The Tories are just tinkering around the edges of the gig economy while real change is needed
After months of Brexit chaos, the government has published its much-trumpeted ‘Good Work Plan’.
The Government of course lauded the current rate of unemployment. This is the only statistic the government can use to defend its economic record, but clearly this figure does not tell the real story.
Britain has just experienced the worst decade for productivity growth since the 18th Century. Real terms earnings are not expected to return to pre-crash levels until at least 2025, and in terms of insecurity, according to the TUC there are up to 4 million people in insecure work.
Indeed, horrific tales of insecure workers swirl around us like the words of a Charles Dicken’s novel. There are delivery drivers afraid to take a break and forced to urinate in bottles and zero hours staff giving birth in workplace toilets too frightened to lose their jobs.
But sadly, despite succesful campaigns by our Trade Unions and Labour such as the campaigns to abolish the Swedish Derogation and ensuring that workers keep their tips, there was little else within the Government’s proposals to provide many workers with the security and stability they need.
Staggeringly, the Secretary of State for Business Energy and Industrial Strategy attempted to package the lacklustre proposals as “the largest upgrade in workers’ rights in over a generation”.
But the response was justifiably frosty.
The TUC stated that the reforms as a whole, “won’t shift the balance of power in the gig economy”
Unite the Union said: “This is a time of historic low wages and of chronic job insecurity. We need proper, substantial action to combat this but what is on offer falls well short of what this country needs to deliver work that pays”
The GMB Union said that the “system was broken” and “tinkering around the edges would not fix it”
And the IWGB Union subsequently called for a motion of no confidence in the Business Secretary to be tabled due to his failure to get to grips with the gig economy and the issues faced by precarious workers.
Behind these responses lay a number of critical concerns, a few of which I will touch upon briefly.
Firstly, the Good Work Plan states at the outset that the Prime Minister has committed that she will not only maintain workers’ rights as the UK leaves the EU, but enhance them.
But even this opening paragraph conflicts with reality. The Government’s Brexit withdrawal agreement simply fails to live up to this commitment on worker’s rights. As the Institute for Public Policy Research says:
“The non-regression clause will not maintain current protections in full, enforcement procedures would be ineffective and if the EU to raises standards, there would be no requirement for the UK to follow suit”
Secondly, it appears that the critical issue of employment status, particularly the gig economy, has been left hanging with vacuous assurances that government will at some unknown point in the future provide clarity on the legal tests.
Thirdly, on zero hour contracts, we saw smoke and mirrors. The Government will allow workers to request a more predictable and stable contract. This may sound lovely but the ability to simply request stable hours already exists. What doesn’t exist is an obligation upon the employer to meet this request.
Indeed, many Trade Union and Labour colleagues have likened this to Oliver Twist asking for more gruel only to be hit over the head with a ladle for his insolence!
The fourth critical issue is that of enforcement. The Government’s own Labour Market Enforcement advisor Sir David Metcalf highlighted the Government’s inability to enforce legislation against unscrupulous employers.
Looking at minimum wage enforcement as an example, in 2016/17 HMRC completed nearly 2,700 investigations. With 1.3 million employers in the UK this suggests that the average employer can expect an inspection around once every 500 years!
So the Government’s proposal to create a single enforcement agency may sound good on paper but without the necessary promise of adequate resource and of any recognition of the budget cuts enforcement bodies have faced in recent years, many would be right in questioning whether the Government was really serious about enforcement at all.
It is also important to note that the Government also refused to utilise other simple enforcement resources at their disposal, rejecting Sir David Metcalf’s recommendation that public procurement contracts should explicitly compel compliance with labour market regulations on the very ambiguous grounds that it could “unfairly promote [labour market regulation] compliance over other legislation when we expect compliance with all relevant legislation”
The fifth issue is that of increased penalties for successful employment tribunal claims. The TUC have found the current system for enforcing employment tribunal awards is not fit for purpose. 35 per cent of successful claimants do not receive any compensation and the BEIS Penalty Scheme, created in 2016, is inadequate as it fails to recoup any award for the claimant.
So whilst many would not disagree with increasing penalties, it is clear that without the ability for claimants to enforce their awards, the proposals are just window dressing.
Finally, the most telling part of the Government’s Good Work Plan was perhaps a gaping policy gap concerning the organisations on the front line of defending worker’s rights, our Trade Unions.
Otto Khan Freud, the eminent legal scholar once stated, “The main object of labour law has always been, and we venture to say always will be, to be a countervailing force to counteract the inequality of bargaining power which is inherent and must be inherent in the employment relationship. Most of what we call protective legislation… must be seen in this context.”
Laws which give unions greater rights to bargain also enable those unions to achieve higher wages and, indeed conditions, for their members. And laws which help unions access workforces and collect members, in turn, help those new members to achieve greater security and rates of pay.
Sadly we know all too well that the Government has no intention of ensuring Trade Unions can play their role in rebalancing this inequality. Only a few years ago it passed the pernicious Trade Union Act which sought to limit the ability of Trade Unions to recruit and protect their workforces.
But as the TUC have stated very clearly: ”Unless unions get the right to organise and bargain for workers in places like Uber and Amazon, too many working people will continue to be treated like disposable labour.”
It is evident therefore that despite the warm rhetoric and clever spin, this Government is not serious about tackling the root causes of insecurity at work.
Labour, however, is ready with a plan that would transform our work places, giving both employers and workers the security and clarity that they so desperately crave.
Labour would give all workers equal rights from day one, whether part-time or full-time, temporary or permanent – so that all workers have the same rights and protections whatever kind of job they have.
We would also ban zero hours contracts and ensure that workers get a guaranteed number of hours, as other countries, including New Zealand, have already done.
And, importantly, the Labour Party would strengthen trade union and collective rights. Labour has been clear that we would repeal the Trade Union Act 2015, guarantee trade unions a right to access workplaces, enforce all workers’ rights to trade union representation at work and institute sectoral collective bargaining. Doing so would help workers secure better conditions, pay and strengthen productivity – all the problems which affect the labour market.
Sadly however, under this Government, many of our workers will go into the New Year resigned to what can only be described as a Dickensian year ahead.
They would be right to feel let down, they would be right to feel ignored and they would be right to have no confidence in this Government to deliver the quality of life they deserve. Labour’s plan would give them the security and future that is justifiably theirs.
Rebecca Long-Bailey is the Labour MP for Salford and Eccles and the Shadow Secretary for Business, Energy and Industrial Strategy
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