Insecure Work and the Gig Economy
(6 years, 5 months ago)
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Stephanie Peacock (Barnsley East) (Lab)
I beg to move,
That this House has considered insecure work and the gig economy.
It is a pleasure to serve under your chairmanship, Mr McCabe. I declare an interest as a proud member and former officer of the trade union GMB. I thank GMB for its support, and I refer hon. Members to the Register of Members’ Financial Interests.
Today’s debate is predicated on one simple issue: work in the UK is becoming increasingly insecure. A changing economy over the past decade has led to a boom in new jobs, which have combined to create a worrying picture of employment rights across our economy. Often under the pretence of offering flexibility, employers have exploited working practices to maximise profit at the expense of workers. The experience of being trapped in a low-paid job with no guaranteed hours, wages or security of employment, and of being unable to plan past this week’s rota or pay cheque, with fewer rights and lower pay than colleagues, is all too familiar for people across the country.
It is notoriously difficult to measure insecure work, which is in itself part of the problem, but some estimates put the number of people trapped in insecure employment well into the millions. The number of people in zero-hours or agency contracts alone is near the 1 million mark, while nearly 3 million people are underemployed and left seeking more hours than they secure week after week.
Mr Jim Cunningham (Coventry South) (Lab)
I congratulate my hon. Friend on securing the debate. We had an instance in Coventry a few years ago with a company called City Link. At Christmas, about 1,000 van drivers were laid off; those drivers rented their vans, and were left high and dry and could not get any redundancy money—so this is a timely debate. I hope that she will touch on the Taylor review, which I think did not go far enough. It could be called a whitewash, quite frankly.
Stephanie Peacock
I thank my hon. Friend for his intervention; I will indeed talk about that. He is right that the problem is not confined to small sections of our economy, but spread throughout. From tourism to retail, hospitality and our public services, the economy is dependent on these jobs. It goes far beyond genuine short-term work, such as meeting seasonal demand over the Christmas rush in retail, or the busy summer period at a caravan park. The balance of power is woefully skewed in favour of employers who use short-term contracts to minimise their responsibilities and maximise their profits at the expense of job security for their employees.
Areas such as my own in Barnsley are disproportionately affected. Former industrial towns and coalfield areas are disadvantaged communities that have been left behind by the economy and are taken advantage of. Where average wages lag far behind national levels, unemployment is higher and social mobility is appallingly low. Unscrupulous companies can offer insecure, low-paid work where the alternative is often nothing. In Barnsley, the switch to gig employment and short-term work in areas such as distribution in warehouses and our public sector means that too many people in my constituency simply cannot be certain that their job will last longer than the next rota. No matter how hard they work, their precarious employment leaves them with no chance to save up or plan for the future.
Jack Dromey (Birmingham, Erdington) (Lab)
My hon. Friend is making a very powerful case. Does she agree that a characteristic of the gig economy is that on the one hand companies make enormous profits, while on the other workforces live in permanent insecurity, with all that means for their living standards and their family life? Will she join me in congratulating the GMB for the landmark challenges it has mounted—in particular, to the grotesque abuses characterised by Uber?
Stephanie Peacock
I totally agree, and I join my hon. Friend in congratulating GMB. He is right: many employees are forced into debt and are unable to pay their bills or buy food, and others are forced to work through physical or mental illness out of fear of losing what employment they have.
Paula Sherriff (Dewsbury) (Lab)
My hon. Friend and I have heard from members of our trade union, GMB, who work in warehouses in Yorkshire on relentless shift patterns, which means that they never actually get a weekend. Inevitably, that has an impact on their mental health. Does she agree that we cannot improve people’s mental health without improving their working standards?
Stephanie Peacock
My hon. Friend makes a very important point. I believe she is referring to research from the GMB trade union, which shows that, across the country, 61% of insecure workers have gone to work while feeling unwell for fear of losing pay, hours or even their job. The same percentage have suffered mental health issues. For their troubles, they are often first out of the door when times are hard, and are cast into a welfare state that is not fit to help them.
It is not just workers who suffer. Companies’ widespread avoidance of the minimum wage, holiday pay and sick leave is estimated to cost the public purse £300 million a year in lost national insurance contributions. Such practices undermine the many employers who play by the rules, the companies that invest in their workers’ skills and training, the family-run businesses that pay their staff a decent wage, and the employers who pay their taxes and make pension contributions. In one way or another, we are all footing the bill for the businesses that take advantage of precarious work. Action is long overdue.
It is a little over a year to the day since the Prime Minister stood on the steps of Downing Street after the election and noted that people who have a job do not always have job security. Sadly, the Government have kicked the Taylor review’s recommendations into the long grass, and have failed to take action on areas such as the Swedish derogation, which I sought to address with my private Member’s Bill. Will the Minister commit to take action to ensure more and better workplace inspections to ensure that the scant, bare-minimum protections that workers are currently afforded are actually enforced, and that swift action is taken against abusive employers?
On companies that make profits off the backs of agency workers, will the Minister ensure that, from day one, agency workers are afforded the same rights and pay as permanent staff doing the same roles in the same company? That is another issue that I sought to address in my private Member’s Bill. Cases brought against Uber and Pimlico Plumbers show that such workers are employees; they are not self-employed or independent contractors, as claimed. In view of such cases, will the Government act now, rather than wait for every single worker to undertake judicial proceedings against their employer? Those are not just legal judgments against individual employers, but damning indictments of employers in the gig economy as a whole.
I have heard from an Amazon worker who has seen women colleagues tragically miscarry in a warehouse, and fights break out on the packing floor because the competition for work is so high. I have heard the heartbreaking story of a careworker whose employers forced her to provide a urine sample to prove she was too sick to work. Another careworker’s agency refused to give her work as soon as it found out she was pregnant. I have heard from a Hermes worker who gets only one day off a year to spend with his family, which has a damaging effect not just on him but on his wife and children.
Lloyd Russell-Moyle (Brighton, Kemptown) (Lab/Co-op)
Will my hon. Friend join me in condemning organisations that engage in such practices? One of my constituents ended up with hypothermia after waiting for Deliveroo work. When he was admitted to hospital, he was not offered the sick pay and protection that other employees get. The Government must take action now because although GMB and other unions are doing fantastic work we cannot rely just on unions. We need to ensure that the Government support our unions.
Stephanie Peacock
I join my hon. Friend in condemning that. I am sure the Minister is listening carefully.
Those workers are the real face of the gig economy. It is simply not good enough. We urgently need an economy that works for everyone. We need well-paid jobs that offer long-term security and give people the chance not just to get by but to succeed and prosper. We need genuine action that addresses the employment loopholes that unscrupulous employers use to exploit vulnerable workers. Many people in Barnsley and across the UK need action now.
Steve McCabe (in the Chair)
We have 12 Members who want to speak, so I have to impose a time limit of three minutes. You have to stick to that.
Gillian Keegan (Chichester) (Con)
I will follow your guidance, Mr McCabe, although I am the only Back-Bench Member represented on the Government Benches. I would like to thank the hon. Member for Barnsley East (Stephanie Peacock) for securing this important debate.
The 21st century has brought us the advent of digital technologies, which have been transformational to working environments, creating opportunity and flexibility with remote working and online networking. Unfortunately, there are cases where flexible working models have led to poor management practices and a degradation of employment rights.
Although flexible work has advantages for employers and employees, in some instances insecure work does not provide a fair balance for employees. I have experienced that in my family. A cousin of mine is on a zero-hours contract. He took a shift with a well-known retailer, but on arrival was told he was only needed for two hours, leaving him with a day’s wages that barely covered the bus fare to and from work. That is not uncommon, and it can be worse: people can turn up for work and find that there is no work for them. There is no excuse for that; it is just bad management practice. Employers can plan how many people they need before somebody turns up for work. Those situations can sometimes be facilitated by working arrangements in the gig economy, but that is not the case for most workers.
A study carried out by the Department for Business, Energy and Industrial Strategy identified that the most common use for this type of employment was to supplement income streams, with approximately two thirds of those who took part in the study earning less than 5% of their income with gig work. It was basically topping up income. Even in today’s world, it is normally women who take time off to care for loved ones, and the gig economy can provide a great way for women to continue to work while balancing their responsibilities. I am sure we all have many examples of that. I have one in my constituency. Through an online platform, a constituent does administrative jobs for 20 hours a week while her son is at preschool or when he is watching the football with her husband. I guess we are hoping that she will be earning a bit more as England continue in the World cup.
The use of flexible work to bolster household income is increasingly common. Some people choose that way of working permanently. Technology has enabled capabilities to take off as the world gets smaller, in terms of connectivity. One of my constituents, a recent graduate, currently works as a freelance online comms manager. He runs social media accounts from home, servicing the needs of companies. The work is insecure, because it is not contracted, but he values the flexibility. He is not alone; some 90% of those who are wholly reliant on gig income said that they were satisfied. Of course, we need to listen to the concerns of the 10%, some of which have been expressed here today.
The gig economy can empower people to live in a way that increases choice, allowing them to balance their commitments. That will become increasingly important as we all work for longer and will require greater flexibility in how we manage our careers.
Justin Madders (Ellesmere Port and Neston) (Lab)
It is a pleasure to serve under your chairmanship, Mr McCabe. I congratulate my hon. Friend the Member for Barnsley East (Stephanie Peacock) on securing this important debate and the powerful way in which she introduced the subject.
The world of work is evolving rapidly. The plethora of court cases and the growing uncertainty are a reflection not only of how technology is changing the employment relationship, but of how new and unscrupulous employers are seeing that as an opportunity to loosen the relationship further, usually to the detriment of the worker.
I, too, pay tribute to the GMB, which has pushed back against this wild west frontier approach, but it should not just be down to trade unions to try to make the best of 20th-century laws in the 21st century. Parliament should be setting out a new, comprehensive settlement to take us into the new world. We should do it in a way that ensures dignity, certainty and fairness for those who work in the gig economy. That is why it is completely unacceptable that, weak though it is, there has been no progress on the Taylor review a year after it reported.
I am talking about the 21st century, and I have to say that I was rather amused and disappointed by the comments made by the founder of Pimlico Plumbers.
Mr Jim Cunningham
The important thing is that we are now creating a new animal in our economy: the working poor. That is what people tend to miss, and it is happening as a result of the gig economy. We had an incident in Coventry a fortnight ago on a Saturday night between black cab drivers and Uber drivers, and it ended in a certain amount of violence. Surely, things cannot go on like this.
Justin Madders
I thank my hon. Friend for that intervention. Whole ways of working are being disrupted in ways that really are undermining the economy. I go back to the Pimlico Plumbers judgment, which found that someone who had worked for the company for six years was entitled to some basic workplace employment rights. The founder of Pimlico Plumbers said:
“We had five judges in the top court in the country and an opportunity to bring our employment law into the 21st century and unfortunately they missed the point.”
I have to say that he has rather missed the point, if he thinks that in the 21st century it is acceptable for someone to work at the same company for six years and not be entitled to any basic workplace protections. That sounds like something out of the 19th century, not the 21st.
I had rather more sympathy with him when he said:
“We can’t get our heads around this word ‘worker’ and what it means.”
I am sympathetic to that, because the truth is that the worker category has always been an unsatisfactory halfway house between employed and self-employed. If we leave aside the question of agency workers, there should be no halfway house—a person is either employed by someone or not. If we can offer a bold and clear legislative framework, with the presumption of employment if someone is carrying out the work personally, we can end the uncertainty and hopefully begin to end the exploitation that we see in the sector.
Those who advocate these new relationships often present them as providing a choice to those who work under them, but it is an utterly false choice. It is a choice that is no choice at all. A choice is ordering food from a menu or choosing to have gammon and deciding whether to have egg or pineapple with it. The choice here is whether someone accepts what is served up or does not eat at all. That is not a real choice. It is a business model and a culture that says people are as disposable as coffee cups. It says, “If we don’t have enough work, tough. If you fall ill, tough.” And, crucially, it says, “If you question our methods or challenge any of our payments, you should not expect to get any more work from us in the future.”
Without job security, people have no security. How can they plan for the future, look to buy a house, have a family, save for retirement or maybe even start their own business if the labour market is so cutthroat, insecure and parasitic that it takes everything that they have got just to keep their head above the water? I think we can do better than that. We need to enter a new world where people are valued as much as the product that they are producing. At the moment, we are in a world where exploitation is all. It has to come to an end.
Chris Stephens (Glasgow South West) (SNP)
It is a pleasure to see you in the chair, Mr McCabe. I congratulate the hon. Member for Barnsley East (Stephanie Peacock) on securing this debate and on her private Member’s Bill, of which I am a sponsor. I also want to take the opportunity to commend the work of Better Than Zero, an organisation primarily organised through the Scottish Trades Union Congress youth committee, which continues to expose rogue employers in Scotland.
Mr McCabe, you and I sit on the Select Committee on Work and Pensions. You will know that there are 4,504 full-time equivalent posts chasing social security fraud estimated at £1.2 billion. There are 400 workers from the state who are employed to chase minimum wage compliance. If the minimum wage compliance unit had 4,504 full-time equivalent posts, I just wonder whether there would be 200,000 workers in the United Kingdom not being paid the national minimum wage.
Another piece of legislation, in addition to the hon. Lady’s, is the Workers (Definitions and Rights) Bill. It is in my name, and it proposes a number of key things as solutions for workers in the gig economy. First, it looks at zero-hour contracts. I think they should only be in place where there is a collective agreement with a recognised trade union. That will be the test of whether the claim that people like zero-hour contracts is actually true or not. Mainly people tell us that people like zero-hour contracts, but I have never met anyone who went to a careers adviser at school and said, “I want wan o yon zero-hour contracts.” It just does not happen.
Alex Sobel (Leeds North West) (Lab/Co-op)
Has the hon. Gentleman considered alternative contracts such as they have in other countries? In Holland, for instance, they have contracts by agreement, which are fixed-term agreements paid by the hour with a legal route to permanent contracts. Is that something that he would consider in his legislation?
Steve McCabe (in the Chair)
Order. Just before the hon. Gentleman replies, I would point out that if people keep taking interventions, some people are going to drop off the end.
Chris Stephens
I am not opposed to what the hon. Member for Leeds North West (Alex Sobel) suggests.
I want to deal with the important issue of shift changes. Some of us in the Chamber attended a TUC event earlier this year. It is clear that two things are happening: sometimes shifts are cancelled, which means that people miss out and have to pay for childcare, and sometimes people are told they have to work additional hours. There is a real case for saying that if people turn up at work and are told that they have to work additional hours or that their shift is cancelled, they should be paid double time so that they are compensated for childcare.
We must also look at worker status. I have a very real concern about the Taylor review trying to introduce additional tiers of worker. There should be a single definition of a worker. It is clear that if someone provides their labour to an employer, they are a worker—full stop. Self-employment is also easily defined. It seems clear to me that a window cleaner with 200 customers is self-employed. We really need to address the issue with worker status to help the many people who are told that they are self-employed when, in actual fact, that is bogus.
I want to touch finally on an issue that we have seen with Carillion and in other places, such as a Hilton hotel in Scotland, where a hairdresser absconded with £80,000, leaving four workers without a job, and the hotel said, “Not our responsibility.” We need to deal with that issue, too. Where an employer absconds or goes bust, the principal contractor should be responsible for the wages and the terms and conditions of its workers.
I thank you, Mr McCabe, for calling me to speak, and I thank the hon. Member for Barnsley East for securing the debate.
Ellie Reeves (Lewisham West and Penge) (Lab)
As an employment rights lawyer for many years, I have seen time and again how insecure work can blight people’s lives. Between 2006 and 2016, there was a 49.8% increase in self-employment in London. That increase may not, as some claim, indicate an upsurge in entrepreneurial spirit, but it is a symptom of an ever more insecure workforce.
I spent the first part of my career working on holiday pay claims for construction workers. Many worked for the same company day in, day out under the strict control of their boss and without taking any of their own financial risk, but they were routinely told that they were self-employed and therefore not entitled to holiday pay, let alone to notice or protection against unfair dismissal.
Many years later, the issue of bogus self-employment has certainly not gone away, as demonstrated by the claim brought by Uber drivers, which was supported by the GMB. Uber tried to categorise its drivers as self-employed and said that they were not entitled to holiday pay or the national minimum wage, despite the fact that they were subject to Uber’s rules and training, were obliged to accept fares and could be penalised if they accepted a job and then cancelled. In a scathing employment tribunal judgment, those drivers were found to be employees. Time and again, unions and tribunals have stepped in where unscrupulous employers have thought they can get away with it.
Agency work is another area of insecure work that desperately needs reform. The Agency Workers Regulations 2010 brought in limited rights for agency workers—after 12 weeks, they are entitled to the same pay as they would be if they had been hired directly by the company—but there are a number of significant problems with those regulations. A loophole called the Swedish derogation means that agency workers can be exempted from equal treatment on pay if they have a permanent contract with the agency and it pays them a minimum amount between jobs. The reality is that agencies simply put workers on one job after another with the same hirer for many years, and that those workers never get equal pay with workers who are directly employed.
Moreover, the regulations do not create a presumption of employment with the hirer. For example, a factory worker who has worked in the same factory for 20 years but is employed via an agency could be dismissed on a whim. As the factory is not deemed to be her employer, she cannot claim unfair dismissal or redundancy against it. Surely that cannot be right.
Although the Taylor review may have been a step in the right direction, it simply did not go far enough. It is time for actions, not words, from the Government. Let us have a presumption of direct employment for agency workers, close the door to bogus self-employment and ban zero-hours contracts, and have better enforcement and tougher penalties for those who flout the law. Let us end the exploitation once and for all.
Jim Shannon (Strangford) (DUP)
I congratulate the hon. Member for Barnsley East (Stephanie Peacock) on setting the scene so well.
When I first saw the phrase “gig economy”, I thought of nightlife, but then all of a sudden I realised that this issue is about people’s lives. The debate is about casual workers and those on zero-hours contracts and, if we look across the whole of the United Kingdom of Great Britain and Northern Ireland, the rights of fully covered workers are clearly not happening for them. It is more like a nightmare, with no holiday pay, no sick pay or any idea of what wages the next week will bring.
From the beginning, however, I want to make it clear that many small shops and companies need that flexibility. It is important, and I think that every Member who has spoken so far has said that. So, if a small company employs a student during the summer time for a break of two or three months, or something like that, that is quite acceptable. We must also be aware, however, that many people consistently work up to four times longer than their eight-hour contract. The question is: why, and how can we do something to protect workers from being exploited?
I am pleased to say that Northern Ireland has the UK’s lowest proportion of workers on controversial zero-hours contracts. Indeed, a 2016 report from the Office for National Statistics revealed that only 1.9% of workers in Northern Ireland, or about 15,500 people, were employed in that way. In the UK as a whole, however, the figures are extreme, with 900,000 people on a zero-hours basis in their main job.
One of my major concerns about those on zero-hours contracts stems from the fact that, in my constituency, almost 23% of children live in poverty. That is partly due to people being on zero-hours contracts. When they are working 32 hours, getting that new pair of shoes for their child seems doable, but when they only get eight hours of work the next week, the question is not “Which shoes?” but “How are we going to eat this week?”
I want to make a quick point about food banks—I will only take a short time, because I want to be fair to speakers after me. In Northern Ireland, we gave out some 32,433 three-day emergency food supplies to people in crisis between April ’17 and March ’18, and some 13,300 of those went to children. That figure is up 13% on the past year.
I am making a point but being careful about what I say, because I know that people need to have some of these things, but I also know that they need protection. That is what this debate is about, and I congratulate the hon. Lady on it. People are struggling, and a way to help is to afford them certainty of hours and ensure that they do not feel forced into overtime for fear of losing their jobs. There is work to be done, and I look to the Minister to outline how we can begin to do that seriously, and to ensure that there is a true balance of mutually beneficial flexibility.
Siobhain McDonagh (Mitcham and Morden) (Lab)
My constituent James Bloodworth spent six months undercover working for some of the UK’s most notorious organisations for insecure work. His book, “Hired: Six Months Undercover in Low-Wage Britain”, is an astonishing insight into the day-to-day reality of such workers.
Amazon was the worst, James said. He had a zero-hours contract and he even faced a disciplinary for days off sick. It is no wonder that 74% of Amazon staff are too scared to go to the toilet in case they fall behind with their productivity targets. To quote:
“Each of us carried around with us a hand-held device that tracked our every move as if we were convicts on house arrest.”
Uber was not much better, he said, with constraints even on what can be discussed inside the car and a requirement to accept jobs although it might not be financially beneficial to do so. Likewise his time as a careworker, with relentless targets that left him with mere moments to visit each elderly person on his round. It is no wonder that 47% of careworkers leave their post within a year.
Some people see insecure work as a modern way of flexible working, but the reality is that those in the gig economy do not enjoy the flexibility. Of course, it is not only the workers and their families who lose out; so does the whole community, with the fake self-employed status of gig economy workers costing the taxpayer a staggering £75 million a week in lost tax and benefit payouts. That is equivalent to 20% of this week’s promised budget boost for the NHS by 2023.
The reality is that Jeff Bezos, Will Shu and Charlie Mullins become richer and richer off the back of their insecure employment methods, to the detriment of both staff and society. It is time that the Government stuck up not only for those workers, but for this country.
Alex Norris (Nottingham North) (Lab/Co-op)
I congratulate my hon. Friend the Member for Barnsley East (Stephanie Peacock) on securing the debate and on the powerful case that she made. Like me, she came to this place as a union activist and union member of staff. I refer colleagues to my entry in the Register of Members’ Financial Interests.
Let us be clear about this: insecure work, especially that which is low paid, is a disease in my community. It causes ill health, poverty and low aspirations, and wittingly or unwittingly we immerse ourselves in it every day. It is the delivery driver about whom we wonder why they left quite so quickly; that is because of the timeframe in which they are trying to deliver their packages. It is the barista who serves us our coffee in the morning. It is the driver who drops us off after a night out. It is around us, and it is in plain sight.
Recently commissioned Government statistics show that a quarter of workers in the gig economy are paid below the national minimum wage. We would not accept that in any salaried sector. It is a cause of national scandal, and we ought to do something about it. It is right that we, as a Parliament, take an interest in this, but we need our Government to show leadership on it. At the moment we are actually looking to those outside Government to show that leadership, and I make absolutely no apologies for praising the work of our trade unions—of my union GMB, of Unite, of USDAW and of others—in shining a light on this issue, and of my Labour colleagues in trying to make this point. Look how many of us have come for the debate.
Our trade unions, which are the voice of workers across the country, have repeatedly warned that individuals are being pressured into signing away their rights and too often have to accept low pay as a default. Companies use whatever loopholes and grubby shortcuts they need to exploit people’s desperation. We have a responsibility to act, to close those loopholes and to stand up for the employee who, in that moment, simply cannot stand up for themselves.
On the sorts of actions we should ask for, the Trades Union Congress has come up with a helpful list of five wins that would improve matters very quickly and that could be acted on immediately. They are: banning zero-hours contracts, to ensure that workers get guaranteed hours; ensuring equal pay for agency workers by ending the Swedish derogation; cracking down on bogus self-employment and ensuring that those workers enjoy the same basic rights as other employees; allowing trade unions to access all workplaces, to support workers who need representation the most; and increasing resources and powers for enforcement.
Steps such as those, which put workers and people first—including those in my community—are what we need. They are what I want from Parliament and they are what we need our Government to act on.
Wes Streeting (Ilford North) (Lab)
I congratulate my hon. Friend the Member for Barnsley East (Stephanie Peacock) on securing this important debate. The casual- isation of the jobs market is nothing new. For decades now this country has been moving from an industrial, export-led economy to a services-led economy. Over that period we have begun to see—at an increasing pace—a race to the bottom in jobs, pay and terms and conditions for working people. That is why the debate is so important.
In my capacity as chair of the all-party parliamentary group on taxis, I have raised concerns about the taxi and private hire industry, which other hon. Members have referred to. For anyone in any doubt about the agenda of those companies and the way they treat their workers, look at the way that companies such as Uber have had to be dragged kicking and screaming through the courts by trade unions, on behalf of their members—Uber workers—to be made to provide the basic terms and conditions and decent wages that everyone should enjoy.
I am proud of the role that GMB has played, of my party’s relationship with the trade unions and of the support I have enjoyed as a trade union member and supporter, which is reflected in my entry in the Register of Members’ Financial Interests. However, people should not have to rely on trade unions or High Court judges to protect their basic rights and terms and conditions; they should have a Government and a legal framework that is on their side, which they clearly do not.
We have heard nonsense about flexibility—about how flexible the gig economy is and how people really enjoy the choice. How many people would choose that flexibility for themselves?
Wes Streeting
I am happy to give way, but how many Members would choose to earn less than a real living wage or not to receive holiday pay and maternity or paternity pay? The truth is that, when we are looking at the way our economy will change—the next phase of globalisation, and the next phase of the industrial revolution that will change our country—how we protect the value of labour will be one of the single biggest questions that defines our political generation. It is about skills, but fundamentally it is about shaping the economy in the interests of ordinary working people and not allowing tech companies, top-heavy business models or digital platforms to shape it in their interests.
The Taylor review was a wonderful opportunity to answer and to meet some of these big challenges. Matthew Taylor is a great guy with a big brain, but clearly, because of his working for this Government and within the political framework in which he knew the report would be received, that report was not nearly ambitious enough. If that was not disappointing in and of itself, the fact that we have seen so little action off the back of it tells workers that they cannot rely on this Government to protect their interests. We desperately need a Labour Government that will put their interests and their rights at work front and centre.
Tracy Brabin (Batley and Spen) (Lab/Co-op)
I thank my hon. Friend the Member for Barnsley East (Stephanie Peacock) for securing this important debate. Insecure work and the gig economy are increasingly and rapidly becoming the norm. Indeed, I have spoken to youngsters out there who have never known a full-time, permanent contract or secure hours. Far too often, work in the gig economy comes with the erosion of employment rights—something that those who have worked in the creative industries know only too well. When I worked in television, we used to call ourselves the original gig economy, because just about all the work was casual and just about everyone was self-employed.
I will use my contribution this afternoon to highlight two particular points: maternity rights and pregnancy discrimination. Pregnancy discrimination is something that affects women no matter what type of employment they are in. The Women and Equalities Committee estimates that 54,000 women a year are dismissed or made redundant, or feel they have no choice but to leave their job, because of pregnancy. That is simply not good enough, but I suspect it is even worse in the gig economy. When the work is insecure and short term, the reality for many women is that once they start showing, they simply will not receive any more contracts. That is something that actors know all too well.
We need to put protections in against that culture becoming more widespread across our economy. I know that in response to the Taylor review, the Government said that they were reviewing maternity legislation, and they committed to updating the advice on the Government website this summer, but the truth is that when it comes to pregnancy discrimination the Taylor review did not go nearly far enough. It does not recommend any concrete change for pregnant women or new mothers. It makes a reference to employment tribunal fees making enforcement of rights difficult, but it does not say that fees should be scrapped. It does not mention access to antenatal care, which is a big problem for many women in casual work. It does not mention the specific health and safety needs of pregnant women and new mothers in casual forms of work, nor does it deal with their specific concerns about sick pay and qualification for maternity pay. Those issues should all be fundamental rights for all mums.
Moving on to maternity leave and pay, I think we all agree that the introduction of shared parental leave and pay is a big step forward. It is, for those in conventional employment. It is not available for freelancers or the self-employed. That is why I have introduced my ten-minute rule Bill, which would allow mums to share the maternity allowance with their freelance partners. It would cost the Treasury very little, and I know the Treasury seems quite sympathetic toward it. I simply encourage the Minister not to let this issue slip off the radar.
In summary, although I believe the Government should move swiftly to implement elements of the Taylor review, I would encourage them not to limit their thinking. Pregnancy discrimination is rife and by some measures it is getting worse. Freelance mums and dads deserve the flexibility afforded to other families. That is a matter of fairness, so now please let us get on with it.
Liam Byrne (Birmingham, Hodge Hill) (Lab)
I add my thanks and congratulations to my hon. Friend the Member for Barnsley East (Stephanie Peacock) on securing the debate.
I will just make three broad points. First, it is extraordinary that the Government have not got a grip on the debate. It are not a marginal issue. One in five workers in this country are now self-employed—a bigger proportion than public service workers. If public service workers in this country were confronting the kinds of conditions and suffering the kinds of stories we heard this afternoon, there would be a national scandal. Why are we not getting to grips with this challenge for the country’s self-employed?
If the present day is not bad enough, hon. Members should think about what is to come. Over the next 10 years this economy will be fundamentally transformed by automation, Brexit and the rise of China. Automation alone is likely to destroy five times more working-class jobs than the shutdowns of the coal and steel industries put together. We know that trend is coming; we know what happened when coal and steel were lost to communities across the country in the 1980s. What grew back were the kinds of insecure jobs we are debating now. Let us not make that mistake again. Let us put in place now a regime for good jobs in the years to come.
Secondly, we have to look again at why it is that basic laws, such as the right to trade union organising or the right to the national minimum wage, are not being enforced today. I commend James Bloodworth’s book on the scandals we have heard about. I had the honour of meeting him this afternoon. It beggars belief that some of the biggest firms on the planet, such as Amazon, are being caught not paying the national minimum wage. Where is the inspectorate? Where are the prosecutions? Where are the court cases? Is the Minister prepared to tell us what he is doing to ensure that justice is done?
We have had a useful debate this afternoon about the shortcomings of the Taylor review. The economy will inevitably grow in the years to come, so we have to try to equalise definitions of workers. We have to do away with the nonsense of the Swedish derogation and put in place the kind of action plan that the TUC has carefully and thoughtfully developed.
I will leave the Minister with this thought: there is a basic injustice in a marketplace where, over the course of a single morning, James Bloodworth can earn £29 working in an Amazon warehouse but the wealth of Jeff Bezos goes up by $1.4 billion. We had a long tradition in this country of entrepreneurs, such as George Cadbury, William Lever and John Spedan Lewis, who not only built great businesses, but changed society for the better. We need the Government to ensure that the entrepreneurs of today are doing a damn sight better job on that front.
Steve McCabe (in the Chair)
Just before I call the Front-Benchers, the debate is scheduled to finish at 5.51 pm, so there should be enough time for the mover of the motion to make a brief reply, and for the Minister, if he is so minded, to take an intervention or two. That is, obviously, up to him.
Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)
It is a pleasure to serve under your chairmanship, Mr McCabe. I congratulate the hon. Member for Barnsley East (Stephanie Peacock) on securing this timely and important debate.
As we have heard from the contributions this afternoon, a lot of people are rightly concerned about the fate of workers in the gig economy. The hon. Lady talked about the insecure employment of between 1 million and 3 million people, which is an outstanding figure to contemplate. She talked about the balance of power lying with employers, about how unscrupulous companies are using employees, especially in distribution warehouses and the public sector, and tellingly about how there is little future for those trapped in such employment. The £300 million in lost national insurance contributions alone should be of interest to the Government.
I would love to cover everybody who spoke in the debate, but that will not be possible, so I will refer to some hon. Members and not others. However, I thought everybody made a telling contribution. My hon. Friend the Member for Glasgow South West (Chris Stephens) rightly commended Better than Zero for the work that it has done and talked about the difference between the 4,504 full-time-equivalent people chasing social security claimants and the 400 workers chasing people regarding employment rights and compliance. I thought the key moment was when he spoke about career advisers not advising anyone to go for a zero-hours-contract career.
My hon. Friend rightly talked about shift cancellations and adjustments and suggested that people should be paid double time in such circumstances. There has to be a consequence if people are turning up at work and finding out that the goal posts have shifted for them unfairly. He also talked about the status of the definition of a worker and the responsibility of the principal contractor.
The hon. Member for Chichester (Gillian Keegan) was the only Tory MP to speak, which is a telling shame. She rightly said that the gig economy can provide opportunities for people, but as we have noted, flexibility is used too often as an excuse for exploitation. That is not good enough for people.
Hon. Members talked about people without proper jobs, such as those on zero-hours contracts, not having a future and struggling to keep their head above water and about the need to treat people with respect. The hon. Member for Ilford North (Wes Streeting) rightly talked about the move from an industrial to a services economy. That was backed up later when one of his colleagues talked about the move to automation. There are real challenges and workers need to be protected. As the hon. Member for Ilford North said, people should not have to rely on trade unions to make those points; they should have those protections.
The hon. Member for Batley and Spen (Tracy Brabin) rightly talked about women—a subject too often overlooked in detail—and the issues of pregnancy sick pay and maternity leave. Her ten-minute rule Bill sounds eminently sensible. I look forward to seeing the detail, but I am sure that that is something the Government should consider.
The Scottish National party firmly opposes exploitative zero-hours contracts and other types of employment that offer workers little or no job security. Scotland is ahead of the curve in promoting fairer working practices and protecting workers’ rights. Only today, my hon. Friend the Member for West Dunbartonshire (Martin Docherty-Hughes) sought leave to bring in a Bill for a genuinely representative body for the armed forces. The SNP has led on such matters at Westminster and on tackling exploitative work practices. Too often, when exploitative zero-hours contracts are used, it is said that they will provide flexibility, but the workers simply end up being exploited. Those workers often have too few alternative options. Where that practice occurs, or is likely, there should be a ban.
The Scottish Government were the first Government in the UK to become an accredited living wage employer. New guidance has been issued, to ensure that companies that bid for public sector contracts cannot use exploitative zero-hours contracts. Scotland is the best performer of all the four countries in the UK, with the highest proportion of employees paid the living wage or more. The figure is 81.6%, compared with 78% in England, 75% in Wales and 72% in Northern Ireland. We have more than 1,200 accredited living wage employers in Scotland, paying a minimum of £8.75 an hour, which is the new real living wage.
In 2015, the Scottish Government introduced the Fair Work Convention, so that fair work will be embedded in the workplace by 2025. The Scottish business pledge has signed up 498 companies, including Coca-Cola, Microsoft and Virgin Money, to demonstrate a commitment to fair work, employee engagement and, crucially, productivity. That is where companies can really take the benefit: when workers are treated properly and get a fair wage and conditions, they are far more productive in the workplace. That is demonstrable.
The Scottish Government are developing a fair work charter, to be finalised this year in conjunction with the TUC as a guide for employers and workers who face unexpected events, including severe weather such as the beast from the east, but we could do more. The Smith commission proposed that the administration of 22 reserved tribunals be devolved to the Scottish Parliament, where we could make a further difference, but the UK Government have yet to do that. Those matters cover the underlying substantive rights and duties that remain reserved to this place, so I ask the Minister whether he will now commit to acting on the issue, devolve the remaining powers and allow more protection for Scottish workers?
Laura Pidcock (North West Durham) (Lab)
I congratulate my hon. Friend the Member for Barnsley East (Stephanie Peacock) on securing this important debate, and on the thoughtful, passionate contributions made by colleagues today—all but one of them from the Opposition. It seems that the Government’s ruthless whipping ended with the last vote to happen in the Chamber.
My hon. Friend eloquently captured the fear and precariousness associated with modern workforce practices in the gig economy. She made the crucial point at the heart of the issue: there is a fundamental power inequality between the employee and the employer, and we cannot reply to that inherent difficulty in the gig economy with consultations. To remedy it, there must be recognition in law that the power imbalance exists. A pattern that has emerged as a feature of the gig economy is the process of outsourcing and of apps as managers. Those who reap inordinate profits from workers’ labour are distant from accountability for them and from their welfare. They have relinquished that responsibility.
Hon. Members have told us about people who have had long, loyal relationships with a company but have been refused employment contracts and have been left languishing with few or no workplace rights. Members are, rightly, deeply disappointed with the Government’s response to the Taylor review. It was a consultation, and for the Government to conduct a consultation on a consultation seems a weak response.
I really need the toilet right now, probably because I am eight and a half months pregnant, and my lasting memory from the contribution made by my hon. Friend the Member for Mitcham and Morden (Siobhain McDonagh) is of people being too scared to go to the toilet because they are worried about what will happen to their jobs, which is an absolute disgrace. That people are too scared to go to the toilet in this century, never mind any other century, is absolutely terrible.
The Conservatives and the Government boast about the recovery of employment and lower employment figures, but, sadly, for millions of people work means rising insecurity and low pay. Average real pay has still not returned to the level it was before the financial crisis, and the Resolution Foundation predicts that this is likely to be the weakest decade of real pay growth in almost two centuries. We might have high employment, but we also have record poverty among those in work, so a celebration of employment figures alone is completely disingenuous. What are the Government actually celebrating? More than 8 million working people live in poverty. In 2018, that is an absolute disgrace. The Minister celebrates low unemployment but fails to recognise the poor quality of those jobs.
Wes Streeting
My hon. Friend is making an excellent speech. Does she agree that it is utterly perverse that many of the people in low-paid insecure work are forced to rely on tax credits? In other words, all of us as taxpayers are funding the exploitative business models of their employers who do not pay their staff proper wages.
Laura Pidcock
It is absolutely nonsensical that the state should subsidise inordinate profits on the one hand and very poor pay on the other. The reality of modern work for millions of people, particularly in the north and in places such as North West Durham, is short-termism, insecurity, low pay and fear. Fixed-term contracts, enforced self-employment and agency work signal a move towards a more casualised and fragmented world of work. The use of zero-hours contracts increased rapidly in the wake of the financial crisis, increasing two and a half times between 2012 and 2016. The latest figures available show that that is not abating. We have had an increase from 1.4 million to 1.8 million in just six months.
When Conservative Members celebrate the flexibility—this has been mentioned many times—of zero-hours contracts, they have a romanticised vision of a student who perhaps wants summer work, but the reality is very different. One in three people on a zero-hours contract wants more hours.
Laura Pidcock
I have very little time; I am sorry.
A whole industry has exploded to formalise and professionalise insecurity at work, including through the use and abuse of new technology. It is absolutely right that we view that as the challenge of our generation. How we meet the challenges of technology replacing management structures with apps essentially being the employer is one of the most pressing issues. We need to take robust legislative action against that.
Despite the Government’s shameful resistance to protecting workers, we saw two landmark cases in the gig economy last week. First, a decision by the Supreme Court in favour of Gary Smith against Pimlico Plumbers, as has been mentioned, established that he was a worker and not self-employed. There must be an immediate end to exploitative employment practices. Last Friday, the Independent Workers Union of Great Britain won its right to pursue its case against Deliveroo, and I wish it luck.
I will end by saying that all the evidence shows that the best way to guarantee fair pay and protections at work is by strengthening the voices of workers through our trade unions—I am a member of Unite, so I register that interest—and by enabling the unions to organise and bargain collectively. That is why an incoming Labour Government would bring about a workplace rights revolution and create a new ministry of labour, which is not currently a Department, to give workers and trade unions long overdue rights and protections in law. We will of course repeal the shameless Trade Union Act 2016 and introduce new legislation to roll out sectoral collective bargaining.
Laura Pidcock
I am so sorry; I cannot. I have gone over my time already, and I want to ensure that my hon. Friend the Member for Barnsley East manages to sum up.
Hon. Members have given the Minister many solutions for zero-hours contracts, such as the Swedish derogation, equal rights for agency workers and, crucially, enforcement —things will not improve without enforcement. It is only with workers and trade unions at the heart of workplace decision-making processes that we will tame and eventually eradicate the abuses in the gig economy. I look forward to hearing the Minister set out what I am sure will be exciting and groundbreaking announcements to end the inherent exploitation at the heart of the gig economy.
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Andrew Griffiths)
As always, it is a great honour and pleasure to serve under your chairmanship, Mr McCabe.
It is also a great honour and pleasure to take part in what I think we all agree has been a very important, well-attended and very positive debate about the desire of Members from all parties in this House to protect the most vulnerable workers in our society. I congratulate the hon. Member for Barnsley East (Stephanie Peacock) on securing it and on the magnificent way in which she spoke up for workers in her constituency and across the country.
Employment rights and protections are important for this Government. In fact, the Government have made a commitment to seek to enhance rights and protections in the modern workplace. The gig economy and agency working offer great opportunities and new ways in which to participate in the labour market. For many people, they have transformed their opportunities to work when and how they want, and produced a flexible and dynamic way to work.
Andrew Griffiths
I will give way just once; Members will understand that I am short on time.
Justin Madders
It is very generous of the Minister to give way. Obviously, we have heard a lot about flexibility, but if someone is reliant on these employers to give them work, does he think that the landlord will be flexible in getting the rent for that month?
Andrew Griffiths
I completely understand the hon. Gentleman’s point. That is why we have recognised that those opportunities come with risks, and that some in the workforce need greater protections.
The UK’s flexible, dynamic labour market has allowed the economy to bounce back from Labour’s recession and has delivered record employment; unemployment is at the lowest rates for 40 years. However, we recognise that it has not worked for all. It was for that reason that Matthew Taylor was asked by this Government to examine the current labour market and employment law framework, to help us to understand the opportunities of future working practices as well as to identify areas where the labour market was not working for everyone.
That is why in February the Secretary of State for Business, Energy and Industrial Strategy made a commitment in the industrial strategy to take responsibility for the quality of work, which was the first time ever that a Government focused on quality as well as quantity of work. Our aim is to drive forward the change required to ensure that creating quality of work is given equal priority to the quantity of work that is created.
Our detailed response to the Taylor review was published on 7 February. In that response, we committed to take forward 52 of the 53 recommendations. Our response clearly demonstrates that we are progressing with our commitment to take firm action to protect the most vulnerable, the lowest paid and those who work in a non-traditional way.
For example, we have consulted on state enforcement to ensure that vulnerable workers get their holiday and sick pay; we have asked the Low Pay Commission to consider higher minimum wage rates for workers on zero-hours contracts; we are providing all 1.2 million agency workers with a clear breakdown of who pays them, and of any costs or charges that are deducted from their wages; we are ensuring that all workers get an up-front statement of terms and conditions from day one; we are making it easier for flexible workers to accrue employment rights, by extending the permissible breaks in continuous service; and we are creating a right to request a stable contract for all workers. To progress that work, we have very recently completed four consultations on employment status, agency workers, transparency and enforcement, which are necessary to deliver the change that this Government wish to see.
The hon. Member for Barnsley East asked whether we would give workers the same equal pay rights as other employees. The Government do not support or condone the use of Swedish derogation contracts to circumvent equal pay entitlements. Let me be absolutely clear on that. That is why we have consulted to gather views and evidence on our response. Options include repeal or regulation in relation to the use of the Swedish derogation. Before taking a final decision, it is right that we consider the views coming forward properly in that consultation.
The hon. Member for North West Durham (Laura Pidcock) accused the Government of ruthless whipping. As a former Whip, I take great exception to that. She raised the issue of zero-hours contracts, but the number of people reporting that they are employed on a zero-hours contract is down from 905,000 last year to 901,000. Some 6% of businesses use some form of a zero-hours contract. There are 1.7 million temporary workers in the UK, but 28.4% of them said that they did not want a permanent job.
My hon. Friend the Member for Chichester (Gillian Keegan) made a magnificent speech, and pointed out the challenges and the opportunities of the gig economy. She rightly said that 90% of gig economy workers are satisfied with the jobs they are doing.
The hon. Member for Glasgow South West (Chris Stephens), in his usual determined manner, said that there should be more people enforcing the minimum wage. I am delighted to tell him that the Government have continued to invest heavily in minimum wage enforcement. We have doubled the budget to £26.3 million, up from £13 million last year. As a result, we secured £15.6 million in arrears last year, covering 200,000 workers in this country who had redress thanks to the Government’s support.
Chris Stephens
Will the Minister confirm that 25% of the posts at the national minimum wage compliance unit are still lying vacant?
Andrew Griffiths
I do not think that is right. I will write to the hon. Gentleman, but I assure him that those figures are wrong.
The hon. Member for Batley and Spen (Tracy Brabin) asked what the Government have done about pregnancy and maternity discrimination—a subject that is dear to my heart and that of the hon. Member for North West Durham. In response to Taylor, we are working to improve the guidance and advice on pregnancy and maternity rights and employers’ obligations. We also committed to review redundancy protection within the next 12 months. The hon. Member for Batley and Spen asked about shared parental leave for self-employed people. As she recognises, it is under review. I cannot commit to that today, but once again she makes that point loud and clear.
The Taylor review considered not only the plight of agency workers, which many hon. Members raised. In his 2018-19 strategy, the director of labour market enforcement published recommendations to support those workers. In response to Matthew Taylor’s recommendations on agency workers, the Government have already committed to take action and improve transparency on pay and on the rate workers will receive on taking up assignments. Quite simply, it is not right that individuals do not receive the advertised rate of pay.
I have mentioned the issue of the Swedish derogation. We are also considering extending the Employment Agency Standards inspectorate’s remit better to protect agency workers from emerging challenges in the labour market. We are looking at whether it should include umbrella companies, about which we all have concerns. I am sure the hon. Member for Barnsley East understands that I cannot pre-empt the results of the Taylor consultation. It is clear that Members on both sides of the House agree that agency workers’ employment rights need special consideration and protection.
The Government are committed to ensuring that the UK is a great place not just to grow a business, but to work. We understand that being employed is not enough if the employee is at risk of being exploited or mistreated by their employer. We have consulted on options for what would be the most radical shake-up of our employment law in decades and we will take the necessary action to protect workers across the United Kingdom.
Stephanie Peacock
I begin by thanking you, Mr McCabe, as well as the Minister, the SNP spokesperson and especially the shadow Minister, my hon. Friend the Member for North West Durham (Laura Pidcock)—I believe this is her final debate, so I wish her well in her maternity leave—for their contributions. Most importantly, I thank all hon. Members from across the House. We have seen in all the contributions just how insecure and precarious work is affecting our constituents.
As was rightly pointed out, the Opposition make no apology for trade unions being the voice of working people. I pay tribute to my union, the GMB, and all trade unions campaigning on this issue. A number of examples were given of the work they do, and in particular the simple steps put forward by the TUC that could tackle the problem.
We heard many appalling examples of the treatment of workers by a number of companies and the devastating impact of that on workers’ health. There were examples of exploitation of working practices, the impact of automation and the truly shocking level of in-work poverty, which is an absolute scandal. All that testimony combined to form a truly damning portrait of the lives of workers with insecure employment. It is a picture of people trapped in low-paid work who are treated without dignity or respect by their employers, who exploit short-term working practices to maximise their profit at the expense of their workers’ security. Some are driven into debt, struggling to buy food or pay bills; others into ill health. It is not good enough.
For all the Minister’s statistics, we need action, and we need it now. The Government must act now to end exploitative working practices, provide an economy that works for everyone and ensure that hard-working people in Barnsley and across the UK are provided with the long-term secure employment they desperately need.
Question put and agreed to.
Resolved,
That this House has considered insecure work and the gig economy.