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My hon. Friend is right. I am sure that he will recall that, according to the hospitality industry representative who appeared at one of our evidence
sessions, the reason why so many migrant workers work in the tourism industry is that it is difficult to get people in this country to turn out to work. The work ethic of people in this country is poor compared with that of some of the migrants that the industry employs. In this country, 1.25 million 16 to 24-year-olds are not in employment, education or trainingthey are doing nothing. If, by using temporary agencies, we can find a vehicle to get some of those people off their backsides and into some kind of work, it will do an awful lot of good, not just for them and their families but for the economy and the country. As a result, we would probably not need as many people coming into the country. We must be mad to let people come in and take jobs that people in this country are more than capable of doing. If the people here do not get any foothold in the employment market, that is only a dream. Temporary agencies give a lot of those people their first stepping stone into work. The proportion of employers that use agency workers [Interruption.]
Mr. Deputy Speaker: Order. Conversations are breaking out throughout the House. Hon. Members must listen to the hon. Member who is addressing us. [Interruption.] Order. If hon. Members are not intending to listen, I suggest that they leave the Chamber and find something to do for the time being. When an hon. Member is addressing the House, it is normal to listen to what they have to say.
Returning to the survey, the proportion of employers that use agency workers is interesting. Some 85 per cent. of manufacturing and production employers use agency workers at some point, as do 85 per cent. of our public services.
I mentioned briefly the importance of the manufacturing sector to our economy in an intervention on my hon. Friend the Member for Ribble Valley. Everybody in the House agrees that this countrys manufacturing base is in a rather precarious position. It has been going downhill for many years, and we should be doing things to try to protect it. As he said, we face more and more global competition from places such as China and India. We will never be able to compete with them on employment costs and practices, nor should we try to do so, but it must be going in completely the wrong direction to keep piling more and more regulation on our businesses.
If Labour Members are so concerned about the working practices of workers across the world, surely it is better to try to retain as many manufacturing jobs as we can in this country, with the high employment obligations that we have, rather than price people out of the market in this country so that they set up a manufacturing plant in Beijing, where health and safety protection is virtually non-existent, and the wages are, too. Surely Labour Members concede that it is better that jobs remain in this country, even with slightly less protection than they would want, than to have them farmed out to places such as China and India, where workers will get no protection whatever.
I want to make a point about call centres. It is great to have them in the United Kingdomwe have a lot of them, they provide jobs, and I suspect that
many of those are agency jobs. If, all of a sudden, we start pricing those jobs out of this country, it would be easy for companies to start using call centres in India or other parts of the world, and that has been done. We are talking not about protecting agency workers but about removing jobs from this country and exporting them to other countries where, as my hon. Friend has just said, health and safety standards, and pay, may be much lower.
Philip Davies: My hon. Friend is entirely right, and he is right to raise the subject of call centres. In my time at Asda, I spent a number of years supervising the call centre that it ran. Customers used to ring up with complaints about service or the products that they had bought. We used to employ quite a few temporary workers from agencies, and there is a quite a high turnover in call centres. I would like to think that we were a good employer, but by the nature of the people that call centres tend to employstudents or recent graduatesthere is bound to be a turnover of staff. As long as they move on to bigger and better things, that is good. If we played our part in giving them the skills that they needed to move on to a better job, that was to everybodys benefit.
The point about taking on temporary staff that is not understood in the Bill is that, when we needed someone to do a job at short notice, we as an employer were taking a gamble. When someone takes on a permanent member of staff, they advertise the job and say exactly what qualifications and skills are needed. People then go through an interview process. They are interviewed to see how they would fit into the culture of the organisation and whether they have the skills and experience that are being sought, or any other personal qualities that are wanted. Employers can do tests and all kinds of things to ensure that they get the right person. Once all that has been done, it seems perfectly reasonable that the person would be paid a particular rate to do that particular job. When employers use a temp agency to get staff, however, they do not have those luxuries. They are taking a gamble that the person who walks through the door
Philip Davies: I am grateful to you for that, Mr. Deputy Speaker. I am surprised that the hon. Member for Hendon (Mr. Dismore) would wish to cut me short, given the remarkable stamina that he displays when he speaks in these debates. I can assure him that there is plenty more that I wish to cover in my speech before I shall be ready for him to cut me short.
Employers who go to temp agencies for staff are taking a gamble that the person who walks in through the door will be capable of doing the job, and that they will fit in with the culture of the organisation. It is perfectly reasonable and rational that that person would initially not be paid at the same level as everyone else, because it is impossible to guarantee that they will be of the same calibre. An employer might well have asked the agency to send someone with particular qualities, but even so, they are still putting their trust in
someone else. It is perfectly reasonable, if they are taking a gamble on someone, to pay that person less than they would pay someone who has gone through a rigorous recruitment process for the same job. Those people would not have got the job on the same basis. One would probably have had several days of interviews to get the permanent job, while the other would simply have walked through the door because a temp agency had sent them. Why on earth would they both deserve the same level of pay from day one? I do not see the logic of that argument.
Mr. Chope: Does my hon. Friend regret the fact that there seems to be a mood of intolerance among the Labour Members who are listening to his important arguments? This issue could affect as many as 1.4 million of our fellow citizens.
Philip Davies: My hon. Friend makes a good point. I am disappointed that Labour Members wish to cut short the debate on a Bill that, if enacted, could result in the loss of 250,000 jobs in this country. One would have thought that they would want rather a lot of scrutiny of a piece of legislation that could cost 250,000 of our constituents their jobs.
Mr. Evans: Another beautiful thing about agency work is that it allows people to test different jobs. They might not always know what they want to do, and they can try several different ones through an agency. They might then find one that they would like to do on a permanent basis. They will have built up a rapport with the firm while working there as an agency worker, and the firm will know what they are like and what they are worth when they employ them on a permanent contractual basis afterwards.
Philip Davies: My hon. Friend is right. Accessing an employer through an agency is a good way of showing that employer how good we are in order to gain a permanent contract. Indeed, 87 per cent. of the organisations that responded to a recent Labour Market Outlook survey said that they had recruited permanent staff who had initially worked for them as agency workers in the year prior to the survey. The hon. Member for Ellesmere Port and Neston wants to give people certain rights, but many are gaining those rights anyway within a short space of time, once they have proved themselves in that way.
I am sure that we all know people who are good at certain things and less good at others. I certainly know people in schools who say that are not particularly good at sitting exams, and that they freeze on the day and do not do themselves justice. That is why we wentwrongly, in my opiniondown the route of assessing coursework instead of setting exams. That was the rationale for doing that. Similarly, there are probably lots of people who do not show themselves in their best light in interviews or selection tests. Getting some on-the-job training through a temp agency allows such people to prove how good they are, and that might well be the best way for them to get a permanent job with the enhanced rights that Labour Members want them to have. Labour Members have not understood the importance of temporary agency working as a way
of getting into a permanent job. By making it less attractive to take on temporary workers, the Bill could prevent many people from getting a job at all, because they would not have the opportunity to prove themselves in that way.
According to the survey, agency workers earn about two thirds what permanent employees earn, although, as I mentioned earlier, it would be wrong to conclude that all agency work is low paid and low status because some of the best-paid and highest-status jobs are temporary. However, it is also true that temporary employees generally have a more positive attitude to their jobs than permanent employees, possibly for the reason mentioned by my hon. Friend the Member for Ribble Valley. I meet lots of people who are about to leave school or university, and when I ask them what their ambition is and what they want to do when they leave school, lots of them sayit is quite a respectable answerI dont really know. Im not entirely sure what I want to do.
Temporary work gives people an opportunity to try out different forms of employment. They may work in a call centre for a while, find that it is not for them and go back to their agency and say, Its not really working out. Could you find me a job somewhere else?, or they may take to it like a duck to water and want to stay. The survey shows that temporary employees generally have a more positive attitude to their jobs, even though they have fewer employment rights than permanent employees. That did not come out in the remarks of the hon. Member for Ellesmere Port and Neston
In the survey, employers organisations contended that it is inappropriate to require that agency workers be given the same pay and conditions as permanent employees, especially very shortly after recruitment, because people who come to a job through a temporary agency usually do so because they do not have the same experience and competence in that job as permanent staff. The survey asked how long a period the Bill should require, if it came into force, before the terms and conditions applied. Its findings were interesting. Some 26 per cent. thought that they should apply after one year of service, and 27 per cent. thought that they should never do so. If we ever introduce this or a similar Bill, employers views on the timing of pay and contracts of employment conditions are clear: they should apply after a minimum of one years service.
Mr. Chope: In the comprehensive survey of employers, is any mention made of the significance of employing temporary and agency workers for delivering our Olympic bid in 2012? The bid cannot be delivered without a very large number of temporary and agency workers.
Philip Davies: My hon. Friend is right, but I do not happen to have the figures to hand. The Government tell us constantly that every part of the country and people in every constituency will benefit from the Olympics. I am not entirely sure how the people of Shipley will benefit; the Minister has not yet explained that to me.
We are always being told of the great benefits of the Olympics. One of those benefits is that people will get contracts to build all the sites required. As my hon. Friend says, that will no doubt involve workers on temporary contracts who may well be paid differently
from permanent employees in such businesses. In fact, because of the time scales involved and the Olympics importance to this country, those people may be paid more than permanent employees of the firms bidding for the work, because their expertise will be in such short supply. We should not think that agency and temporary workers are always paid less than permanent employees of the same firm. Often they are paid more.
Mr. Chope: Does my hon. Friend accept that a large pool of temporary and agency workers will enable the Olympic Delivery Authority not to be held to ransom by contractors who say that they have only a limited number of permanent employees?
Philip Davies: My hon. Friend is right. He will know as well as anybody that the cost to the taxpayer of the Olympic games has risen at an alarming rate, and we still have four years to go. The last thing that we need is a Bill such as this, which might well lead to taxpayers having to dig even deeper into their pockets to fund the Olympic project. He makes a very good point in raising the issue of the Olympics.
Mr. Evans: Scarce skills will be necessary to deliver a project as gigantic as the Olympic games and the only thing more embarrassing than the escalating cost of the games would be if we were unable to deliver on time. Agency workers will be invaluable to ensuring that the Olympic games take place in London in 2012.
Philip Davies: My hon. Friend is right. Without agency workers, the games could probably not be delivered on time. The Government tell us how important the Olympic games are to Britain, and I support the games coming to Britain, but it is essential that we make the use of temporary workers attractive.
The survey reveals a spread of opinion on the impact of the agency workers directive if it were implemented in the UK. Employers were asked about the overall impact of the directive, which, as we all know, is the forerunner of the Bill. Only 17 per cent. thought that the impact would be positive, whereas 37 per cent. said that they knew already that it would have a negative impact on their business. Of the employers who took a negative view, 61 per cent. expected upward pressure on pay and benefits packages. That might be what the hon. Member for Ellesmere Port and Neston aims to achieve through his Bill, but this countrys police officers, teachers and nurses are probably fed up to the back teeth of hearing the Government stress the importance of pay restraint to avoid rampant inflation, so it seems bizarre that when Government Members are telling police officers, teachers and nurses that they cannot have the pay rises to which they are entitled in one go because that would create inflation, and 61 per cent. of those who think the directive will cause problems say that one of those problems will be upward pressure on pay and benefits packages, they are so willing to support the Bill. Will the Minister calculate the likely impact on inflation if the Bill is enacted and peoples pay is increased by more than the businesses employing them can afford?
In that survey, 29 per cent. of respondents said that they expected it to be less likely that agency temps would be hired as permanent employees. The Bills promoter is trying to get agency workers the same employment rights as permanent employees. Now,
when such workers become permanent employees, they get those benefits, but 29 per cent. of employers are saying that the Bill would make it less likely that agency temps would ever become permanent employees. He would therefore deprive those workers of the benefits that he is trying to give them.
Almost half47 per cent.of the employers responding to the survey said that the directive would make hiring agency temps more bureaucratic. As we know, businesses already face far too much bureaucracy. For companies such as Asda, which I used to work for, bureaucracy, while annoying, is not disastrous, because they can afford to employ people to go through and ensure compliance with all the directives and bureaucracyit is meat and drink to them. Employing such people takes up only a small proportion of a big businesss costs. However, for the many small employers that are the engine room of our economyfor small shopkeepers and other small businesses in our constituenciesexpecting them to abide by more bureaucracy, legislation and rules is simply unrealistic. They spend long enough hours managing their own business and keeping it going. Many small business men work very long hours for little reward to keep people in employment, and many keep workers that they really cannot afford to keep because they are loyal to their employees. Imposing further costs and burdens on them would be a terrible crime and certainly lead to lots of small businesses closing in our constituencies.
Employers think that the agency workers directive will have an impact on their recruitment strategy. It is important that we look at the various sectors. Of employers in manufacturing and production, 47 per cent. say that the directive would have a negative impact on their recruitment strategythey would recruit fewer people as a result. We often talk about how we need to support manufacturing and how nice it would be to grow our manufacturing base. This Bill would do more than anything to undermine our manufacturing businesses and base. The survey shows that 34 per cent. of private sector service companies said that they would recruit fewer people; 42 per cent. of public service companies said the same; and the figure was 32 per cent. in the voluntary sector. Clearly, that would have a devastating effect on employment and recruitment.
Employers believe that the Bill would have a slightly different effect in different areas of the country. It is no surprise that the biggest impact would be in London and the south-east. In London, 44 per cent. of employers said that the Bill would have a negative impact on their recruitment strategy. In my area of Yorkshire and the Humber, 39 per cent. said that it would have a negative effect on recruitment strategy, and I certainly do not want to support a Bill when 39 per cent. of the organisations surveyed in my own area, which employ my constituents, say that they would employ fewer people as a result. Labour Members should think long and hard about the Bills impact on employment among their constituents in their constituencies. How would they explain that their constituents were out of work because of a piece of legislation that Labour MPs had themselves passed?
Is not that particularly important when we seem to be going into a downturn, possibly a recession? A report in todays Financial Times suggests
that UK growth will be well below 2 per cent. next year. It predicts that we will have increased inflation and less employment.
It is important to note that the survey of employers on their response to agency workers legislation and the agency workers directive revealed that 68 per cent. believed that they would recruit fewer agency workers as a result. When asked whether they would recruit more permanent workers, shifting the emphasis away, only 32 per cent. said that they would recruit more. Inevitably, then, if this Bill is passed, people who have a job at the moment will be kicked out of it with very little prospect of somebody else taking them on. It is clear that that would happen if the Bill were to become an Act.
It is all very well for us to pass legislation that we think is well-meaning and will go down well with our unions at our union branch meetings and all the rest of it. However, we need to think about the individuals who currently have a job and are quite happy doing it under their present terms and conditions. If we are not careful, those of us here who are unhappy for those workers will end up putting them out of work because the idea of this Bill goes down well at a union branch meeting. That, to me, is totally and utterly unacceptable. I certainly do not want to be party to any Bill that will lead to some of my constituents who are in a job and enjoying it being put out of that job as a result.
Another problem of the directive is how it would affect productivity. Far more employers believe that this would have a negative effect on productivity in the workplace than believe it would bring benefits to the workplace.
I am aware that time is moving on and I certainly do not wish to take up too much of the Houses time, but I would like to mention some of the concerns raised by the Recruitment and Employment Confederation. It too did a survey, finding that 84 per cent. of agency workers were satisfied with their assignments and that only 9 per cent. were dissatisfied. Furthermore, 66 per cent. of agency workers are satisfied with their pay, which is up from 56 per cent. last year. More and more agency workers are actually satisfied with their pay. Only 23 per cent. are dissatisfied. A large number38 per cent.said that they were not even looking for permanent work, which is a rise of 6 per cent. on the last quarter.
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