The Prime Minister: My hon. Friend is right. There are always concerns from people who see free trade as a zero-sum game: there must be a loser, there must be a

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winner, and somehow there will be a hollowing out of middle-class, middle-income jobs in our world. I do not believe that is the case. Britain has a lot of goods and services that the world wants to buy, and arguably a lot of those—particularly things such as intellectual property, patent protected services, and financial, banking and insurance services—require a greater opening of other markets to get in there, perhaps more so than just manufacturing and selling a particular good. It is really important for our whole future and prosperity that those deals go ahead.

Michael Fabricant (Lichfield) (Con): The Prime Minister will know that manufacturing output, which he has just been talking about, is up 4.5% this month on the same time last year. He may not know, however, that the west midlands is the only region in the United Kingdom—and one of very few regions in Europe—that has a balance of payments surplus with China. My question follows that of the right hon. Member for Blackburn (Mr Straw) on the BRIC countries: what discussions did the Prime Minister have at the G7 to ensure that there will not be dumping of manufactured products from those countries, and that we continue to see long-term economic success?

Mr Speaker: The hon. Gentleman has made his point, and at rather too great a length I am afraid.

The Prime Minister: My hon. Friend is absolutely right, and if we look at where exports are growing fastest in the United Kingdom, it is not the City of London or the south-east—the west midlands is leading the way. Of course we must have proper rules on dumping, but we sometimes find people using accusations of dumping to oppose the loosening of trade, and I do not think we should see that. The manufactured goods being exported from the west midlands—things such as Jaguar Land Rover cars—are exported on the basis of quality. People want to buy those cars, and the faster we can open up markets and try to fight protectionism in countries such as Brazil or some of the other BRICs, the better for all concerned.

Mr Speaker: I am grateful to the Prime Minister and colleagues.

Nominations for candidates for the post of Chair of the Backbench Business Committee closed at 5 o’clock yesterday afternoon. Only one nomination was received, and therefore a ballot will not take place. I congratulate Natascha Engel on her re-election as Chair of the Committee.

I remind Members that the book for entering the private Member’s Bill ballot is open for Members to sign in the No Lobby. It will be open until the House rises today, except during any Division.

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Debate on the Address

[5th day]

Debate resumed (Order, 10 June).

Question again proposed,

That an Humble Address be presented to Her Majesty, as follows:

Most Gracious Sovereign,

We, Your Majesty’s most dutiful and loyal subjects, the Commons of the United Kingdom of Great Britain and Northern Ireland in Parliament assembled, beg leave to offer our humble thanks to Your Majesty for the Gracious Speech which Your Majesty has addressed to both Houses of Parliament.

Jobs and Work

Mr Speaker: I inform the House that I have selected amendment (b) in the name of the Leader of the Opposition.

1.44 pm

Mr Chuka Umunna (Streatham) (Lab): I beg to move an amendment, at the end of the Question to add:

“but regret that the measures in the Gracious Speech fail to ensure that those who put in a hard day’s work get a decent reward for doing so, or cut the costs to the social security system resulting from the current record 5.2 million workers on low pay and the rising tide of insecurity at work; and call on your Government to bring forward measures setting the Low Pay Commission a five year target to raise the National Minimum Wage faster than average earnings while retaining the capacity to take account of shocks to the economy.”.

We are here to debate the Queen’s Speech, and in particular its impact on jobs and work. Ultimately, to create jobs and work so that someone can raise a family we need sustainable and balanced growth. We cannot legislate our way to sustainable and balanced growth, but a Queen’s Speech and the proposed legislation therein has a role to play. Essentially, today we are debating the economic policies of this Government.

Stephen Mosley (City of Chester) (Con): Will the hon. Gentleman give way?

Mr Umunna: Just one moment. I will give way in a bit.

When I first arrived in this House—together with the hon. Member for City of Chester (Stephen Mosley), I think—I remember that all Government Members wanted to do was talk about the previous Government. This is now their fourth Queen’s Speech and fifth year in office, and it simply will not do to drone on about the last lot. They are in government; they have a record and we will hold them to account for it.

When this Government entered office the country was recovering from a recession that was caused by a global financial crash and precipitated by irresponsible behaviour in the banking sector. When they took office, a recovery was under way, unemployment was falling, growth was rising and stability was beginning to settle in. Those are the facts. However, the extreme fiscal consolidation that they attempted to embark on choked off growth for the best part of three years, causing the Business Secretary, the Work and Pensions Secretary and their ministerial colleagues to fail completely to

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meet their deficit reduction targets. That led to a huge amount of misery for the British people as unemployment soared beyond 2.5 million. Consequently, they borrowed more in three years than the last Labour Government did in 13—again, the facts.

During those three wasted years, the eurozone slumped almost as badly as Britain. Indeed, the Government frequently pointed to the impact of the crisis in the eurozone on our economy. Of course, that crisis hit our exports, and the Business Secretary, like others, referred to that and its impact in this House during previous Queen’s Speech debates. There are, however, a couple of important points. As the economist Lord Skidelsky put so well in his essay on this subject in March, we should have done so much better than the eurozone, given that we retain the pound and control of our exchange rate. The eurozone slump arose in part because European Finance Ministers were pursuing exactly the same kind of failed policies as the Business Secretary and his colleagues.

Things have thankfully moved on. I know the Prime Minister and Chancellor like to take the credit for the return to growth that we are seeing, but let us be clear: the fact that the recovery has kicked in is down to two things. First is the utter determination and hard work of our businesses and firms in weathering the storm, as well as their ingenuity and continuing capacity to innovate, and second is the hard work and compromises made by their employees.

So often we have sat in this House and had to listen to Government Members, week after week, smearing and denigrating our trade unions. I will be most surprised if we get through this debate without that happening again. The agreements that so many workplace convenors reached with firms and businesses in this country—taking pay cuts; accepting reduced hours—helped keep those firms afloat during these difficult times. That is why I am proud to be a member of the GMB and Unite.

We are certainly not out of the woods. The fact that the Bank of England still has the pedal on the floor with a 0.5% interest rate illustrates how fragile the economy still is, and how far the recovery has to go. More than three quarters of a million young people are still out of work. On average, people are still earning £1,600 a year less than they were when this Government came to office. In fact, just before I came into the Chamber, I was speaking to my hon. Friend the Member for Bethnal Green and Bow (Rushanara Ali) who told me that she has a 42% rate of poverty among the children in her constituency, so we still have a lot more to do.

The 2008-09 crash exposed long-standing, big structural problems in our economy that go back decades, admittedly under Governments of different persuasions, and have to be dealt with. This is in spite of the progress made by the previous Government and the stronger supply-side conditions we achieved. What we have now is an economy unbalanced by sector and region, short-termism in our corporate culture leading to low levels of business investment and low productivity, a dysfunctional finance system, and a stubborn and increasing trade deficit.

Mr Marcus Jones (Nuneaton) (Con): Does the hon. Gentleman think it was a measure of the success of the previous Labour Government when our country lost 1.7 million manufacturing jobs?

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Mr Umunna: I absolutely agree with the hon. Gentleman that we need to diversify our economy and grow our manufacturing base, but, as I have just said, these structural issues have grown up over a number of decades under Governments of different persuasions.

At the same time as we are dealing with these structural issues, we face more competition from emerging markets and others than we have ever experienced before, with technological advance and automation creating new jobs but destroying old ones too. That has left our economy failing to meet the material needs of too many families. The problems of these imbalances have resulted in our country having one of the highest incidences of low-paid work in the OECD.

I, of course, accept that any job is better than no job. I note that the Chancellor gave a speech earlier this year committing his party to full employment. They say imitation is the sincerest form of flattery. The only problem with what the Chancellor said is that it is almost 70 years late. It was, of course, the great reforming Attlee Government who first committed to full employment, in our manifesto “Let us Face the Future” in 1945. Unlike the Chancellor, however, we have long sought to build on that commitment. What we want is for everyone in this country to be able to access good work that affords them a level of dignity and respect, and, importantly, that is secure and pays a wage that they can live off. That is simply not the reality for far too many people in Britain in 2014.

Geraint Davies (Swansea West) (Lab/Co-op): There are now 1 million people on zero-hours contracts. Does my hon. Friend accept that their lives consist of moving in and out of benefits? When there is discontinuity in benefits, people have to go to food banks. That is not the way to build a strong economy. Surely, we need infrastructure in city regions and to move forward with export-driven growth, rather than having people living in poverty on zero-hours contracts.

Mr Umunna: I completely agree with my hon. Friend.

Charlie Elphicke (Dover) (Con): A few moments ago, the hon. Gentleman talked about a wage that people can live on. Will a future Labour Government commit to having a living wage in place of the minimum wage, or will his speech be more about rhetoric than firm commitments and pledges to the British people?

Mr Umunna: The hon. Gentleman raises a good point, because 22% of employees in his constituency under this Government are paid less than a living wage. I will come on to what we intend to do and what is so sorely lacking in the Queen’s Speech.

We do not want to wait until a Conservative Chancellor sees the light and matches our ambition in 2084. What we are hoping is that in the Queen’s Speech, and the Bills that follow, he will match our commitment and ensure that we have a better-waged economy. There are two parts to this challenge: first, action to tackle low pay and insecurity at work—I will come on to what the hon. Member for Dover (Charlie Elphicke) talked about—and, secondly, the implementation across Government of an industrial strategy to nurture and grow the sectors that produce the better-paid jobs we want to see across the country.

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On low pay, we make no apologies for reminding the House at every opportunity that it was this party, in the face of strong opposition, that introduced the national minimum wage. When we entered office, some people were earning as little as £1 an hour, a practice I am proud to say we outlawed. To give just one of the many examples of the opposition we faced, when we introduced the national minimum wage into this House 17 years ago, a member of the then shadow Cabinet said:

“If, as I and all my Conservative colleagues believe, the DTI’s minimum wage comes into effect, it will negatively affect, not hundreds of thousands but millions of people.”—[Official Report, 4 July 1997; Vol. 297, c. 526.]

That shadow Cabinet member is now the Work and Pensions Secretary. We had the good sense to ignore him.

Mr Gareth Thomas (Harrow West) (Lab/Co-op): On low pay, is my hon. Friend aware of allegations that several UK parcel carriers, namely Hermes and Yodel, are using so-called lifestyle couriers and effectively paying less than the minimum wage to the staff they use?

Mr Umunna: I thank my hon. Friend for that intervention. I was not aware of that, but I am sure the Business Secretary has heard what he said and will no doubt ensure that his Department looks into those two firms.

We have to build on the national minimum wage. Many Members, for example my hon. Friend the Member for Wansbeck (Ian Lavery), have argued for us to do so. It is currently £6.31 and is due to increase to £6.50 in October, but that is just 53% of median hourly earnings. We want to set—this in part relates to the point raised by the hon. Member for Dover—a more stretching target for the minimum wage for each Parliament, within the Low Pay Commission framework, to increase it faster than average earnings, while retaining capacity to take account of shocks to the economy. We would also give local authorities new powers of inspection and enforcement of the minimum wage, alongside central Government, to ensure it is enforced properly. We would also increase fines for non-payment to £50,000.

A number of measures are contained in the small business, enterprise and employment Bill. We are told, among other things, that the Bill will strengthen UK employment law by tackling national minimum wage abuses. It does not appear, however, that the Government will come close to matching our commitments to strengthen the national minimum wage. There will be no stretching target, no enhanced role for local authorities and much lower fines than we envisage. We will be pushing the Government to adopt our package during the passage of the Bill.

Caroline Lucas (Brighton, Pavilion) (Green): I am glad to hear that the hon. Gentleman is talking about moving towards something that might eventually look like a national living wage. He will recall that it was the Greens on the London Assembly who made the Living Wage Commission a possibility. Will he also consider, as inequality is such a major issue, maximum pay ratios between the highest and lowest paid in companies?

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Mr Umunna: I have to say to the hon. Lady that I thought it was the excellent Mayor of London, Ken Livingstone, who introduced the London living wage.

Barbara Keeley (Worsley and Eccles South) (Lab): May we add to our consideration of people who end up not being paid the minimum wage the scandal of workers in the care sector? A constituent told me recently that although she is contracted to work 40 hours, she is lucky if she is paid for 15 to 20 hours. She is not paid travel time, is paid in dribs and drabs, and short-notice cancellations are the norm. In many weeks she has ended up being paid for only 15 to 20 hours, yet these are the people we are trusting to provide care for our most vulnerable people.

Mr Umunna: I think my hon. Friend is referring to somebody who is on an outrageous and exploitative zero-hours contract that is not reflective of her working conditions. I will come on to that shortly.

Christopher Pincher (Tamworth) (Con): Will the hon. Gentleman give way?

Mr Umunna: I will just make a little progress and I will give way in a bit.

As my right hon. Friend the Leader of the Opposition said last week, under this Government the shocking fact is that for the first time on record more people who are in poverty are now in work than ever before. The minimum wage is important. It is set with an eye to the impact on jobs, but we want employers to pay a living wage. Record numbers are currently paid less than the living wage—I have talked about the 22% in Dover, for example. It is estimated that we have 5.2 million people earning less than the living wage, which is costing the Treasury, at the very least, £750 million in tax credits and £370 million in means-tested benefits. We want to do all we can to ensure that anyone who puts in a hard day’s work gets a decent reward for doing so. That is why it is disappointing to see nothing, not just in this Queen’s Speech but in all four to date, to incentivise employers to pay a living wage.

Stephen Mosley: The proposals to increase the national minimum wage are welcome, but they are no use if the Government then increase taxes and take more money out of people’s pockets. Will the hon. Gentleman do what his leader failed to do last week and rule out any increases in national insurance contributions if Labour were to win the next election?

Mr Umunna: I note that 18.2% of employees in the hon. Gentleman’s constituency are paid less than the living wage. I hope he will be encouraging Ministers in his Government to adopt our proposals to incentivise people to pay it, so that he can reduce that percentage in his constituency.

As for the tax and spending policies of any Government in a future Parliament, these will be set out in a Budget at the time. One of the questions that the hon. Gentleman and others will have to answer is whether they envisage making further reductions in the top rate of tax, giving people earning millions of pounds an even bigger tax cut than they have already.

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Mr Robin Walker (Worcester) (Con) rose—

Christopher Pincher rose—

Mr Umunna: I thought that would rile them. I am going to get on, because I want to ensure that we get other people into this debate.

If elected next year, we would introduce “make work pay” contracts to encourage employers to pay a living wage and help businesses to raise the wages of millions of low-paid workers. This is fully costed and will be entirely funded from the increased tax and national insurance revenue that the Treasury would receive. Again, I encourage the hon. Member for City of Chester to encourage those on his Front Bench to adopt that proposal. If they do, we will support it. However, the silence we have heard from those on the Government Benches when it comes to doing anything on the living wage is quite extraordinary. People will remember the Prime Minister’s speech to London citizens back in 2010. In the last week of that campaign, he said he would do all these things to promote the payment of the living wage and he has done next to nothing—nothing—in office.

However, wages are one thing; insecurity at work is another, and never in recent times has it been so resonant an issue, as my hon. Friend the Member for Worsley and Eccles South (Barbara Keeley) said. I am not at all surprised by that, because since they came to office this Government have mounted a full-frontal attack on people’s rights at work. This is often talked about by Government Members as though it were a trade union issue, but it is an every person issue. Every single person in this country who works has had their rights at work attacked by this Government. They have increased the service requirement to claim for unfair dismissal from one to two years, depriving people of the right to seek justice when they have been wronged in the workplace; they have reduced compensatory awards for unfair dismissal; they have reduced the consultation period for collective redundancy; and they have watered down TUPE protections for people. I could go on. Most starkly, this Government have erected a barrier in the way of those seeking redress with the introduction of tribunal fees.

But perhaps the biggest symbol of insecurity is the extensive use of zero-hours contracts in 2014. The Office for National Statistics estimates that there are 1.4 million zero-hours contracts in use right now.

Christopher Pincher: I am obliged to the hon. Gentleman for giving way. Just in case his Front-Bench team want to prompt him with statistics, my constituency is Tamworth.

The hon. Gentleman talked about the importance of having a job instead of no job. Has he had correspondence with Labour-run Liverpool council or Labour-run Newham council, which make extensive use of zero-hours contracts?

Mr Umunna: What I have said time and time again in this House when we have debated zero-hours contracts—I will come to this point in a moment—is that the Opposition are not opposed in principle to any use of zero-hours contracts. The question is: what are the Government going to do about their exploitative use? What they have announced so far comes nowhere near close to what we have proposed to deal with the exploitative use of such contracts.

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Zero-hours contracts do not oblige employers to offer guaranteed hours of work to their workers. Sure, some workers—it is for this reason that we do not oppose zero-hours contracts in principle—choose the arrangement because they like the flexibility, but for many it leaves them subject to the whim and demands of their employer to work at short notice, promoting insecurity. These arrangements make it almost impossible to own a home, save for a pension or plan family life.

Seema Malhotra (Feltham and Heston) (Lab/Co-op): My hon. Friend is making a powerful speech and rightly highlights the difference between the use and abuse of zero-hours contracts. We have seen high levels of youth unemployment in this country. Does he agree that the use of zero-hours contracts sometimes hides a problem that exists for young people getting on to the work ladder? A constituent of mine talked to me about the insecurity he feels. He cannot plan ahead and does not even know whether he can accompany his mum to a hospital appointment, because he has no idea what will come his way in the week.

Mr Umunna: That is a perfect example of the egregious and exploitative use of such arrangements. We are told that the employment Bill will help hard-working people to have confidence in the terms of their contracts and that it will crack down on the abuse of zero-hours contracts, such as the example my hon. Friend mentions. However, the details that we know of suggest that the Government are simply not going far enough. On its own, banning exclusivity clauses in such arrangements will not do the job. We need, among other things, to give workers the right to a fixed-hours contract when they have regularly worked hours with the same employer for a period of time—such as the constituent of my hon. Friend the Member for Worsley and Eccles South—and to protect them from having their shifts cancelled at short notice without compensation. Above all, we must ensure that people know that they are on a zero-hours arrangement.

I have talked about jobs, wages and security at work. The other part of reforming the jobs market is the implementation across Government of a proper industrial strategy, both to create the right conditions for businesses to thrive in all regions of the country and to put the full weight of Government behind those sectors that can win gold medals in the global marketplace for the UK, creating more of the middle-income jobs we want to see.

Charlie Elphicke rose—

Mr Umunna: I will just make a bit more progress.

Part of that involves ensuring the right environment across the country in all regions for our businesses to grow, and part of it involves a sector-led approach, looking at where we have a competitive edge and comparative advantage relative to our international competitors. I am very supportive of the sectoral approach. It was of course the Labour Government who led the way in that by setting up the Automotive Council.

When it comes to creating the right environment, ensuring that people have the skills our businesses need is crucial. Increasing the quantity and quality of apprenticeships is a must. We have a record to be proud

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of. In government, we rescued apprenticeships from the scrap heap. We more than quadrupled starts—

[

Interruption.

]

Government Members do not want to hear it, but let me give them the facts. We more than quadrupled apprenticeship starts, from a woeful 65,000 under the Major Government to 280,000 in our final year in office.

John Hemming (Birmingham, Yardley) (LD): Is it still the Opposition’s policy to get rid of the intermediate apprenticeship?

Mr Umunna: No, it is not, and I should say that the Deputy Prime Minister’s intervention on this subject while standing in for the Prime Minister at PMQs was deeply embarrassing, given that he was attacking an independent report that was produced by a group of experts for us which said exactly the same as his own Secretary of State’s report for his Department on the same subject.

Andrew Gwynne (Denton and Reddish) (Lab): Does my hon. Friend agree that one of the best ways of increasing the numbers of advanced and higher-level apprenticeships would have been to implement my Apprenticeships and Skills (Public Procurement Contracts) Bill? It would have meant that the billions of pounds of investment that we spend as taxpayers in public procurement could lever in extra apprenticeships at the higher and advanced level.

Mr Umunna: I am very grateful to my hon. Friend for drawing attention to his excellent Bill, which I and many of my hon. Friends were here to support, but which was disappointingly ignored by the Government.

What is happening to apprenticeships now? This issue, frequently raised here by my hon. Friend the Member for Blackpool South (Mr Marsden) and my right hon. Friend the Member for Birmingham, Hodge Hill (Mr Byrne), is worrying.

John Hemming: Will the hon. Gentleman give way?

Mr Umunna: No, I want to make some more progress—[Interruption.] I have been quite generous in giving way.

Countless other colleagues have talked about opportunities for young people. My hon. Friend the Member for Rotherham (Sarah Champion) has drawn attention to the lack of apprenticeship opportunities for people in her constituency. Under-19 apprenticeship starts have fallen by 17,000 over the last academic year, and there are now 2,000 fewer under-19s starting apprenticeships than in 2009-10, and less than 2% of apprenticeship starts last year were at level 4 or above. Where was the Bill in this Queen’s Speech to require all large companies taking on large Government contracts to provide apprenticeships, as we called for? It was not there. Where was the requirement for all apprenticeships to last at least two years and to be at level 3 or above to ensure we maintain their quality? It was not there. We need to see more done on that.

It is important to help those who want to get into work through jobs and training, but it is also important to help those who want to create their own jobs, and

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they will not be able to do that without the finance. We are told that the small business Bill will make it easier for small businesses to access finance. I really hope so, because in the last year, net lending to small and medium-sized businesses fell by £3.2 billion. Scheme after scheme after scheme—from Project Merlin to funding for lending—has simply failed to resolve these problems. In the last quarter, net lending to businesses by funding for lending participants actually fell by £700 million—an issue on which I know my hon. Friends the Members for Rochdale (Simon Danczuk) and for Feltham and Heston (Seema Malhotra) have been campaigning.

Mr Gordon Marsden (Blackpool South) (Lab): Let me inform my hon. Friend that what I hear in my Blackpool surgeries, particularly from small businesses and hoteliers, about the continued failure of a number of banks, including those still supported by this Government, underlines what he is saying. Does that not also underline the fact that we should be looking at the regional initiatives on banks that he and his colleagues have brought forward rather than having the long-standing dithering from the Secretary of State on the whole question of the investment bank?

Mr Umunna: I agree with my hon. Friend. The problem with the Government’s scheme is that, to date, the main transmission mechanism to our small businesses has been the very high street banks that have been the problem. That is why we want to set up not only a British investment bank, but a network of regional banks like the Sparkassen in Germany, to ensure that we get the money to our small businesses.

Finance is one thing, but cash flow is an issue too. If, as we are told, the Government are to extend the obligation for public sector bodies to pay small businesses as their suppliers within 30 days and to apply it all the way down the supply chain, that would be welcome, but on its own it will not be sufficient. We will press Ministers to introduce—I think this will be in the small business Bill—more stringent reporting requirements for customers of small businesses to crack down on those who do not pay on time. I think that the practice of late payment is an absolute national scandal that needs to be dealt with.

I saw the Business Secretary and the Deputy Prime Minister make their trip to the pub the other week. On the one hand, I suppose this was a “kiss and make up” event after the activities of a certain rogue pollster—perhaps the Liberal Democrats’ equivalent of Lord Ashcroft; and on the other hand, it was to draw attention to the measures in the Queen’s Speech on a new statutory code and independent adjudicator to ensure that the sole traders and small businesses that run our 20,000 or so tied pubs are treated fairly. To be honest, after the dither and delay we have seen from this Government and the numerous debates we have had to force on the issue, any action from this Government is welcome, but my fear is that the real reforms that we and others across the House have campaigned for will be watered down. We will scrutinise the detail when the provisions are introduced.

I want to say a word about rebalancing, particularly between regions and within regions. It has simply not happened, and I see nothing in this Queen’s Speech to change that.

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Roberta Blackman-Woods (City of Durham) (Lab): My hon. Friend is making a really strong point about the need to get additional help to the regions. Does he agree that it is unacceptable that start-up businesses in Durham have reduced by 14% over the last year? It is clear that the Government’s policies are not addressing the issues facing the north-east.

Mr Umunna: This is an important issue. Since the recovery kicked in, we have seen around 54% of GDP growth coming in London and the south-east, and around 75% of new jobs created in the same region. It is essential that we see more of that happening in my hon. Friend’s constituency and others around the country.

Let us be honest about it, the Government’s flagship scheme that was supposed to address this problem—the regional growth fund—has become a bit of a joke. More than a third of winning bidders under that scheme’s first round have now withdrawn entirely, while others have been left waiting almost two years to receive their money. Hundreds of millions of pounds of growth fund moneys across the regions are gathering dust in Government coffers and have not yet reached the winning bidders.

Of course, having scrapped our regional development agencies, which I am sure the Business Secretary privately feels was a big mistake, the Government replaced them with local enterprise partnerships, which have simply not been given appropriate budgets or powers to do what was asked of them. In fact, the vast majority of bids made by LEPs to the regional growth fund have been rejected in some regions. Many colleagues across the House—my hon. Friend the Member for Telford (David Wright) has spoken of his area’s desire for a city deal—will tell us, as my hon. Friend the Member for City of Durham (Roberta Blackman-Woods) has just done, that a lot more needs to be done to rebalance our economy geographically.

On sectors, the Business Secretary’s predecessor, the noble Lord Mandelson, started pursuing a course of industrial activism, which, in the main, the Business Secretary has continued in his overall approach. There is a degree of consensus on the principles—that is a good thing—and industrial strategy is part of agenda 2030, our plan for better balanced sustainable growth, which is winning support from businesses across the country. But unless we get the overall environment right—on skills and finance, as I have discussed—across the whole country, delivery on these sectoral strategies will be compromised.

Let me finish by saying a few words about our export position. The Government promised an export-led recovery in their plan for growth. That has simply not materialised, and the measures that the Business Secretary and the Chancellor have introduced to date seem to have made no impact on that. In fact, the Office for Budget Responsibility said that the Budget would have no impact on our net trade position.

The promise to increase exports to £1 trillion by 2020 is disappearing out of reach. It has been reported that civil servants have privately conceded that the Government’s promise to get 100,000 new companies exporting by the end of the decade is “not going to happen”. This is hardly surprising when the Government have not done enough to ensure that small firms are made aware of the support that is out there. Half the members of the Federation of Small Businesses do not even know that

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UK Trade & Investment exists. They need to be given much more information and to be made more aware of what help is available. But then the performance of some of these schemes has been totally lamentable. The £5 billion export refinancing scheme, which was launched in July 2012 as part of the Government’s UK Guarantees scheme, and the £1.5 billion direct lending scheme, launched to great fanfare several months ago, have not helped a single firm. We need to see much more competent delivery of these schemes.

It is clear that our country has huge potential, and there is a huge amount of talent waiting to be unlocked, but people need a Government to empower them to realise their dreams and aspirations. That is not happening under this Government. [Interruption.] The hon. Member for Worcester (Mr Walker) talks about the long-term economic plan. The fact is that for many people—including people in my constituency, where, on average, people are earning £2,300 a year less than they were when the Government came to office—this “long-term economic plan” is a long-term economic sham. That is why we aim to ensure that we can allow and empower people to meet their aspirations by making certain that, this time next year, we are sitting on the other side of the House.

2.20 pm

The Secretary of State for Business, Innovation and Skills (Vince Cable): It is a pleasure to respond to the Opposition amendment, and to introduce a debate on the general topic of jobs and the world of work on what is a very good day for jobs. I was struck by the fact that, in something over half an hour, the shadow Secretary of State—the hon. Member for Streatham (Mr Umunna)—did not make even a passing reference to today’s unemployment figures.

I shall take a three-pronged approach to this debate. I shall deal first with the creation of jobs. Job creation depends on enterprise and business, and a key element of the Queen’s Speech is support for business through the small business Bill, which covers issues such as access to finance, Government procurement, prompt payment and, of course, pubs.

Secondly, I shall make it clear that as our economy recovers—and the recovery is now very firmly embedded —we want to ensure that that recovery is translated into higher-paid jobs and more secure employment. The small business Bill contains measures relating to zero-hours contracts and the minimum wage. It will also ensure that people have decent pensions when they retire, which is another thing that the shadow Secretary of State did not mention. Over a long period, for demographic and economic reasons and as a result of policy failures, there has been a gradual decline in the defined-benefit system, but my right hon. Friend the Secretary of State for Work and Pensions and my hon. Friend the Member for Thornbury and Yate (Steve Webb), the Pensions Minister, are reconstructing a sensible, durable environment for pensioners.

Thirdly, I shall talk about the issue of trust in business. One of the blows to our economy, and many other western economies, during the financial crisis has been a loss of trust. The Bill contains a serious of measures—to which the shadow Secretary of State did not refer—relating to transparency of ownership and the duty of directors, which will be important to the reconstruction of that trust.

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Let me begin, however, by commenting on the Opposition amendment. I try to be polite, but the amendment is not exactly bulging with creative policy initiatives. It contains only one recommendation, which relates to a

“target to raise the National Minimum Wage faster than average earnings”.

The shadow Secretary of State seems to be telling me to do what I am already doing, which is giving guidance to the Low Pay Commission so that it can do exactly that; but I am not entirely sure what the Opposition’s policy is. Is the target to be mandated? If so, that undermines the autonomy of the Low Pay Commission. If not, what the shadow Secretary of State recommends is exactly what we are doing at present, which is giving forward guidance.

I should like to clarify another point. Two or three weeks ago, the Opposition had another policy on the national minimum wage, namely that it should be indexed to earnings. There is no reference to that in the amendment. Is it still the Opposition’s policy? I suspect that, when they did the sums, they discovered that indexing the minimum wage in that way would make it lower than it is now, and quietly dropped it, but may I ask what is the current status of the proposal?

In the amendment, the shadow Secretary of State sensibly acknowledges that the Low Pay Commission must

“take account of shocks to the economy.”

However, he does not mention whether the commission should take account of the impact on employment. That has been at the heart of its work. If it is indeed to take account of the impact on employment, why—as my hon. Friend the Member for City of Chester (Stephen Mosley) asked earlier—are the shadow Secretary of State and his colleagues now promoting the idea of higher taxes on employers through national insurance? If this is to be the major theme of the Opposition’s attack on the Queen’s Speech, their approach will require a great deal more clarity and a great deal more consistency.

Let me now say something about today’s figures, because they are important, even if the shadow Secretary of State did not think it worth his while to talk about them.

Sheila Gilmore (Edinburgh East) (Lab): Will the Secretary of State give way?

Vince Cable: May I finish this point first? As the hon. Lady knows, I am happy to take interventions.

In the last quarter, 340,000 new jobs have been created; 780,000 have been created in the last year, and 2 million have been created since the Government came to office. The level of unemployment is now 6.6%, and is one of the lowest in the developed world. We are approaching German levels, and our figure is significantly better than those in almost all the other European countries. We have 600,000 job vacancies, and if the shadow Secretary of State goes around the country talking to businesses, as I do, he will know that the talk is increasingly of job shortages rather than unemployment. In many key categories— those aged 65 and over, women, disabled people, and lone parents—more people are in work than before the recession began. Of course there are

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serious unemployment problems among young people —we acknowledge that—but youth unemployment is 100,000 down over the year, while long-term unemployment is down by 108,000.

Sheila Gilmore: Does the Secretary of State share my concern about the growing gap between the unemployment figures and the claimant count? More than 2 million people are still unemployed. It is clear that many of those people are not receiving benefits of any kind, and they seem to have disappeared from the statistics. Is the Secretary of State, perhaps in partnership with his colleagues, trying to find out why that is and what we can do to help those people?

Vince Cable: I have been quoting the figures from the International Labour Organisation, which provides the international accepted definition, and they include the people whom the hon. Lady has described. Of course, many people are self-employed, and many of those are potential entrepreneurs. I am sure that she would not want to diminish their contribution.

Opposition Members often say “The job figures are fine as far as they go, but are those jobs full time?” As a result of the strengthening of the labour market within the last year, three quarters of all new jobs have been full-time. Moreover, some interesting information has emerged during the last few weeks. People who are doing part-time work, which is often criticised, have been questioned to establish how many of them wish to do full-time work. The current figure is about 20%, and it is useful to compare that with the figures for the European Union as a whole, for France and for southern Europe, which are 30%, 40% and 60% respectively. The underlying trends in the labour market—not just the top-line figures—are significantly healthier in this country than they are in almost every other part of the European Union.

Fiona O’Donnell (East Lothian) (Lab): The Secretary of State has not yet mentioned young unemployed people. I know that he is always keen to look for ways in which the Liberal Democrats are making a difference in government. Will he tell us about his leader’s youth contract, which, it was claimed, would help 160,000 young people into work by incentivising employers? How many young people have benefited so far?

Vince Cable: The fact that youth unemployment has fallen by 100,000 in the last year is significantly owing to the youth contract, as is the advance in apprenticeships—and the shadow Secretary of State’s comments on apprenticeships were an absolute travesty. We know that there has been a big increase in terms of both quantity and quality, and, of course, the support given to employers so that they can take on young people has been an important and extremely positive element of the youth contract.

Mr Steve Reed (Croydon North) (Lab): One of the problems is that all too often under this Government work simply does not pay enough. Does the Secretary of State accept any responsibility for the fact that since the Government came to power, the number of working people claiming housing benefit in Croydon has increased by 1,100%?

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Vince Cable: Quite a lot of those people have moved from unemployment to work, which explains the change in the definition. However, we want to ensure that people are in work and are properly paid in work, rather than being dependent on benefits.

Rushanara Ali (Bethnal Green and Bow) (Lab): What are the Government doing to deal with the fact that people under 25 are four times more likely to be unemployed than those over 25? He has talked about youth unemployment, but that group really is not benefiting from any of the Government’s policies.

Vince Cable: The hon. Lady makes a valid point. I know that in her constituency there is a particular problem with graduate unemployment, which we have discussed. Youth unemployment is a long-standing problem. It was very substantial even before we got into this major recession and financial crisis. We need to deal with it in a variety of ways: job training, apprenticeships and by providing a better-working market.

Mark Pawsey (Rugby) (Con): I ran a business before coming into this place and the Secretary of State will know that what businesses need is confidence that they will be rewarded for making the right decisions. That will encourage businesses to take on more people and deal with many of the issues raised by the Labour party. This Government have given businesses confidence and that is why we are seeing significant reductions in unemployment.

Vince Cable: That is why I started my speech by saying that the most important thing we are doing is encouraging small businesses to grow. That is where the jobs come from. That is what I am keen to get to, but as the Opposition amendment was couched solely in terms of the second element of the Bill, that is what I am now trying to address.

Several hon. Members rose—

Vince Cable: I will take two more interventions and then move on.

Charlie Elphicke: Does my right hon. Friend agree that the Opposition’s stance, which is to pick out any poor statistic or position, highlights that they are completely in denial about the recovery’s strength? It exposes their lack of any vision to secure economic growth for this country.

Vince Cable: I was going to go on shortly to what is underpinning labour market growth, which is strong and balanced economic growth. I will come back to that.

Gordon Birtwistle (Burnley) (LD): Is the Secretary of State as disappointed as I am by the constant deriding of manufacturing and the growth in the economy by the shadow Secretary of State, who, every time he gets up, runs the economy down? Is that the right way to give confidence to businesses to drag us out of the recession that Labour left behind?

Several hon. Members rose—

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Vince Cable: I will take more interventions later, if hon. Members will let me make a little progress. That intervention prompts me to remind the House where we are with the economy. We are the strongest growing of the major G7 countries. Major forecasts by the IMF and the OECD suggest that this year growth will be between 2.7% and 3.5%, which is quite exceptional in current circumstances, with the trend continuing in 2015.

What is more important is the fact that that has been achieved in a balanced way. In the last three quarters, manufacturing has been growing faster than the economy as a whole. Business investment, which was seriously depressed through the recession, is now experiencing double-digit growth on an annualised basis. I was taken aback when the hon. Member for Streatham started to tell me about the industrial strategy. I was in the House for the 13 years of the last Labour Government. Throughout that period, any suggestion that we have the kind of industrial strategy that we are now leading was regarded with utter ridicule by—

Mr Umunna: Will the Secretary of State give way?

Vince Cable: I will in a moment. The hon. Gentleman has reminded us of some genuinely useful things that were left by my predecessor, including the Automotive Council. Of course no money or long-term investment was attached. We are now doing work with the high-value manufacturing sector through the Catapult centres. There has been a billion-pound co-investment in new automotive propulsion systems. That did not exist. However, some things left by my predecessor were useful. They were small, but they did contribute to what is now a valued industrial strategy supported on both sides of industry. I am glad that the Opposition have bought into it, albeit rather belatedly.

Mr Umunna: I am sorry, but that is rather ridiculous coming from a BIS Secretary who in opposition argued for the abolition of his own Department. Now he is trying to pose as a great industrial activist.

Vince Cable: My Department is now very different. It now includes universities, science and many other things. In one period during the last Labour Government—the hon. Gentleman may remember it; I think that the right hon. Member for Kingston upon Hull West and Hessle (Alan Johnson) was the Minister who started the change—there were about 186 different systems of industrial support, the cumulative effect of which was largely negative because we had large-scale deindustrialisation. We are pursuing the strategy in a much more concerted way, in partnership with business and on a long-term basis. That is what we are achieving.

Sammy Wilson (East Antrim) (DUP): The right hon. Gentleman talks about how the policy is seeking to grow the economy in a balanced way, but does he accept that many regions of the UK are not growing at the same rate as the south-east of England, for example? Places such as Northern Ireland are suffering from that. Why in the Queen’s Speech is there no reference, for example, to the devolution of corporation tax to the Northern Ireland Executive, which would help them to grow the economy in Northern Ireland by more than is happening at present?

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Vince Cable: I accept the point that there are regional differences in the pace at which the recovery is happening. As it happens, of the four nations in the UK, Scotland and Wales are growing more rapidly than the UK average. However, Northern Ireland is not. I know that there is a debate about corporation tax. I do not think that is the central issue. The problem in Northern Ireland, as the hon. Gentleman well knows, is that two major banks are bad banks and are seriously contracting lending to small business. I am trying to work with the Northern Ireland authorities to assist with that.

Mr Tom Clarke (Coatbridge, Chryston and Bellshill) (Lab): The right hon. Gentleman has not so far given the figures on zero-hours contracts. He will know that the Office for National Statistics has said that 1.4 million people are on those contracts, but the Government say that only 250,000 are. What is the reason for the difference?

Vince Cable: I was going to talk about zero-hours contracts later, but since the right hon. Gentleman has asked me the question, I will try to explain. There are very different estimates of zero-hours contracts. The ONS gives very different figures from other surveys. They range from roughly 2% to 4% of all jobs. It is worth mentioning this in passing. The shadow Secretary of State has been quite modest about his own contribution. He has been in correspondence with the statistical authority, which rebuked him for being misleading in terms of the trend in zero-hours contracts. It is a significant problem, and in a few moments, I will come to how we want to address it.

Let me move on to the underlying question in relation to zero-hours contracts and to what the Opposition are trying to say about living standards. What has always surprised me in these debates is that people are surprised that living standards fell in the wake of the financial crisis. Let me rehearse some basic facts. In the 2008-09 crisis, the British economy contracted by over 7%—more than any other major economy. It was the worst shock to our country—worse than in the 1930s. It was only after the first world war that we had a comparable hit to our economy. It was an enormous disruption, with massive implications for people’s jobs and living standards. It did happen under the last Government. It was not entirely their mistake, but it was on their watch and they had a substantial responsibility for it.

That contraction of output inevitably translated into people’s living standards, and median wages in real terms contracted by about 7% as a result of the crisis. That has been the impact on living standards. It is clear. What is different from previous recessions is that the people at the bottom end of the scale have been protected by two things: first, the minimum wage—there is cross-party consensus on that, which I welcome—and, secondly, tax policies that led us to lift large numbers of low earners out of tax altogether.

Let us look at what the combination of those factors has meant and the work of the Institute for Fiscal Studies. It makes the point that the contraction in real take-home pay for people in the bottom 10% was 2.5%. For the people in the middle, it was 6% and for the people in the top 10%, it was 8.7%. That was an essentially progressive response to a major economic crisis. Of course there are still major inequalities of income and wealth. We acknowledge that, but that relates to the top 1%, rather than the top 10%.

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How do we strengthen the minimum wage system, which my colleagues and I fully buy into? We decided earlier this year to increase the minimum wage faster than inflation—a 3% increase, the biggest cash increase since before the recession. The Low Pay Commission has issued guidance to secure improvements to the real minimum wage. We accept that one of the main challenges—which the last Government did absolutely nothing about—was enforcement. We inherited a system in which the maximum fine per company was £5,000. Under this legislation, we will strengthen it to £20,000 per worker—a big step up in taking seriously sanctions in respect of the minimum wage. We now have a naming and shaming regime in place, and 30 companies have been named since it was initiated a few months ago, and as a result of much more active intervention by Her Majesty’s Revenue and Customs, we have increased by a factor of 38% the amount of arrears identified and paid to employees. All the things that the shadow Secretary of State is calling for are now being done.

Let me address the specific issue of zero-hours contacts. It is a problem, but let us get it into perspective. Although there are wide variations in the estimated number of zero-hours contracts, we are talking probably about between 2% and 4% of jobs. Of course we do not want people in that type of employment to be disadvantaged, but many take up such employment voluntarily, and particularly for students and older workers, it is an attractive system. For some, however, it is exploitative and as a result of our consultation—one of the biggest that the Government have undertaken, with over 36,000 people responding—it was very clear that there were some points on which action needed to be taken, and we are going to take action on exclusivity.

Geraint Davies: Does the Secretary of State accept in principle that if the Government converted a £20,000 a year job into two £10,000 a year jobs, with the higher tax threshold, he would be moving from tax payment to zero tax payment, and that this inflexibility and zero-hours and part-time work are contributing massively towards the increasing debt we face under his Government?

Vince Cable: That is attributing a slightly sinister train of argument to employers, which is not the case. There are many industries that have flexible working arrangements—and zero-hours contracts are only one form of flexible working—which the work force accept. The shadow Secretary of State talked proudly about his membership of Unite. I engage with the car trade unions, which accept that zero-hours contracts have quite an important part to play in the flexible working in the automobile industry.

Paul Farrelly (Newcastle-under-Lyme) (Lab): In the Government’s response to the debate that we held on zero-hours contracts last October, the Minister of State, Department for Business, Innovation and Skills, the right hon. Member for Sevenoaks (Michael Fallon), said that it was perfectly reasonable for Opposition Members to ask whether the consultation would also address problems with short-time working and agency working. What conclusions did the consultation come to on those aspects of employment practice?

Vince Cable: I am not sure precisely what the hon. Gentleman is driving at. As he knows, there is an agency workers directive, which we have transposed

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into British law. It is not terribly popular with many parts of business, but it was agreed between employers and employees. I am not sure what else he is referring to.

Barbara Keeley: I want to refer back to the points made about the quality of jobs and whether jobs are full time or part time, and how people feel about that. Will the Secretary of State comment on a recruitment exercise that an agency has just done in my constituency for jobs in a warehouse that start at 3 in the morning, when there is no public transport? A very large number of people were put through a week-long recruitment exercise for that, and only a very small number were offered jobs. They were offered four hours of work a day, starting at 3 or 4 in the morning at a warehouse. People were mandated to attend that training. This is the kind of thing that is happening. Does the Secretary of State think that my constituents want to be offered jobs picking in a warehouse at 3 in the morning when there is no transport and where, instead of offering full-time jobs to fewer people, a larger number of people are being offered four or five hours of work a day? How can people live with that kind of casualisation?

Vince Cable: Obviously, I do not know all the details of that case, but it seems a very bad one. It is not clear to me whether it is to do with the employer or the way that the benefits system has impacted on people, but if the hon. Lady writes to me we will get it investigated.

Charlie Elphicke: I am a passionate believer in reform of zero-hours contracts, but does the Secretary of State agree that Opposition Members’ comments sit ill with the White Paper that the Labour Government issued that said that Labour

“wishes to retain the flexibility these contracts offer business”?

They then proceeded to do nothing about it for the rest of their time in office.

Vince Cable: I thank the hon. Gentleman for reminding us of that. Two of my Labour predecessors investigated this problem and neither of them felt there was sufficient cause to change the legislation.

Ian Paisley (North Antrim) (DUP): The figures show that 580 more people are employed in my constituency now than this time last year, which is positive news for the area. However, what conversations is the Secretary of State having with the devolved Administrations to ensure unemployment continues to be tackled, especially for low-wage earners?

Vince Cable: Although the situation is improving in Northern Ireland, there are significant unemployment black spots. I want to work with the Northern Ireland devolved authorities to make sure that we deal with them systematically. As the hon. Gentleman knows, this is a long-standing problem in Northern Ireland that goes back long before the recession.

Mr Gareth Thomas (Harrow West) (Lab/Co-op): I raised previously allegations concerning a number of UK parcel carriers and minimum wage enforcement. Will the Secretary of State undertake to look at whether the minimum wage is being properly enforced by UK parcel carriers? Apart from the justice issues for the

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individuals concerned, there is the potential to affect the sustainability of the universal service obligation that Royal Mail is under.

Vince Cable: Certainly, if there is abuse of the minimum wage, we will want to know about it and we will investigate it. Liberalisation and the opening of the market was mandated by the European Commission some years ago, and it was implemented by the last Government, and we are now seeing the consequences in terms of pay and conditions.

Fiona O'Donnell: Will the Secretary of State remind me—and the Secretary of State for Work and Pensions, while he is sitting at his side—whether he still believes that any of my constituents on jobseeker’s allowance who turn down a zero-hours contract job offer should then be subject to sanctions?

Vince Cable: The same sanctions apply to all forms of employment.

Richard Graham (Gloucester) (Con): My right hon. Friend has taken several questions on zero-hours contracts, but may I ask him a slightly different question? One of the most interesting statistics that has come out today is from the south-west Manufacturing Advisory Service, which serves as a leading indicator: 49% of all small and medium-sized enterprises manufacturing in the south-west have said they expect to employ more people over the next six months. Does my right hon. Friend agree that when we look at the forward leading indicators—whether for zero-hours or full-time employment in a great industry like aerospace in the corridor between Bristol and Cheltenham or other manufacturing industries around my constituency of Gloucester—we see there are huge indications of really positive jobs growth in really good growth industries?

Vince Cable: Yes, there are, and that is a very good example. We had an earlier exchange on the aerospace industry. One of the major accomplishments of the industrial strategy is that we now have a partnership stretching between Parliaments, guaranteeing large-scale investment by the Government as well by industry, and that is one of the factors contributing to the confidence that my hon. Friend described.

In my concluding remarks, I want to refer to the specific measures introduced in the small business Bill, which will support small business. Let me say at the outset that I fully accept the shadow Secretary of State’s point that one of the central issues affecting small business is access to bank credit. It remains a very big issue, and it is not difficult to understand why. We had the biggest banking crisis in our history going all the way back to the beginning of the 19th century. We have never had anything on this scale, and Britain was uniquely affected because of the scale of banks in the UK relative to GDP—it is higher, I think, than in any other country except Iceland—and, again, the Labour Government had responsibility at the time. The effect of the bank collapse and the subsequent deleveraging that has taken place, particularly in RBS, have been deeply damaging to business. We understand that and are taking steps to deal with it.

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The British Business bank is now playing a significant part. Over the past year, I think there have been net flows of £660 million into the small business sector. That is a mixture of new flows to organisations such as Funding Circle and to the challenger banks, together with the guarantee schemes, which have increased by a factor of 75% since they came under the Business bank.

We are running up a downward-moving escalator, but the Government accept that we have a responsibility to intervene heavily to support like lending in the wake of an extremely damaging banking crisis. That is the context in which we are operating. The Bill will contain a series of measures that will help further. Late payment is a massive issue for small businesses, with something in the order of £30 billion in outstanding payments. The legislation will introduce a requirement on companies to be much more transparent in how they deal with late payments.

We also want to introduce much more competition in banking, to ensure that banks will come forward and lend to small businesses. Within the last year, we have seen the creation of a whole set of new banks, supported by the Business bank. The big obstacle—which I recall describing in the House 15 years ago at the time of the Cruickshank report—is the fact that the four leading banks had a stranglehold over the process through the payments system. We have introduced a new form of regulation of the payments system, opening it up to competition and preventing the kind of stranglehold that the existing banks have. The Bill will enable that to happen. In addition, we want to ensure that we have a proper system of data sharing. The lack of such a system is one of the obstacles to new banks coming in and competing. There are also problems with export finance, but the new Bill will enable us to extend export finance into new areas.

The shadow Secretary of State talked about the small business measures having taken a long time, and we accept that. There has been a massive consultation on pubs, for example. It has gone on for many years—indeed, it started long before this Government came into office—but we are now taking action. There will be a statutory code and an arbitration body. There will also be an option for an independent, market-based rent review. I am sure that we will discuss this legislation extensively, but it does represent action after many years of pressure from the Select Committee and from other Members.

Other business measures will include those relating to public procurement. This Government have opened up public procurement in central Government to small business in a way that has never happened before, but that has not always happened throughout the wider public sector, including local government. The measures that we are introducing in this big Bill will considerably improve practice in public procurement, opening up the rest of the public sector.

Mr John Spellar (Warley) (Lab): The Secretary of State might have had representations from local opticians who had previously provided a service to the Driver and Vehicle Licensing Agency. All their contracts have been taken away from them, bundled up and handed to one big national company, Specsavers. Does not that show that, although the rhetoric might be fine, many Departments are still letting the system down?

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Vince Cable: When the right hon. Gentleman looks at the figures, I think that he will find that there has been a substantial increase in the share of small businesses in central Government procurement. I am not a customer of Specsavers, but I will happily investigate the case that he raises.

The criticism from the Opposition and certain outside commentators has been that the legislative programme is light, and that there will not be a great deal for the House to do. In relation to the small business, enterprise and employment Bill, I would simply say be careful what you wish for. It will be one of the major pieces of legislation, and it will get to grips with many detailed, complex issues. It will make a significant difference. We are introducing it against the background of a real, balanced recovery that is having a major effect on employment, and it will reflect the substantial achievements of this Government.

Several hon. Members rose—

Madam Deputy Speaker (Mrs Eleanor Laing): Order. It will be obvious to the House that a large number of people wish to speak in the debate and that there is limited time. I should also point out that the Front-Bench speeches have taken well over an hour, so if Members wish to remonstrate about the shortness of time, they should address their remonstrations not to the Chair, but to those on the Front Benches. I have to impose a time limit of six minutes on Back-Bench speeches.

2.54 pm

Mr Adrian Bailey (West Bromwich West) (Lab/Co-op): In view of the shortness of time, I shall confine my remarks to two aspects of the Queen’s Speech. The first relates to the commitment to increase the number of apprenticeship places to 2 million, and the second relates to pub companies. Both issues have attracted considerable interest from the Business, Innovation and Skills Committee, as the Secretary of State has acknowledged.

I welcome the commitment to having 2 million apprenticeship places, but if the Government are to avoid the accusation that they are not matching their rhetoric with detailed policies to deliver those places, we shall need more information on this proposal and on the changes to other policies that will be necessary. In regard to the Government’s phraseology, I must point out that “apprenticeship places” are not necessarily the same as apprenticeship placements. If we look at the records for the past full year, we can see that the number of apprenticeship placements that were actually taken up fell to 510,000. Raising the total number of apprentices to 2 million will therefore require a considerable change in policy. Perhaps more seriously, there has been a drop in the number of apprentices taking placements in the key sectors at which the Government are aiming this policy—namely, construction and manufacturing. If we are to have a skills programme based on apprentices that is designed to address the acute skills shortage—which will be strategically important in delivering economic growth—we will need a far more comprehensive list of policy proposals.

Damian Collins (Folkestone and Hythe) (Con): Will the hon. Gentleman give way?

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Mr Bailey: I am sorry; I will not give way owing to the shortness of time.

A factor in getting more people to take up apprenticeships in key areas is the culture that exists in schools. We need better careers advice, as the City and Guilds Group pointed out following the Queen’s Speech. It commented on the lamentable level of careers advice in schools, which was ensuring that awareness of apprenticeships in key areas remained low compared with the awareness—and, indeed, promotion—of more academic qualifications for young people. I cannot go into greater detail at the moment, but we need a change in the culture in our schools if we are to deliver a pipeline of young people into apprenticeship places in order to deliver on a forward-looking economic agenda for the Government. If we were to revert to a numbers-driven target for apprenticeship places, there would be a real danger of boosting numbers without taking into account quality or relevance. That would simply reinforce the negative perception of apprenticeships, creating a further barrier to recruitment.

My other point relates to pub companies. The Secretary of State has rightly recognised the work of the Select Committee on this issue, and I pay tribute to him for reversing the position of the previous Minister responsible for pub companies, who was prepared to commit only to a voluntary approach. The Secretary of State has recognised that the industry has dragged its feet and been obstructive, and he is now introducing legislation.

The proposals for a statutory code and an independent regulator are welcome, although we shall no doubt want to debate them in greater detail later. However, the failure to commit to introducing a mandatory free-of-tie option will leave publicans feeling let down and disillusioned. It was ironic that when the Secretary of State and the Deputy Prime Minister held their meeting in a pub, we were not quite sure whether a pub company owned that pub. They will have had to be quite selective about the pub they visited in order to get the welcome that they wanted.

The fact is that the overwhelming number of tenants support a free-of-tie option and a mandatory rent review. According to the Government’s consultation, 92% of tenants saw the beer tie as their biggest challenge. My conversations with tenants on this issue and the proposals in the Government response indicate that one of the key problems is the deep suspicion of the rent revaluations based on Royal Institution of Chartered Surveyors guidelines; their experience has not given them any confidence that this will significantly address issues that have been so long debated.

I welcome the Secretary of State’s commitment to review things after two years. Although I am not in a position to bind the future Select Committee, I strongly recommend that it carry out further inquiries in this area, with a view to raising the issue again with future Governments.

3 pm

Dame Angela Watkinson (Hornchurch and Upminster) (Con): I welcome the opportunity to make a brief contribution to this debate on the Gracious Speech. I shall concentrate my remarks on small businesses, growth and jobs, but first I shall comment briefly on the inclusion

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in the Serious Crime Bill of the recognition of the emotional and psychological neglect of children as an offence.

The wilful withholding of emotional warmth and support is damaging to psychological well-being and to mental health, and can lead to negative long-term outcomes for young people, an absence of self-worth, risky behaviour, poor academic achievement and offending. I hope that during the Bill’s passage consideration might be given to extending legislative protection to children up to the age of 18 who have experienced emotional deprivation in this type of upbringing, have never received approval, praise or encouragement, and would find sustaining independent adult life without succumbing to its many pitfalls extremely challenging.

I welcome the measures in the small business, enterprise and employment Bill, which will build on the fall in unemployment both nationally and in Hornchurch and Upminster. Since 2001, my constituency had been stuck with an unemployment rate of about 3.5%, but this year the claimant rate has dropped to 2.8%. That is not just a statistic; it means that many individuals who have been released from benefit dependency have gained not just an earned income but self-esteem and the satisfaction of independence. This Government’s welfare reforms have all contributed to the fall in unemployment, especially for people who have been out of work long term. The £2,000 off employers’ national insurance bills, the doubling of small business rate relief until April 2015, the increased number of apprenticeships and the new private sector jobs, particularly in retail and construction—up 9% and 19% respectively in Hornchurch and Upminster—have all contributed to the fall in unemployment.

I pay tribute to the schools and colleges in my constituency, and to the value they place on fiscal education, the preparation they give for adult life in their citizenship classes, and the development of life skills, which inspire ambition and aspiration in their pupils to achieve their maximum potential through further education, apprenticeship or employment. That is particularly important for pupils who come from workless households, where these examples of opportunities for a successful future may not be considered. Those pupils need to know that the professions, public service and starting up a business are all open to them, and are not just for other people.

Ford, as a large employer in a neighbouring constituency, is also playing an important role by supporting the women in engineering compact, which was launched on 7 May. Ford has traditionally provided jobs for my constituents and is now influencing the future career paths of female students by demonstrating the attractiveness of technical careers to women by visiting schools and colleges to talk about the opportunities in STEM—science, technology, engineering and maths—careers.

Small businesses are the foundation of the local economy in my constituency. The majority—86%—have an annual turnover of less than £250,000; 10% have a turnover of between £250,000 and £l million; and only 4% have a turnover of between £1 million and £5 million. These figures represent an increase of 11% in the first quarter of 2014 over the same quarter in 2013, which explains the increase in local job availability. Many people commute daily to London to work using c2c or the District line, but the many local small businesses provide jobs for local people who prefer to work locally.

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I know they will welcome the establishment of a deregulation target and the introduction of a new appeals champion to protect business against the impact of costly and burdensome regulation. They will also welcome the new measures to tackle late payment by larger firms, which causes serious cash flow problems in a small business. In addition, the streamlining of access to the public procurement market for small businesses will widen opportunities for the growth that enables those businesses to create more jobs and help unemployed people back into work.

The London chamber of commerce and industry has welcomed this Bill but has raised concern about inadequate skills availability, reporting that 45% of London businesses had difficulty recruiting suitably qualified staff to fill vacancies, and that despite stubbornly high youth unemployment there remains a significant skills gap in a number of sectors. Employers recognise that younger people can be a great asset to their business, but developing their skills can be a costly investment. There is an opportunity for closer collaboration between colleges, training and apprenticeship providers, employers and government to pool their knowledge and experience to ensure that young people are acquiring the right skills to make them employable. Both the London chamber of commerce and industry and the Federation of Small Businesses welcome this Bill, and so do I—I wish it a speedy passage through Parliament.

3.6 pm

Mr Tom Clarke (Coatbridge, Chryston and Bellshill) (Lab): In March 2014, the Chancellor of the Exchequer said that

“while unemployment has come down, there are still over 2 million looking for a job. It will take time to fix that. But we will not rest while we still have so much wasted potential in some parts of our country.”

I could not agree more, but in the fifth year of this Government I would offer an alternative recipe to the one that has so far been provided.

The fact is that there is greater insecurity in the workplace, not as a consequence of the Government’s economy strategy but because it is at the heart of that strategy. As we have heard today, competition on low wages and low-skilled jobs will not lead individuals or families out of impoverishment. People face the insecurity of zero-hours contracts, which we have rightly discussed, with the Office for National Statistics estimating that 1.4 million are involved. It is shameful that nobody can say with any certainty the precise number of people who are forced to work on these contracts. I welcome the Secretary of State’s saying in response to my intervention that this is “a significant problem”—it is indeed, and I hope he will accept that now is the time to lift the lid on what is going on, to remove the veil of secrecy and to provide some transparency so that we can be told exactly what is going on.

Earlier this year, I asked the Chancellor a question about unemployment in my constituency, but his reply skated over the reality. Setting aside part-time, zero-hours and low-paid jobs, I will tell the House the reality. Since the global crisis, the unemployment figures for my constituency have rocketed from 2,800 in 2008 to 5,300 in 2014—that is a staggering increase of 89.3%. What

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about the future? Youth unemployment has increased by 53.5% in the same period. And all this has happened as the rich have become wealthier while under this Government millions of people—many of them in my constituency—have barely had an increase in pay.

Is it any wonder that these policies are leading to extremes? “Get us out of Britain”, says the Scottish National party in Scotland. “Get us out of Europe”, screams the United Kingdom Independence party. “Let’s become inward-looking and introspective in response to global challenges”, it says, while 3.1 million jobs are at risk over Europe. The media would have us believe that in the recent European elections, people voted principally against Europe and against immigration. Neither I nor the polls agree. As Nye Bevan once said:

“Such a naive belief in the rational conduct of human beings would wipe out the whole of modern psychology.”

Is it any wonder that, out of frustration, people looking for jobs can be duped or beguiled into believing the propaganda from both UKIP and the SNP? They are responding to their own experiences of declining standards of living and austerity. Therein lies my deepest worry, which is reflected in what is going on in France. I am talking about the challenge to freedom itself.

As we emerged from the second world war, we had to deal with greater economic challenges and a far bigger deficit problem than we have now. Sir William Beveridge in his book “Full Employment in a Free Society,” wrote:

“If full employment is not won and kept, no liberties are secure, for to many they will not seem worthwhile.”

There is an immense responsibility on this House, at this period in our history, to respond to the real concerns of ordinary people, who know, despite the statistics and propaganda, that life for them is very difficult. There are difficulties in dealing with the cost of living; difficulties in dealing with energy prices; and difficulties in finding jobs and in keeping them. In the interests of all our people throughout the United Kingdom, we should ensure that there are real, well-paid jobs and a good future for our young people based on proper apprenticeship and training. We should seize the opportunity, even in the short time between now and the election, to respond to the British people and ensure that we aim to help the many and not just the few.

Several hon. Members rose—

Madam Deputy Speaker (Mrs Eleanor Laing): Order. As I indicated earlier, there are a great many colleagues still wishing to speak; indeed there are 40 of them. Therefore, after the next speaker, I will reduce the time limit to five minutes.

3.12 pm

John Howell (Henley) (Con): Like the Secretary of State, let me start by concentrating on today’s good employment figures, especially those from Henley. We have seen a 60% drop in the unemployment figures, giving us a lower level of unemployment than before the general election of 2010. The figure itself stands at 371, which makes us the third best performing constituency in the UK—the two constituencies that beat us probably have more sheep than people. It is 21 lower than in April 2014, and 209 lower than a year ago. Crucially, the number of young unemployed remains around the 20 mark for the two towns of Thame and Henley.

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The shadow Secretary of State attacked this Government’s long-term economic plan, but these figures show that the plan is working, and the good news that there are 2 million more people in work since the election reinforces that point. The news is exceptionally good. In my constituency, we would have to go back more than six years to find such good figures. It is a remarkable achievement and I am proud of the way in which business has reacted locally to help young people get into jobs. These remain difficult times for families who are still feeling the impact of the recession, but the foundations for a broad-based recovery are now in place. I am keen to see living standards continue to rise so that we can build on those foundations, and we need to keep growing the economy and creating more jobs.

The problem for me is that there are too few people who are unemployed to have a meaningful jobs club. I found a way around that, which was to have a club to encourage and teach businesses how to keep their employees rather than my trying to find placements for them.

In looking at how this Queen’s Speech continues to build on the good work already started in the long-term economic plan, I want to put my finger on one measure in particular, which is national insurance contributions. Cutting businesses’ national insurance contributions by £2,000 has taken 450,000 firms out of paying employer NIC all together. That follows on from increasing the secondary threshold—the level of earnings above which employers start to pay national insurance for an employee.

We were prevented from sharing in the national insurance holiday introduced in the first Budget as it was regionally oriented away from the south-east, but the £2,000 relief introduced in Budget 2013, the employment allowance, was a welcome addition. Will Labour now confirm that it will not increase that tax again?

The national insurance contributions Bill heralded in the Queen’s Speech is required to simplify the collection of NICs payable by the self-employed and to tackle certain avoidance measures. I urge Ministers to look carefully at the situation in which a small proportion of people pay their class 2 NICs and are not in self-assessment. They need to be able to continue to pay their class 2 NICs.

I was pleased to see that the avoidance measures tackle the situation in which people hang on to the cash in question through long disputes and it will stop them gaining a potentially significant cash-flow advantage. I urge Ministers to ensure that the scheme is tightly drawn so that it will not catch innocent providers.

I also want to touch on the small business, enterprise and employment Bill. Small businesses make a huge contribution to the UK economy and account for around half of UK jobs. One of the areas that the Bill tackles is that of employment tribunals. I understand that it tries to prevent their postponement. Employment tribunals often suffer unnecessary delays, and one of the contributing factors is the frequent requests for postponements at short notice. That has a big impact on the costs to business. It is also necessary to ensure that the rights of claimants are protected, and I was pleased to see the idea of a penalty for non-payment of employment tribunal awards.

One of the other sections of this Bill is the need to ensure that employers pay their workers at least the national minimum wage. The enforcement of that measure is very serious. We are already the first Government to

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name and shame employers. The number of employers penalised last year almost doubled to more than 600, and the new measure is a logical extension of that.

Finally, on apprenticeship reforms, anything that can be done to ease access to apprenticeships and increase our understanding of them has to be welcome. I am thinking of short, simple standards rather than long, complex frameworks to characterise apprenticeships. It will also be necessary to increase their quality through higher expectations of English and maths and to raise aspirations

The Queen’s Speech contains those and many other measures, which will help to boost jobs and work. It will help small businesses access the public procurement market and hopefully lead to more reductions in unemployment in my constituency.

3.18 pm

Mr David Winnick (Walsall North) (Lab): When the opportunity arises, I will express my reservations about, if not opposition to, the recall Bill. It is not the right way of dealing with a matter that is obviously of concern to all of us, which is those Members who act in a wrong and dishonest way. We should bear it in mind that two Members have recently resigned in circumstances that we all understand, so there is a different way of dealing with these matters rather than in a recall Bill.

Obviously, I want to deal with the main subject of today’s debate. The Queen’s Speech refers to rewarding those who work hard, and I agree with that; it is a good sentiment. However, it does not describe the situation as it is. Millions—literally millions—of people throughout the country, a good number of whom are actually in jobs, are struggling week by week to try to make ends meet. Despite all the denials by Government Members, poverty is increasing. That is certainly the case in my constituency and other parts of the west midlands. More than 50% of families who are living in poverty have at least one adult in work. Yes, we want people to be able to have jobs—unemployment is a curse and the Labour party has said that from the very beginning, ever since it was formed—but it is also a question of having adequate wages.

The reasons for the sort of poverty experienced in places such as my constituency are easy to see: low wages, wage freezes, rising everyday costs, not least of domestic fuel—and let us not forget for one moment the infamous bedroom tax. I am very pleased that we have already given a firm pledge that that notorious measure will be repealed by the next Labour Government. A lot has been said by Opposition Members, and rightly so, about the abuse arising from zero-hours contracts.

For those Government Members who say that this is all an exaggeration and that poverty does not exist at anywhere near this level—

Mr Robin Walker indicated dissent.

Mr Winnick: I see the hon. Gentleman shaking his head. Let me mention one statistic that has been sent to all Members by the Trussell Trust, which, as we all know, provides food banks: in 2013-14, nearly 1 million people received three days of emergency food from that trust alone—there are other such food banks—whereas the figure for 2012-13 was 347,000. In one financial

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year, there has been a 163% increase in the number of people needing to go to food banks. People do not go to food banks for fun. They do not go to food banks because it is free food, as some Government Members wish us to believe. People cannot just go to a food bank and get food; they have to have a voucher and satisfy someone that there is a need for that assistance, and there is a limit to the number of times one can receive food from a food bank. The Trussell Trust’s figures illustrate what is happening.

In a report published last month, the charity Save the Children referred to the fact that, under current policies, there will be an increase in the number of poor children. The Institute for Fiscal Studies predicts that, under existing policies, there will be a one third rise in child poverty by 2020. That should concern us all.

I was pleased and proud in December 1997 to support a national minimum wage, which was fiercely opposed by the Tories. So passionate was their denunciation of that policy, they gave every reason against it. That was an excellent and necessary measure, but we have to build on it and have a decent living wage. There is no reason why, in a prosperous society such as ours, millions of people should have to live in the circumstances I have described.

3.23 pm

John Hemming (Birmingham, Yardley) (LD): One always wonders whether the Opposition have actually learned anything while in opposition, and listening to the shadow Secretary of State gave some indication of whether they have or not. I have had some useful conversations recently with Lord Turnbull, who, as Cabinet Secretary, was the senior civil servant and, I would argue, has some understanding of how national fiscal policy operates. He kindly pointed out table 4.1 of the “Public Expenditure Statistical Analyses” to me, which shows that when Labour was in office, while there was an upswing, public expenditure increased as a proportion of GDP. If anyone is interested, I have put the figures on my web log, linked to a Google Docs analysis that demonstrates how Labour started over- spending.

Much though people on the continent, such as the President of France, may have taken the view that one can spend one’s way out of bankruptcy, after a period in office I think President Hollande concluded that actually one cannot spend one’s way out of bankruptcy—that the additional GDP from the spending does not give an adequate tax take.

That leaves us in a situation where we cannot change things rapidly. A very big deficit cannot be reduced to zero overnight, because of the economic disruption that that causes. The shadow Secretary of State complains that we have borrowed a lot of money, but we have done so because there was a big deficit. Every year, one borrows the amount of the deficit, which adds to the debt, and one cannot change that rapidly, either by putting up taxes or by cutting spending to bring the accounts back into balance, because the disruption from that causes additional problems. The fact that he complains about something that is obviously there on a simple, basic mathematical point shows that Labour has learned nothing.

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The hon. Gentleman’s refusals to clarify for me Labour’s plan to get rid of the intermediate apprenticeship is also symptomatic of a substantial problem. Scrutinising the Deregulation Bill, Opposition Members happily stood up and said, “Let’s get rid of the intermediate apprenticeship,” of which there are about half a million in this country; they did not think about the consequences for the people affected. Earlier, the hon. Gentleman gave a one-word answer on that subject and would not clarify, so one has to assume that the Opposition’s detailed policy remains the same: they do not want intermediate apprenticeships. Well, I do want intermediate apprenticeships; they are a good route into work.

There we have two basic examples in which it appears that the Opposition have learned nothing. In government, we are making progress and dealing with matters that require a long-term plan—we cannot do it based on a short-term plan—but there are issues to be worried about.

I worry about the statistical basis of poverty analysis. I see individual cases of people who are really struggling. I see people who have been wrongly sanctioned and, happily, at times I have been able to resolve the sanctions. There are problems with the system—it can have a knock-on effect on housing, which it should not have. I know that the Government are trying, through the universal credit system, to introduce a more supportive system, which is more about encouraging compliance than punishing people, but we are still operating the older system, which is causing problems.

Everyone who is on tax credits and at the bottom end of the market is included, but we have to remember that people who are not officially in poverty in other countries migrate here to enter our work and tax credits system. Should they be lumped in with the people who are having to attend food banks because they were wrongfully sanctioned? I do not think they should. When the statistics conflate those different circumstances—people who are coming to this country to participate on that basis and people who are really suffering—they make a mistake. We need to work as a Government to reduce the suffering that comes from, say, wrongful sanctions and to help people who are having great difficulty making ends meet, but we should not conflate the different circumstances. If we get the statistical analysis wrong, it is meaningless.

3.28 pm

Katy Clark (North Ayrshire and Arran) (Lab): Thank you, Madam Deputy Speaker, for giving me the opportunity to make a brief contribution to this debate.

This year’s Queen’s Speech is one that fails the people of North Ayrshire and Arran and fails the people of this country. The Secretary of State referred to the fact that there are only 11 Bills, but I do not take much comfort from that because I remember the last parliamentary Session. There were many pieces of legislation covering many matters, but there was little discussion or time given to enable this place to scrutinise effectively the range of measures that were forced through by the Government. When the Secretary of State referred to the small business Bill and the range of measures in it, my response was one of fear about what will exactly be in the Bill when we see it in its full glory.

The reality is that our country faces massive challenges. We face the massive challenge of responding to an economic crisis and to the austerity that is being imposed

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not only on the people of this country, but throughout Europe and the western world, yet there is little discussion of that in this place.

The Secretary of State spoke about statistics and referred—quite interestingly—to the 99%. He accepted that the vast majority of people in this country are paying the price of the economic crisis and he also conceded that the 1% are doing very nicely. Of course, that is not just the case in this country. As we look around, we see that it is the case throughout the western world, whether that is in Greece, Ireland, Portugal—it is true in any country that people choose to look at. The super-rich, those who are really in control of many of the decisions that affect most of our lives, are seeing their wealth and power increase, while most of us have been put in a position where our living standards have been squeezed by the economic crisis and the way politicians have responded to it.

I am pleased today to speak in favour of the amendment that has been tabled by the Opposition Front Bench team to bring forward measures to raise the minimum wage faster than average earnings. We know that the measures that this Government have introduced have led to a squeeze in the living standards of the vast majority of people in this country, and when proposals are put forward to try to address that situation—for example, the proposal of a price freeze for people’s energy bills, whether those are electricity or gas bills, which would obviously affect not only individuals but businesses—the Government react with horror. They also react with horror when it is suggested that we should do something to try to deal with the private rental market, even though in parts of the country rents are increasing at far higher rates than people’s incomes.

The reality is that since this Government took power, in all but two months real wages have failed to keep pace with inflation. Indeed, after the welcome real-terms increase in pay in March, there was another fall in April. As we know, the Living Wage Commission has highlighted that 21% of people in work in this country— 5.8 million people—receive less than the living wage. Therefore, the amendment that we are considering today clearly outlines the direction of travel we should be taking and we need to say that it is simply not acceptable that we continue to be a country where there is chronic low pay and where people are not paid a decent amount that they can afford to live on if they work full-time. That is not an acceptable way to organise ourselves in a civilised country.

The Government can put forward proposals that refer to welfare caps and fiscal responsibility, but until we put in place the measures that put the pounds into ordinary people’s pockets and give them the ability to make decisions for themselves and live in dignity, we will not address the real issues.

This Queen’s Speech fails the British people; I look forward to voting against it.

3.33 pm

Chloe Smith (Norwich North) (Con): Along with many hon. Members, I welcome the unemployment statistics released today. I note that in my own constituency unemployment has come down, both on the year and on the month, which is to be welcomed alongside the drops nationally in both the long-term unemployment rate and the youth unemployment rate.

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I also welcome the national insurance cut of £2,000 for businesses, which has contributed to businesses taking people on. I note of course that the Opposition have refused to say whether they would rule out reversing that change if they were in government.

In the Gracious Address, I particularly welcome the child care Bill, which will continue to make it possible for women to go into the workplace, and for men and women to share their child care responsibilities between them as they think best for their own circumstances.

I also welcome the small business Bill, which the Secretary of State spoke about earlier today. I particularly welcome measures in that Bill that support entrepreneurs. In a discussion that I had only yesterday, I came across an extremely interesting statistic. I understand that by the 2025 general election, for the first time since the second world war, the self-employed will outnumber public sector employees. That is not only extremely interesting electorally speaking but is, of course, exactly why we need to use a Bill such as the small business Bill to back entrepreneurs and all that they wish to do for themselves, their families and the jobs that they may create in the future.

Charlie Elphicke: A policy that I have been setting out before now is to have a really light-touch regime for the taxation and regulation of start-up businesses, whereby it will basically cost nothing whatever to set up a business. What does my hon. Friend think of that idea to drive entrepreneurship?

Chloe Smith: I strongly welcome that point and the Government could do well to examine my hon. Friend’s idea.

A subject that my hon. Friend and I have spoken about in the past is the other phenomenon that will happen by the 2025 general election. It is that generation Y —to talk in generational terms—will become a competitive part of the electorate compared with the baby boomers. Of course, I am talking about generation Y and all those who come behind them; I think that hon. Members will understand that concept.

I am not seeking to stir up any form of strife between generations; I do not think that would be productive. I mentioned jobs news and I wish to hail the work in my own constituency of the Norwich for Jobs campaign, which has brought about impressive results for young workers. However, I also wish to refer to the needs of older workers who will no doubt remain in the work force. I have met several 50-somethings in my constituency surgery to talk about exactly that issue.

In passing, I will say that I welcome the pensions Bill laid out in the Queen’s Speech, which will allow pensioners to have far more control and freedom over what they choose to do with their savings.

I will take a moment or two to talk about the way in which our politics and indeed our economy need to change, so as to adapt to generation Y and its needs in the coming years. The Queen’s Speech sets out a basis for that change.

Benjamin Disraeli spoke about there being two different planets and we might ask whether there are still two different planets. He spoke about rich and poor, but in fact the figures suggest that there is a gap between older voters and younger non-voters. That gap is an important one and it should concern us all.

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I hear some people say that generation Y—younger voters—will simply bounce into the same habits that previous younger generations may have had. However, three things have changed: when asked, this generation reports having less interest in traditional politics than others; it has less belief that voting is a civic duty; and it has less affiliation with parties. That all adds up to an existential change for British democracy. The UK is worse than other countries in this regard; it is indeed the sick man of Europe and it does not compare well with the US either. Young people vote less than their elders elsewhere, but Britain’s problem in this respect has got worse.

That should concern us, but it also gives us an opportunity. We can look at research by Demos, which shows that these younger people look to themselves to take action, and to businesses, charities and action groups to achieve things in their chosen community. Indeed, the state comes a long way down that list. Generation Y, like any other group, backs its own values and aspirations. I want politics in Britain to work for the members of that generation and I want the principles of the small state, responsible economics, freedom, enterprise and social liberalism to come through for them.

First-time voters in 2015 may have an aversion to formal, professional politics, but they are interested in community affairs and they are doing great things in their communities. What are the right things that the Government should do to respond? They should focus on the economy, on education and indeed on those major intergenerational issues that I have mentioned. The Conservatives in government have a good record in that regard: honesty in public finances; more jobs, and a plan to go further with the tax cut in April 2015 for businesses employing under-21s; house building; reform of welfare; and the ambitious work at the Cabinet Office to make public services work for people. We have this record that we can be proud of; we should aspire to do more; and the Conservative party can be this party for the future. The Queen’s Speech delivers results. People should judge us on those results and young people can do the same.

3.39 pm

Dr Eilidh Whiteford (Banff and Buchan) (SNP): There are few issues of more primary importance to our constituents’ lives and our wider economic health than jobs and work. After the deepest recession for a century, the economy, however tentatively, is improving. The news today of another fall in unemployment should be welcomed across the House. I am especially pleased to see the highest level of women’s employment in Scotland since records began. I am also pleased to note a further fall in unemployment in Banff and Buchan.

Nevertheless, employment is still not back to its pre-recession levels. We should all be concerned about some of the significant challenges lurking beneath the surface figures. The first of these is youth unemployment, which remains unacceptably high. I came of age in the 1980s, when mass unemployment left a generation of school leavers languishing on the dole. I remember how that was not only soul destroying for the individuals affected, but destructive of our whole social fabric. Unfortunately, I see the same mistakes and oversights

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being repeated before our eyes. Youth unemployment is still around 18% across the UK. The economy is recovering and employment is growing in the wider labour market, but young people are not seeing the benefits.

The scale of the problem and its potentially long-term consequences should shake the Government out of any sense of complacency. In Scotland, the modern apprenticeships scheme has meant that 77,000 new apprentices have had an opportunity over the past three years, and the follow-up shows that 92% of them remain in work six months after completion, the vast majority of it full-time. Additionally, the opportunities for all scheme has offered a training position, a work placement or an educational place for every single 16 to 19-year-old in Scotland.

However, from 2014 a new programme of EU funds becomes available to enable member states to deliver a youth guarantee that would offer those opportunities to any young person up to the age of 24. These additional resources would enable the extension of the opportunities for all scheme to other young adults. I would be keen to know what use the Government intend to make of that funding so that all our young citizens can benefit from the EU youth guarantee.

It is clear, however, that we still have an awful lot of work to do. The interim report of the Commission for Developing Scotland’s Young Workforce, chaired by Sir Ian Wood, highlighted the need for schools, colleges and employers to work much more closely together to equip young people for the workplace and to ensure that vocational education meets their needs and those of the labour market. The report also highlighted the need to tackle inequalities, whether the barriers faced by disabled youngsters and minority ethnic groups or the chronic cross-cutting inequality associated with occupational gender segregation.

In my constituency I have seen a lot of good practice, for example in the North East Scotland college in Fraserburgh, which is working with local employers and schools to create pathways for young people into work. Only a couple of weeks ago I presented prizes to pupils from Mintlaw academy who won this year’s Technology Challenge, a competition run by the college, sponsored by several energy and manufacturing companies and involving second-year pupils from schools across northern Aberdeenshire. The competition is a model of good practice because it involves all the pupils in the early years of secondary school, before they make their subject choices, with a view to making them aware of the excellent career opportunities open to those with qualifications in science, technology, engineering and maths. Importantly, the competition insists on the equal participation of girls.

That leads me neatly on to the other key issue I want to address today: the persistent gap between male and female earnings, even 40 years after the Equal Pay Act 1970. Occupational gender segregation continues to be a problem, and too many women are in low-paid, part-time or insecure work. I do not think that anyone would pretend that these problems are easy to resolve, but I would like to have seen the Government attempt to make more headway. As I have said before in the House, the austerity measures of the past few years have fallen wholly disproportionately on women, to a large extent because women are more likely to have caring roles, to be in part-time or low-paid work and to be in receipt of tax credits.

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The availability of affordable child care is an acute issue for parents combining work with family life, but we have seen only this week how parents are falling foul of the Department for Work and Pensions’ new sanctions regime, which is making it impossible for some parents to meet their family commitments. This is carers week and it is also important to acknowledge the role that carers play in providing social care and the impact that has on their employment prospects.

It has become a truism of political discourse to say that work is the route out of poverty—indeed, the Prime Minister said it twice this afternoon. Of course, at the most obvious level, well-paid, full-time work is a route out of poverty, but over recent decades rapidly increasing wage inequality has meant the rise of the working poor. For those in minimum-wage jobs who are unable to secure full-time hours, in-work poverty has become a new reality. We are in a situation in which a family with two children, paying average rent, with both parents working full time in low-paid jobs, will be a family on the breadline. If the minimum wage had kept pace with inflation, those in the lowest paid jobs would be over £600 a year better off. We need to acknowledge that the minimum wage is no longer a living wage and that it needs to catch up with the cost of living.

Meeting these substantial challenges requires strategic interventions and a willingness to try innovative approaches, so I am disappointed that the Gracious Speech failed to address youth unemployment—

Madam Deputy Speaker (Dawn Primarolo): Order.

3.44 pm

Margot James (Stourbridge) (Con): I am delighted to have the opportunity to speak in support of the Queen’s Speech, which contains several measures that will impact positively on employment. The Gracious Speech builds on a record of achievement: the deficit will be cut by 50% this year; unemployment is down from the 8.4% that the Government inherited to 6.6%, as announced today; and our economy is growing faster than that of any other country in the G7 and across the European Union. Unsurprisingly, business and consumer confidence has returned.

There have been difficult decisions and people have made many sacrifices to bring about this economic turnaround: people working in the public sector have endured pay freezes or redundancies; people relying on savings have endured low interests rates that have been vital to the recovery; and many private sector employees have voted to take a salary cut, to safeguard employment among the wider group. Let their sacrifices not have been in vain. We on the Government side of the House, as evidenced in the Queen’s Speech, will work hard to ensure that there is no return to boom and bust or to tax and spend, when “more of” was the answer to every question and every challenge.

Earlier this week, I hosted a reception in Parliament for the Federation of Small Businesses. This year is its 40th anniversary. I am proud to represent so many specialist manufacturing companies in Stourbridge, particularly in Quarry Bank, Lye and Cradley. Most of them are family firms that have excellent employee relations, but their main concern is that their employees are ageing and they will have to replace that skilled work force.

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I run a programme in my constituency to encourage young people to broaden their career horizons. I lay on university, apprenticeship and career events, and I always aim to get across the opportunities in engineering and manufacturing. Employment in the manufacturing sector declined from 5.7 million to 4.3 million between 1981 and 1996, and then it plummeted by 2.5 million up to 2011. Finally, after 30 years of continuous decline, the number of people employed in manufacturing is on the increase again, up by almost 100,000 since 2011. That is proof that the strategy of rebalancing the economy towards manufacturing and regions outside the south-east is working.

The problem for the sector is the image of manufacturing and engineering in the minds of so many young people, especially girls. That has been a problem for most of my life; it is nothing new. What is new is the opportunity in the sector. I have mentioned the growth in jobs, but output is also buoyant, with growth of over 4.4% in the past 12 months. Technological advances, innovation and export opportunities make for a very different working environment from the machine tool business that my father ran in Wolverhampton during the 1970s. We have a shortfall of 40,000 engineers every year. Several Members have mentioned women in the workplace. Fewer than one in 10 engineers is a woman. If we could treble the number studying science, technology, engineering and maths, we could really address the skills shortage.

Today’s news on employment is an excellent platform from which the measures in the Queen’s Speech can impact even more on people’s employment opportunities. I hope that with the help of businesses, schools and colleges, we can transform the image of manufacturing and engineering and attract the talent that the sector needs further to boost the economy and add to the great work that it has been doing over the past few years.

3.49 pm

Austin Mitchell (Great Grimsby) (Lab): I absolutely agree with the measures proposed by my hon. Friend the Member for Streatham (Mr Umunna) in his opening speech. I say that not just to dissipate the impression of disloyalty that I might have created by an article in the Daily Mail this morning, but because those measures will restore what we desperately need in this country—more stability in the labour market. We have had a long period in which wages have increased by less than inflation in 46 of the past 47 months of statistics since the coalition came to office. That has to be ended, because it is creating a very undesirable kind of society. It is the kind of society described by Professor Piketty—or I should say, because he is French, Professor Piketté—in his book, “Capital”.

Mr Tobias Ellwood (Bournemouth East) (Con): On a point of order, Madam Deputy Speaker.

Madam Deputy Speaker (Dawn Primarolo): I hope that it is, Mr Ellwood.

Mr Ellwood: I know that time stands still when the hon. Gentleman speaks, Madam Deputy Speaker, but the clock does not seem to be moving, and I wonder whether it is possible to make sure that the time limit is placed on it.

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Madam Deputy Speaker: That absolutely is a point of order, Mr Ellwood, and I am very grateful to you. The clock has to be operated manually at the moment, so we will do our best to make sure that it works.

Austin Mitchell: If it is any consolation, Madam Deputy Speaker, my clock stopped in 1979. I hope that that qualifies me for an extension of my speaking time.

This kind of society where wealth accumulates and wages and salaries fall as a share of GDP is very undesirable. As Goldsmith put it,

“wealth accumulates, and men decay”.

And it is an economically inefficient society, because purchasing power and stimulus to the economy, then growth, come from the purchasing power of the masses, not the classes. If we are transferring more money to the classes, we will have a slow-growing, stagnant economy. Under the policy pursued by this Government, the only real long-term plan is to slash public spending, benefits and the living standards of the working classes, to transfer money to tax cuts for the rich. The theory is that this will stimulate enterprise and money will trickle down to the poor and the working class, in the same way that the trickle-down effect of horses improves roads. That is the plan, and it is a disastrous development for our economy.

I agree with the proposed measures on raising the minimum wage, promoting the living wage and improving skills, but other measures need to be taken as well. The only real solution to the problem is economic growth to put the people back to work, because full employment is the only adequate form of social security that we have ever developed in this country. That means, first, a massive house-building programme, particularly one of public housing for rent that people can move into, because most people now cannot afford a mortgage and could not get one if they tried. That could be financed by municipal bonds or quantitative easing. Why should the money from quantitative easing—which is, in effect, the Bank of England printing money—all go into the vaults of the banks? Why should it not be used to finance contracts for massive public spending and investment in work on new towns, for instance, provided that there are proper contracts and a proper rate of return? We should use quantitative easing to improve public spending.

Caroline Dinenage (Gosport) (Con) rose—

Austin Mitchell: I am not giving way—I am sorry. I am having my time extended as an incentive to carry on next year.

Secondly, we should expand public spending generally. What is the problem with borrowing? In a recession, we need to borrow to stimulate the economy. Keynesian economics still works. Why are we so reticent about borrowing more to spend, to stimulate growth? Only in a growth situation can we pay back the debt.

Thirdly, we should boost exports by getting the pound down to a more competitive level. It has risen by nearly 10% in the past few months, and it needs to be more competitive if our exports are to be stimulated.

We need to take all those measures to expand the real economy as well as the measures to deal with the labour market that we are discussing. I appeal to the Government

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to get rid of their restrictive attitude and start thinking about expansion. I ask my Front Benchers to be less cautious and timorous about capital. Let us expand, grow, and get the people back to work.

3.54 pm

Mr Robin Walker (Worcester) (Con): It is a pleasure to follow such a passionate speech by the hon. Member for Great Grimsby (Austin Mitchell). I share his passion for full employment. It is a pleasure to speak on the day the claimant count in Worcester is more than 1,000 fewer than it was at the time of the general election and youth unemployment has halved since its peak under Labour in 2009. As a result of raising the tax threshold, more of those people who have found work will keep more of the money they earn, which we should all celebrate.

As a member of the Business, Innovation and Skills Committee—I very much enjoyed my Chairman’s speech earlier on apprenticeships and pubs, which are two areas on which we are making progress—I am delighted that jobs and work are at the heart of the Gracious Speech and particularly welcome the small business Bill. Small businesses are the lifeblood of our economy, and it is to the credit of this coalition Government that we have seen increasing numbers of businesses starting up, employing and expanding. Worcester has a very lively small business community, and one of my greatest pleasures as its MP has been to visit some of the entrepreneurial businesses starting up and then see them grow and take on jobs and apprentices.

It has been right to reduce the tax burden on small businesses as well as on the people who work in them, and the Gracious Speech commits us to continue to do that by talking about the need to

“cut taxes in order to increase people’s financial security.”

Caroline Dinenage: My hon. Friend is an outstanding member of the BIS Committee. Does he agree that, contrary to what the hon. Member for Great Grimsby (Austin Mitchell) has said—when he said that his clock stopped in ’79, I thought he meant 1479—the one thing we need to do to get businesses employing and growing is not to print more money, but to trust them, tax them less and cripple them less with bureaucracy, unlike the previous Government, who between 2007 and 2008 imposed more bureaucracy costing £10 billion?

Mr Walker: I could not agree more with my hon. Friend, who has been a truly outstanding member of the Committee. We will miss her if she goes on to greater things.

One of the ways in which we have removed a burden from small businesses and the people who work for them is by freezing fuel duty not just once, but throughout this Parliament. My hon. Friend the Member for Harlow (Robert Halfon) has campaigned very hard to achieve that and I congratulate him on his success.

In this Parliament, I am very proud to have supported the scrapping of Labour’s jobs tax, the introduction of the employment allowance and the extension of doubled small business rates relief. The Gracious Speech takes forward that legacy, but business rates are one area on which I would have been keen to see the Government go further. I warmly welcome the decisions taken in last year’s autumn statement to provide extra discounts to

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small retail businesses and to initiate a consultation on how the valuation office and appeals system could be improved. However, our Committee recently concluded in its excellent report on the retail sector that fundamental reform was needed:

“Clear, decisive action needs to be taken. If there is one thing that this Report urges the Government to do, it is to reform Business Rates. For retail, and other enterprises, to continue on the High Street, the Business Rates system must be addressed urgently.”

Such reform should make the system more responsive, allow for more regular revaluations, faster appeals, incentives for growing businesses that create jobs and reduce the unfair burden borne by the retail sector.

Although I regret the omission of a business rates reform Bill from the Gracious Speech, I welcome the inclusion of a number of other business-friendly Bills, particularly the small business Bill, which the Federation of Small Businesses nationally and—perhaps more importantly to me—in Worcestershire has warmly welcomed. John Allan, the national chairman of the FSB, has said:

“This landmark Bill will…be welcomed by our members.”

Local businesses have told me that they would particularly welcome measures to encourage prompt payment and a tightening up of what has so far been largely a voluntary code. I have taken evidence as part of cross-party work on some of the problems with late payment that affect many small businesses, and there are sectors, including construction, where not just encouraging but mandating better behaviour would make a massive difference.

Local businesses will also welcome an even greater focus on helping small businesses to access finance. It is good news that the Government should be ensuring that banks automatically pass on customers to alternative lenders when they are turned down for credit. That should encourage the growth of crowdfunding and support the development of community development financial institutions, such as Impetus, which helps many companies in Worcestershire.

Procurement is certainly an area in which the Government can do more to help small businesses. I am delighted that since 2009-10, the value of Government procurement to small and medium-sized enterprises has risen by almost 50% to £4.5 billion, but there is much further to go. That figure is still only just more than 10% of overall public procurement, or 19% if we include the supply chain. This Government have rightly set out to make the figure at least a quarter. Other countries, such as Germany and the US, seem to be able to support a higher proportion of Government procurement from SMEs, and we must do all we can to learn from their example.

This legislative programme also sets out to do something that previous Governments failed to do and that too many small businesses feel they have had to police for themselves, which is toughen up enforcement of the minimum wage. I am proud that this Government have decided to increase the minimum wage above inflation and that they have done so in a way that has kept the support of the business community, but I am also determined that the disreputable minority who flout the rules do not benefit from doing so. Most companies I speak to want to do the right thing, but they expect to be able to compete fairly by doing so, and not to be undercut.

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Yesterday, members of the Business, Innovation and Skills Committee met some Members of the German Bundestag to discuss their debate about introducing a national minimum wage. One suggestion to come out of that discussion was that enforcement could be linked to Government procurement, with any company proved to have failed to pay the minimum wage named and shamed by the Government and barred from winning Government contracts. I hope that my right hon. Friends on the Front Bench will consider doing that.

Similarly, I am pleased that this Government, unlike their predecessor, are taking real action on zero-hours contracts. It is good news that the majority of jobs created have been full-time ones. Yet where there has been growth in zero-hours contracts, that matter has been taken seriously by the Government, and legislation affecting this area will be introduced.

In dealing with fairness, we need to continue this Parliament’s valuable work to limit the cost of, and to regulate, high-cost credit. I was pleased to welcome the Chancellor’s actions on this in the Budget. I recently attended meetings with the Church of England and the Financial Conduct Authority, which, in their different ways, are taking forward their respective duties. I want to see further progress on real-time data sharing across the industry and more support for the free debt advice sector, with the cap—when it comes—set at a level that will alleviate the many problems that high-cost credit can cause. I was honoured, alongside my Select Committee colleague, the hon. Member for Sheffield Central (Paul Blomfield), to be named the Citizens Advice parliamentarian of the year for my work on this front, but there is still more to be done.

I welcome this Queen’s Speech and its measures to create greater prosperity and more jobs in this country. I hope that those measures will have their full effect in Worcester, and I look forward to fighting Worcester’s corner in the year ahead.

4.1 pm

Mr William Bain (Glasgow North East) (Lab): Like many right hon. and hon. Members, I have been troubled, particularly in the past few months, by the growing disconnect between the politics in this House or the constitutional politics of the referendum in Scotland and the real-life experiences of our constituents. With wage growth yet to take hold in any sustained way after the longest period of falling real wages in our history, and with productivity remaining weak and investment low, it is no wonder that claims made by Ministers in this House about a recovery for all count for so little with real Britain.

This Queen’s Speech was this Government’s last opportunity to deal with the huge underlying problems in our society that mean, as the Minister without Portfolio, the right hon. and learned Member for Rushcliffe (Mr Clarke), admitted in a rare bout of candour from this Government, that ordinary people are not experiencing any kind of recovery in their living standards. The failure of this Government over the four Queen’s Speeches of this Parliament will make even worse the sense of alienation that people feel in communities up and down this country.