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§ Mr. David Watts (St. Helens, North)
I am delighted to have the opportunity to raise this important issue on behalf of my constituents and, I believe, thousands of low-paid workers throughout Britain. I have attempted to secure the debate for nine weeks, and I am grateful to the Speaker's Office for allowing me to take a slot that became available due to a cancellation late last week. I apologise because I am full of cold at the moment, so if I break into a coughing fit, please excuse me.
I do not wish to undermine the Labour Governments' great economic achievements since 1997. We have one of the most successful economies in the world, and it would be foolhardy to do so. I am sure that the Chancellor and the Government would not allow me to do that even if I wished. However, it is possible to have both a strong economy and a flexible work force while having good working conditions without exploitation. I hope to convince the Minister that the present balance is wrong and that further attention to legislation is required.
We need stronger employment rights and regulations to protect the most vulnerable members of our communities. The Government are justly proud of their economic performance. We have the lowest levels of unemployment for 30 years and historically low rates of interest and inflation, and we have experienced sustainable growth for five years. Most workers have enjoyed the benefits of our strong economy. They have received increased pay and longer holidays, and experienced better working conditions. Good indicators of the benefits derived from a strong economy include record car sales, more people taking foreign holidays, house prices and restaurant trade.
However, not all workers have enjoyed the same benefits from our strong economy. I accept immediately that the introduction of the minimum wage and the working families tax credit, in addition to four weeks' holiday entitlement for all employees, have gone a long way towards improving the conditions of some of the lowest paid workers in our country. However, such measures offer only basic employment rights. In my view, British workers are still the poor men of Europe and too many British workers are paid poverty wages. They work long hours in poor working conditions and they enjoy little employment protection.
About three months ago, a constituent contacted me about bank holidays. I ran a story in the local press, and I was amazed to be contacted by several of my constituents, who were mostly such employees as security staff, hairdressers and warehouse men. Nevertheless, several middle managers and management graduates raised issues that affected the way in which they worked and the conditions under which they worked.
We hear much about the need for flexibility, and although a modern nation must have a flexible work force, that should not be used as a guise to undermine basic trade union and employment protection. Examples of exploitation that I shall outline relate to bank holidays. I was amazed to learn from a constituent that we are not automatically entitled to bank holidays. Unlike the rest of Europe, we must negotiate them with our employers. I spoke to several of my colleagues in 227WH Parliament who were equally amazed by that. It is not well known that workers are not automatically entitled to bank holidays with pay, and my colleagues were shocked that that is the case in a modern Britain.
I was also amazed to find out that workers are often asked to take the four weeks' holiday to which they are now entitled at inappropriate times. I was told about an employer who forced his employees to take their time off in January and February. The argument was that the company had few orders during that period, and it was more convenient for the employer if employees took time off then. That meant that a married man with a family had no holiday entitlement in the summer, so while everyone else was going off on their summer holidays, that gentleman and his family were not able to do so, as he had no control over when he could take his holidays. There was no mutually agreed system; employees had to take holidays when the employer wanted them to.
§ Mr. David Laws (Yeovil)
I congratulate the hon. Gentleman on raising this important issue. Is he aware that many of my constituents were obliged to work on the recent jubilee bank holiday, or else come in on the previous Saturday to make up for it? Does he agree that that is absurd in this day and age?
§ Mr. Watts
The hon. Gentleman makes an important point. I intended to come to that subject at some stage, but he has highlighted the problem.
I found that many people are asked to work unpaid hours. As I come from a trade union background, I did not think that that was acceptable, but several of my constituents tell me that their employers insist that they work extra hours without pay, and they do not even get time off in lieu. The Employment Bill has just come before Parliament, and one of the issues that I ask the Minister to address in it is enforcement. It may be illegal—I think that it probably is—to make people work unpaid hours and not give them time off in lieu, but many people, including middle managers and those in their first graduate jobs, are forced to work extra hours.
I am told that a 50-hour week is not unheard of for those in the retail business who have signed contracts to work 38 hours a week. Those who have come to see me tell me that if they were to try to enforce their employment rights, they would not last two minutes, and they would lack protection. Those people are not in trade unions. As a rule, they will accept overtime without pay.
The use of agency staff is a worry for many people throughout the country. Increasingly, it is the practice for many employers to replace those on permanent contracts with agency staff. Once again, the Employment Bill deals with that, but I should be interested to know what enforcement powers the Government will have.
Finally, I shall mention the way in which many employees are kept in the dark about consultation with their companies. Employees often find themselves made redundant willy-nilly. They do not have any warning, and are not allowed to consider the issues and negotiate 228WH with their employers to discuss solutions other than closure or job losses. I understand that that issue, too, is addressed in the Employment Bill. It is crucial that the Government act to protect groups of workers who are Vulnerable, and who have no trade union power or skills that would allow them to negotiate good pay and decent conditions of employment.
In addition to the issue of unpaid bank holidays, there is the fact that we are badly treated as far as such holidays are concerned. Germany has 10 to 14 bank holidays, France has 11, Belgium has 10, and Spain and Portugal have 14, but British workers are not automatically entitled to any bank holidays. The number of bank holidays and the protection given to employees as regards payment for them are issues that need to be addressed.
Employment protection needs a serious second look. I know that the Government have done a great deal and I do not want to desecrate the great work that they have done, but without good employment regulation, many of my constituents feel as though they are economic slaves, and that they have no power to influence the decisions of their employer. They believe that they are exploited and abused, and feel that they have little option but to accept the boss's offer, which is often made on a take it or leave it basis. Macho management is still alive and kicking in the United Kingdom. It is not unusual for many of my constituents to be bullied by their employers. People who come from an area of high unemployment are hardly likely to stand up to their bosses if they lose their jobs and cannot find another.
I know that people believe that regulation should not be extended. We often hear the argument that it is anti-competitive, that there are too many Government controls and too much bureaucracy, but such views should be ignored. Frankly, the people who make such claims would not accept the employment conditions faced by many of my constituents. Such people would not accept that they could not take bank holidays off, or poor pay and bad conditions. We should not take any notice of people who set double standards—they want Fetter rights for themselves and their families but not for other people.
It is clear that the present relationship between employer and employee is unbalanced. Without trade union membership or skills, it is difficult for people in my constituency to negotiate decent working conditions. I recommend that people join trade unions. It is interesting that, on average, trade union members get six more bank holidays than workers who are not in trade unions. Once again, there is a benefit in joining a trade union. However, the people that I am talking about are often not in trade unions. They work in small companies where they are easily abused and not given the right wages and conditions.
In many areas in the north-west with high levels of unemployment, there are still some very poor employers. In such cases, the Government should do what they can to protect the workers involved. The Government have made an excellent start with the Employment Bill, but much more must be done to bring about the level of employment protection enjoyed by our European partners. I ask the Government to build on what they have achieved so far. I note—as I have on three occasions now—the benefits that will derive from the new Employment Bill, but there is now a greater 229WH need to protect vulnerable workers. The Government have done a great deal on family-friendly policies, but it is not family friendly to be poorly paid, unable to take bank holidays or told to take holidays at inappropriate times.
On the subject of bank holidays, the hon. Member for Yeovil (Mr. Laws) mentioned the jubilee. Some months ago, I was contacted by a constituent whose employer had told him that he would not be paid if he took the jubilee bank holiday off. He described that as like being invited to a party but being told, "Bring your own beer and sandwiches." When the Government announced the jubilee bank holiday, most people thought that they would be able to take part in the celebrations. Sadly, that was not always the case. I hope that when such events take place in the future, people will be able to enjoy the benefits of good bank holidays, pay and conditions.
I hope that the Minister will take my comments on board and address some of the important issue's affecting many of my constituents.
§ The Minister for Employment Relations, Industry and the Regions (Alan Johnson)
It is a delight to serve under your chairmanship for the first time, Mr. Hurst. I congratulate my hon. Friend the Member for St. Helens. North (Mr. Watts)—who is with us courtesy of Nurofen—on raising the issue of bank holidays. He has consistently raised and championed this issue, and if the day ever comes when we do provide statutory pay for bank holidays, we should call it Watts payments day in recognition of his efforts.
The gist of the argument was put by my hon. Friend, but I approach it from a different perspective. We cannot isolate the issue of bank holidays from all the other protections being provided for workers in this country. He mentioned that, despite our good record, we were the poor relation in Europe. I do not agree with that description. It is true that every country in the European Union pays for some bank holidays, but not all. For example, France does not have statutory provision for payment for all its bank holidays, and if we look more widely at non-European Union G7 countries, we find the same picture.
The question in the United Kingdom is where we set the priorities. My hon. Friend, when making the argument that we are the poor relation in Europe—a notion that I hope to disabuse him of in my contribution—also mentioned that he is a trade unionist. Like me, he will recall that unlike every other European Union country, the trade union movement in this country opposed right up until the 1980s the implementation of minimum standards through the law It opposed a national minimum wage, concepts such as the working time directive and the right to paid holidays. Like me, he will remember that, when we wore our flares and tank tops, the argument in the UK trade union movement was that those matters should be settled through free collective bargaining, that there should be no state interference in them and that civil rights at work came with the union card.
I make those points because we must put this matter in context. It is true that when we came into power in 1997 there were more bank holidays in the rest of the 230WH European Union than in the UK, and that more of them were paid. However, we also had then no national minimum wage and no entitlement to paid holidays or a union recognition procedure. In many areas, there was no protection. It was then, as now, questionable whether bank holidays should be placed further up our list of priorities.
My hon. Friend mentioned the Employment Bill. I am delighted to announce that that is now the Employment Act as it received Royal Assent at 10.25 pm last night. That will affect some of the points that my hon. Friend raised about his constituents. The Employment Act will affect individuals who felt unable to raise those grievances in the workplace, because it insists that every workplace in the country, irrespective of how many people it employs, whether that is one or 1,000, must have a statutory grievance and discipline procedure as part of the protection available.
It is illegal for workers to receive no money for extra hours, not just in civil law but in criminal law because it breaches the national minimum wage. We have not only set a national minimum wage and uprated it this morning by statutory instrument, but set up a helpline whereby the Inland Revenue—which strikes fear into the hearts of everyone, not only employers, and has cruel arid unusual punishments—will pursue a case such as that described by my hon. Friend, without the employee having to approach the employer at all. Employees can ring the helpline and the rest is done for them. We have found that compliance with the national minimum wage has increased dramatically from its early days, April 1999.
As well as providing the protection for constituents that my hon. Friend mentioned, we are now ahead of most countries in Europe—in the top three—on paid maternity leave. We have uprated statutory maternity pay by 60 per cent., the largest increase since 1948.
§ Mr. Watts
My hon. Friend says that if someone is being asked to work longer hours than stated in their contract, they can take action by reporting that to the Inland Revenue. I want to be clear about something. If a contract says, as I understand that they often do, that someone is required to work 38 hours a week but will have to be flexible, does that element of flexibility include that person being asked to work long beyond the 38 hours? How would that be enforced? What kind of contractual arrangements deal with that, bearing in mind that we are often dealing with people who are unorganised, who are not in trade unions and who have little individual power?
§ Alan Johnson
I was referring to people being asked to work far no hourly rate, for nothing. Yes, there can be flexibility of hours, but there are no circumstances that I am aware of in which anyone can be asked to work those hours for no remuneration whatever.
I shall check on the other points that my hon. Friend made, and perhaps write to him about the protection on hours. We have, of course, an opt-out from the working time directive, and we are the only country in the European Union to do so, but the onus is on the individual; if they wish to work more than 48 hours, they can sign the opt-out. Protection does exist, and the introduction of the Employment Act 2002 means that 231WH we are well ahead of Europe on matters such as the right to be accompanied; any worker for any size of company in this country can be accompanied by a trade unionist, whether their union is recognised or not, at any discipline or grievance case. That is not mirrored elsewhere in Europe. We are well ahead of the game.
We are also introducing statutory paternity pay and paid adoption leave for the first time. Other measures include the extension of union learning representatives, and the right to paid time off and facilities. My hon. Friend said that we are the poor relation in Europe, but he should consider where we stand following five years of various pieces of employment legislation and now the Employment Act.
My hon. Friend said that people were not informed and consulted. I remember a particular case in his constituency that he came to see me about, which is now being addressed with the implementation of the information and consultation directive. In response to the idea that we are the poor relation in Europe, I say that over the next few years workers will have the right not only to a discipline and grievance procedure in their workplace, to a minimum wage, to paid holidays, to be accompanied, and to various other measures, but to request flexible working if they are the mother or father of a child up to six years old.
The workplace up to 2010—the measures will be introduced at various stages—will be very different. We will outlaw discrimination on grounds of age, sexual orientation, religion and disability.
§ Mr. Alan Hurst (in the Chair)
Order. I am sure that the Minister is aware that he is covering a broad sweep. The subject under debate is bank holiday pay.
§ Alan Johnson
Absolutely, Mr. Hurst. I accept that it is a broad sweep, but I am replying to the allegation that we are the poor relation in Europe.
The first question is where we place our priorities. Secondly, we must consider the cost that businesses, particularly small businesses, would be asked to bear as a result of the measures. Many businesses complain about an incremental stacking up of costs. We have sought to introduce the measures in a way that takes businesses with us into the brave new world of minimum employment standards in the workplace.
§ Mr. Watts
My hon. Friend makes the point that some employers would object to the introduction of statutory paid bank holidays. I have been in contact with small employers who very much resent the fact that those whom they regard as poor employers are competing alongside them without providing decent conditions, pay or holiday entitlement. Does he agree that that can have an anti-competitive effect?
§ Alan Johnson
I do agree. I am not saying that the concerns expressed by my hon. Friend are not legitimate or pertinent. We estimate that about 17 per cent. of full-time and part-time workers are not paid for bank holidays, so 83 per cent. are paid. As my hon. Friend knows, the Bank Holidays Act 1871 has remained virtually unchanged. It was revoked and reintroduced in 232WH 1971, but for 131 years of our history the situation has been has it is now: bank holidays, whether paid or not, are a contractual matter between employee and employer.
§ Mr. Laws
Does the Minister agree that now would be a good time to review people's entitlement to bank holidays? Does he not understand that many people find it surprising that a Labour Government could defend a situation in which the worst employers can exploit some of the most vulnerable employees in the labour market?
§ Alan Johnson
I hope to answer the point about this being a good time when I come to my feeble peroration.
Labour Governments under Ramsay MacDonald, Clement Attlee, Harold Wilson and Jim Callaghan did not address such issues in any way. They did not introduce a national minimum wage or a right to four weeks' paid holiday, whereas this Government have.
We have not as yet addressed the important points raised about bank holidays, which have a 131-year history. The cost of the Employment Act 2002, as Opposition Members pointed out during its passage, is considerable, and my hon. Friend talked about not just paying for bank holidays, but increasing their number. A TUC paper in August 2001 suggested that we increase the number of bank holidays by three. Taken together, hat would mean a cost to business of £6.5 billion a year.
I do not think that there would be any disagreement between us on the fact that many workers have to work on bank holidays, whether they are in the health service, in transport or, increasingly, in tourism, when we as consumers insist that there are facilities for us on bank holidays and where most of the costs fall on small businesses that are seeking to recover after foot and mouth disease.
We have to consider the question proportionately in terms of where the cost would fall and where it would stand in our priorities. We are probably a rather curmudgeonly and miserable nation in the days that we allow for celebrations, but in the rest of the EU the bank holidays exist for a reason. They were not just created because someone in France said, "We have two fewer bank holidays than in Germany—let's create a couple." Days such as Bastille day exist for historical reasons. The last time that happened was when a Labour Government introduced the May day bank holiday. There has to be a reason for the nation to celebrate; I do not think that one can manufacture a reason for a bank holiday, although we have done so, most recently for the Queen's golden jubilee, and we did so for the royal wedding in 1981, and there have been a couple of other occasions where there have been one-off bank holidays.
We estimate that it would cost £500 million if existing bank holidays were paid, given that we are talking only about 17 per cent. of the work force, but that is in the context of all the other changes that we are making. There is bound to be a cost for information and consultation, tackling age discrimination in the workplace, the worker versus employer argument that we are consulting on at the moment and all the other measures that we have in our exciting and rather full agenda during the next few years. Would we make this matter a priority in that debate?
§ Mr. Watts
Many of my constituents would say that many measures that we have introduced are aimed at 233WH people who are well organised, from the middle classes and who can afford to represent themselves. We are not addressing the basic, fundamental conditions of employment, such as bank holidays and time off. There is a view that our priorities are wrong, and we need to refocus on some of those issues.
§ Alan Johnson
I accept that, from the correspondence that I have received from my hon. Friend and others, this may be becoming a higher priority for workers and constituents. I think that he would accept that it was not the highest priority in 1997. We are still only five years into this brave new world.
We have a practical consideration. We have to consider those people who have to work on bank holidays and what they would be paid. Would it be a day in lieu? Would it be one of the things that I used to negotiate as a trade union leader: time and a half and a day off, or double time and a half? That creates practical problems. Generally, the most positive thing that I can say is that I would not rule out a review on the status and structure of bank holidays in the future. It is not an issue that is at the forefront of our employment legislative programme, but it is important, and one that we shall look at perhaps in our third or fourth term of government.