaning legislation, none of which is ever properly enforced. Surely the Government should be concentrating on enforcing existing legislation, before they think of embarking on new legislation.
We come back to the driver for the Government in even considering allowing the Bill to go into Committee and seeing it come into effect in one form or another. As the right hon. Member for Makerfield (Mr. McCartney) said, this is about implementing not necessarily a manifesto obligation, but the Warwick agreement pledges. The Labour party has been reticent about expanding on what that agreement means, but let us be clear what it means. Before the last general election, the trade unions agreed to bail out the financially embarrassed Labour party to the tune of millions and millions of pounds, to help it to fight the election, on the condition that, if it was elected back into government, it would implement an awful lot of legislation that would do huge damage to businesses—on the condition that it would implement all the favourite hobby-horses of the trade union movement. The Bill is about honouring the Warwick agreement. To my mind, and I am sure to that of most of the public, it is a rather grubby agreement, even if we look at it in the best of ways.
That is what the Government are indulging in. They are not doing what they think is in the best interests of the country or of protecting people’s jobs, or doing what is the fairest thing for all concerned. They are doing something that they were forced to do because they had no money before the last election. They have been forced into doing so to get themselves out of a financial hole. That cannot be any way to set legislation. This is being done under that grubby arrangement.
The British Retail Consortium has always made it clear that it wants to ensure that no worker is exploited. I am sure that the Minister will confirm that it has
worked with the Government on targeted enforcement of the national minimum wage, for example, as well as other issues involving vulnerable workers, so it is not as if employers such as those in the British Retail Consortium are trying to protect unscrupulous employers. It has been doing its best with the Government to try to clamp down on unscrupulous employers. It is trying to protect jobs and people’s access to the work market.
Mr. Chope: Does my hon. Friend accept that one of the advantages of temporary work is that, if someone finds themselves working for an unscrupulous employer, they can terminate that employment straight away and then be placed by their agency with another employer who is not so unscrupulous? There is much more flexibility than one would get if one were in permanent employment.
Philip Davies: My hon. Friend is right that one of the beauties of working for an agency is not only that it allows people to have a job that they can fit around their other commitments; it also means that, if they find somewhere to work that does not suit them and they have a clash with the people who employ them or something along those lines, they can easily move on to another employer, and someone else can take that job. People do not take these jobs for very long as a general rule. My hon. Friend is entirely right in what he said.
Around 2 to 3 per cent. of all workers are employed on an agency temporary contract. Earlier, we heard that only about 6 per cent. of people are on a temporary contract. Therefore, this is not a big part of the work force. It is a rather small part of our general work force. Nevertheless, it is incredibly important. These people work in a way that suits both the workers and the businesses.
Figures show that up to half of agency workers are not even seeking a permanent job. The industry surveys show that 52 per cent. of agency workers choose temping for positive reasons. They are making a conscious decision to work in that way. Sometimes, they do that because they get better pay working for an agency, or to gain valuable work experience. Twenty per cent. use temporary work as a route into a permanent job. Therefore, for lots of people, it is a foothold into a permanent job. If we were to take away that particular avenue, those people might not end up with a permanent job in the long run, or benefit from any of the rights that the hon. Member for Ellesmere Port and Neston wishes them to have.
Given the global competitive market in which we work, agency work is needed now more than ever. Given that we have had extensions to holiday entitlement, to maternity leave and to paternity leave, it is crucial that it is as easy as possible for businesses to take on temporary workers. If the Labour party wishes to impose all these benefits on people who are permanent workers, it has to acknowledge that someone has to fill in the gaps. That is where temporary workers are crucial. We must protect temporary agency workers, not clobber them.
Equal pay cannot always be justified, as I discussed with my right hon. Friend the Member for East Yorkshire. There is a wide variation in pay in the temporary agency market. Many agency temps get a higher rate of pay than they would get in permanent roles. My hon. Friend the Member for Ribble Valley gave the example of nurses. He is absolutely right, and the same point applies
to teachers. Supply teachers employed on a daily basis often get a higher rate of pay than they would if they worked permanently. The arrangement suits everybody. It suits the teachers concerned, because they might have other commitments. People get paid more because they are available at short notice, thereby enabling them to meet the possible needs of a school or, in the case of nursing temps, a hospital. We do not want such workers not to be available at short notice when people in our schools and hospitals need them.
People in accountancy also often work on a temporary basis when, for example, tax return deadlines are approaching, and one of the biggest sectors for temporary staff—in which people actually choose to be temporary staff—is IT, particularly skilled IT. People with expertise in a particular field are brought in for short periods and are very well remunerated. The idea that people on temporary working contracts are all exploited horribly by mean and nasty employers could not be further from the truth in many cases.
The British Retail Consortium has said that in order to be fair, if such legislation is enacted—it is an “if”, and the BRC is clearly against it—the qualifying period before equal treatment is to be considered is crucial. It seems that those who support the Bill do not want any qualifying period whatsoever. The Government have mentioned, I think, a period of six months, but the BRC believes that 12 months would be required. That would bring everybody in line with other, related employment rights such as protection against unfair dismissal; at the moment, somebody has to work for a year before they are entitled to such protection. If we are to go down this route, we must surely have a qualifying period, and it must be the same as for other kinds of employment.
Too short a qualifying period would price some temporary workers out of the market, particularly the most vulnerable ones who are trying to seek a way back into the employment market after unemployment or a way into it for the first time. It should be pointed out that EU states such as Germany adopt a similar approach, while others pay agency temps at a special trainee rate. Such options might be considered if the Government end up going down this line and giving in to their Back Benchers.
It is clear that the British Retail Consortium is wholly opposed to the Bill. I should point out to Labour Members that its member organisations employ an awful lot of people in this country, such as those working in supermarkets. It therefore speaks on behalf of a great many employers, who employ a large number of people.
It is important that we examine the labour market outlook surveys of employers. Employers were asked about the EU agency workers directive, which is the forerunner to this Bill. It is interesting to note the attitude of different employers when considering the issue. It has to be said that speculation is rife that some form of agreement on this directive will emerge during the French presidency, as my hon. Friend the Member for Wealden indicated. The wish is to impose burdens on our businesses to help us become less competitive in relation to them.
I want to spend a little time examining employers’ reactions to the Bill in surveys of the labour market outlook. Let me make it abundantly clear that UK employers’ reliance on agency workers is very high. In one survey, 76 per cent. of organisations that took part reported that they make some use of agency staff. Although few people might be employed on temporary contracts, a lot of businesses and organisations in this country depend on temporary workers. As I mentioned in an intervention, dependence is particularly high in manufacturing and, as my hon. Friend the Member for Christchurch (Mr. Chope) made clear, in public services.
The incidence is much lower in Wales at 67 per cent., Scotland at 62 per cent. and Northern Ireland at only 53 per cent. than in England, where more than 70 per cent., and in some parts of England more than 80 per cent., use temporary staff. In parts of the south-east in particular, it can be very difficult to recruit staff with the right skills. It is therefore crucial to have a ready-made pool of talent to use while trying to recruit permanent staff. Those employed on a temporary basis might move into a permanent job in the long run if they prove themselves.
Mr. Greg Knight: Will my hon. Friend also recognise the importance to the tourist industry of seasonal and agency workers?
Philip Davies: My right hon. Friend is right. His constituency includes Bridlington, which benefits hugely from tourism. He is a great champion for tourism and for his constituency. My hon. Friend the Member for Ribble Valley and I are conducting an inquiry into tourism on the Culture, Media and Sport Committee. We will look at the importance of temporary, agency and even migrant workers to that industry. Many businesses are finding it hard to compete with cut-price deals abroad, and we would not want to undermine further the tourism industry and small bed-and-breakfasts and hotels.
Mr. Knight: I am delighted to hear my hon. Friend’s comments. In passing, may I invite him and my hon. Friend the Member for Ribble Valley (Mr. Evans) to visit Bridlington, where I shall be happy to stand the drinks?
Philip Davies: My right hon. Friend makes a tempting offer, which is hard to turn down. I look forward to fixing that up with him shortly.
Mr. Evans: Does my hon. Friend recall that the Culture, Media and Sport Committee heard evidence from a hospitality industry representative that a large number of migrant workers were working in tourism and hospitality? That is a clear example of the need to ensure that people know the existing rules. The last thing that we want is a huge raft of new legislation that either will not be enforced or, if enforced too rigidly, will result in the disappearance of the jobs that migrant workers do to serve the public in areas such as my hon. Friend’s and mine.
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