Contribution
My Lords, I rise to move Amendment 2. I apologise to noble Lords if anything in my moving of this amendment is maladroit or otherwise at fault: it is the first time I have moved an amendment, let alone a group of amendments.
Why am I suggesting that new Section 27BA be removed in its entirety? The primary reason is the onerous inflexibility that it imposes on employers, the creators of jobs. The Bill as it stands, in theory, works even for those key groups who, as has been reported widely, much prefer flexibility in their employment arrangements—to take just a few examples: students, working mothers, part-time creatives and casual workers of all stripes. It is acceptable to them because they do not have to accept the guaranteed hours that the employer is required to offer them. To them and other groups of workers, some of whom may indeed prefer to be offered guaranteed hours, the employers will be required to offer those guarantees, but, once the offer is made, the employees can accept them or not. Thus, this new section creates considerable additional flexibility on the demand side. Many people looking for jobs will find those jobs more attractive.
On the supply side, however, flexibility is enormously reduced, to be replaced by stark uncertainty for all employers, particularly for sectors such as the NHS, hospitality, retail, care work, the gig economy, delivery driving, Christmas work, warehouse work and so many more. The absolute importance of flexibility to the employer can hardly be better illustrated than in the reports on the Guido Fawkes website as to how unions and the Labour Party itself have happily offered zero-hour contracts in the past.
At Second Reading, I stated that this Bill in general will kill business across the country, serving to shrink rather than grow the economy. This unfortunate section is just one part of that but an important one. In general, as I have just discussed, on the demand side, the removal of significant elements of flexibility creates distortions in the employment market, leading to employers, in many cases, being far more reluctant to offer employment. In consequence, the level of employment will fall, not increase. For smaller businesses, just creating the offers required by this section in the first place will involve onerous costs in time and money, making the employer highly reluctant even to start the process of seeking new employees. Some of the subsections in the new section raise the likelihood, in real life, of employers doing their level best to covertly figure out which employees will be flexible and which will seek inflexible, guaranteed arrangements, and, having come to a conclusion, hiring the one who wants flexibility and not the one who does not. That destroys the whole intent of this clause. The Government might denigrate such behaviour by a small business employer, but few in the Government have ever run a business.
A further problem is that the new section envisages the employer having to go to all the lengths of creating the guaranteed-hours offer, and to present it to the candidate employee, without having any idea whether the candidate will take the offer. This imposes considerable friction and inefficiency on the economy and more unnecessary costs on the poor benighted employer.
Interestingly, I read through the several pages of this new section—quite possibly ineptly—but I cannot find anything about what happens in a hypothetical situation where an employer presents the required offer then says to the prospective employee, “Will you be wanting these guaranteed hours?” and, if the prospective employer says yes, the employer then does not make an offer of employment to them. It seems odd that I cannot find that; maybe it is there somewhere. In my view, if the ability of the employer to renege in that way after having been forced to make that offer is in fact there in the Bill, it would be a good thing. The Government may or may not agree, but, even if I were right in saying that this loophole existed in the current drafting and the Government, having been alerted to it, were to choose to close that loophole, it would just drive similar behaviour by employers underground.
The Bill is driven in great part by a belief in what is “fair” to employees, and so forth. I have seen in my short time here that “fairness” is often used in this Chamber; “outcomes” is not used so much. Whatever the Government’s view may be as to the crucial importance of fairness, with the best will in the world, the government drafters who focused on fairness will not have been able to bring to the issue anywhere near the level of seriousness as to outcomes with which a business owner facing survival or destruction for their business will view this matter.
This new section is just one component of an extensive and intrusive Bill that will, if implemented, see the UK’s economy further driven into the ground, with more and more parts of that economy and key players in it either becoming economically inactive or, as we are seeing on a daily basis, leaving the country. On Report, I imagine my party will oppose the entire Bill, but in the meantime, I state that it can be significantly enhanced by removing this new section in its entirety. I beg to move.