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More red tape for temporary workers

15th December 2003

Mr Djanogly: I echo the comments of my hon. Friend the Member for North-West Norfolk, particularly that we are discussing an exercise in goldplating, the effect of which will be to increase significantly the burden of regulation on business. The regulations will increase the rigidity of the labour market, in what is becoming the time-honoured fashion of Government. They seem to believe that increasing regulation on business - in this case, the agency workers market - will somehow improve the market. Indeed, the explanatory notes to the regulations state that their purpose is to

"benefit employment businesses by making temporary work more attractive"

The notes also state that the Government are removing unnecessary regulation, but if we examine more closely the number of provisions that are involved, we find that the Government are reducing regulations in about three of them, increasing the burden in about 25 - not including the six new schedules. A new burden is to be placed on business, to add to the 50 new regulations that are put into place every day under this Government.

The explanatory notes identify one-off costs to businesses of £6.2 million and recurring costs in lost fees of up to £15.4 million. Let me take those figures at face value. The notes do not assess the increased cost to the consumer of the final goods or services. The consumer normally ends up paying for the increased regulations, I doubt that it will be any different in this instance. Of course, there are various scenarios in which both agency workers and people in full-time employment have been exploited, but why could not the Government adopt a non-legislative approach - promoting best practice through codes of practice, naming and shamingm and so forth? They had to move straight to regulation.

The notes also show that 28 per cent of businesses with 25 or more employees used temps. Those figures come from a 1998 survey. After my earlier intervention the Minister failed to say why the sector has been growing so much in recent years, but we all know that it is due to the massive employment costs being put on businesses, which have been looking to temporary workers to restrict their business costs. I am surprised that the Government have not rechecked the 1998 figures. We do not know how many companies are affected by the regulations, but I doubt whether the Government have received complaints from most of the businesses in that 28 per cent. How many businesses have been abusing their workers since the deregulation of the sector by the Conservatives in 1995? Are the problems we face in this area sufficient to justify regulations? We do not know, because the Minister has given us no quantification of the number of people complaining or the number of companies involved. Therefore, we do not know why the regulations are necessary. The damage has not been quantified.

The regulations stop temps being used during official industrial disputes. The notes acknowledge that the use of temps

"is likely to worsen the climate of industrial relations and it does not appear to be often used"

If that is so, why are the regulations needed? Could it be that the Government are pandering to their union friends - in the face of what experience says is needed - at the cost of companies going bust at a time of increasing strikes?

Mr Sutcliffe: The hon. Gentleman might have heard his leader talk about the European social chapter? Was he in favour of this Government opting out of the social chapter, or would he still want the situation we had before, in which people were still not entitled to rights?

Mr Djanogly: The Minister has got it wrong. This Government did not opt out of the social chapter. The Conservative Government kept the opt-out, and they were right to do so. In my opinion it was wrong to sign up to the social chapter.

With respect to my hon. Friend the Member for North-West Norfolk, the regulations are not all about gangmasters in Norfolk. Although the 28 per cent figure refers to the largest sector affected - that dealing with financial intermediation, real estate, renting and business activity - the second largest figure, which is less than 1 per cent less shows that 27.8 per cent of all agency temps are employed in public administration, defence, education, health and social work. The public sector is almost the largest sector to be affected by the regulations. Do the Government intimate that the public sector has been undermining its temporary workers? The consumer in that case is the local or national taxpayer. The cost of carers in local government - a significant number of whom are employed on a temp basis - has increased dramatically in recent years. That has caused significant problems to local government and taxpayers.

Mr Bellingham: Is my hon. Friend aware that the public sector is exempt from the regulations? Perhaps the Minister will confirm that. NHS Professionals will be able to compete with the private sector on better terms and local education authorities will be able to charge fees to schools, so they will be in an advantageous position compared with the private sector. That seems quite rum, as they say in Norfolk.

Mr Djanogly: I totally agree with my hon. Friend. He makes an important point and I am pleased to have raised the matter, if only to put it on record. It is all right for the unions and the public sector, but, again, the private sector will have to bear the costs.

The regulations are being rushed through with almost zero consultation. No attention has been paid to business or anything else, except the Government's timetable. I shall be happy to oppose them.

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