Queen’s Speech

Baroness Donaghy Excerpts

Tuesday 10th June 2014 Lords Chamber

[Baroness Donaghy (Lab)]

My Lords, a week ago I enjoyed an evening with the Involvement and Participation Association, of which I am vice-president. Employers from top-rank organisations talked about employee engagement, trade unions were respected and HR directors were committed to encouraging a voice for workers whether or not they were in a union. However, I noted that this is an unusual experience in the UK, where the world of work is more likely to witness increasing levels of inequality in our society and no consultation. It was reported at that AGM that an alarming number of employers cited e-mails as the main method of communication and even consultation with their employees. Fairness and dignity at work are not just about money. An example was given of a FTSE 100 company that sent a standardised retirement letter to an employee after 40 years’ service and managed to get the spelling of his name wrong as well. His colleagues were more agitated about this than any other more tangible grievances about pay and conditions.

The world of work is central to all of us, whether it is the 30 million people in the UK who are in work or those who are seeking it. Work provides an income essential for living, helps to place us in society and sometimes provides dignity and enjoyment, but when is it ever discussed as a central issue in this Parliament? It is referred to in terms of statistics to show how successful or otherwise a Government are in providing jobs, when loosening worker protections on the premise that employers will grow their businesses on the back of it and when employers want to make it easier and easier to dismiss workers. You would think that employment tribunals are the only things that matter in the world of work, when they are in fact the rarest element—something that the vast majority of workers never experience and never will. However, the tail continues to wag the dog. Having said that, I believe that the changes to employment tribunals made by the coalition Government are a disgrace and the sooner they are repealed the better.

However, the fundamental issues in the world of work are what kind of society we want to be, why we are less productive in this country, why there is growing inequality and diminishing fairness at work and why the relative pay gap between workers and executives has stretched almost beyond belief. Job insecurity and casualisation have not, and will not, improve productivity. As my noble friend Lady Drake said, that does not help with applying for mortgages, planning for one’s children’s future or saving for a pension. We are building a legacy of long-term poverty and giving future generations a choice between increased state dependency or a return to the dark ages.

I am not saying that casual working should be abolished: it has always been with us. I remember that at the University of London in the 1960s the Senate House had a pool of what were referred to as “call girls” to assist at the busier times. In some industries the workforce prefers to opt for a flexible system which suits both employee and employer—although not necessarily the collection of tax. However, I am talking about the wholesale abuse of casualisation. I applaud the proposals in the Pickavance report, commissioned by Ed Miliband, which calls for a code of practice to be drawn up, in conjunction with ACAS, protecting workers after six months if they work regular hours and banning compulsory standby and exclusivity. An amendment to the Employment Rights Act 1996 to require employers to provide information about basic terms and conditions to all workers within two months of commencing work would also be welcome—in other words, extending the right which employees already enjoy.

The increasing pay gap between worker and executive represents a massive corporate failure in the UK and is a threat to the public’s trust in business. Seventy-six per cent of voters think that big business has too much power over government. In 1980, the pay for a FTSE 100 chief executive was 20 times the national average; in the late 1990s, it had risen to 60 times the national average, and today it is 160 times the national average. The exasperation of the public with our political system, although manifested in our newspapers as exasperation with the failure to deal with immigration or with politicians on the make, may really be about inequality and a feeling of powerlessness. I find it interesting that 80% of UKIP voters are as likely as the wider population to demand government action to reduce inequality.

The Government have no programme to make this a priority or even to tackle increased inequality; instead, they search for ways to deprive people of their rights. For instance, why on earth are they proposing to take the police out of health and safety legislation? Are the police not workers, too? I congratulate the leader of my party, Ed Miliband, on saying that low pay will be a priority for the next Labour Government. It is important to retain the independence of the Low Pay Commission and in doing so and to strengthen it.

Similarly, why not have a statutory requirement for workers to sit on boards? It is only a tiny aspect of worker involvement but it will be resisted as if it was the equivalent of the peasants’ revolt. It was resisted by employers in Germany but is now part of the country’s culture and its successful economy. Relativity should be central to every enterprise. Unfair pay differentials have consequences—more sickness absence and higher staff turnover as well as lower productivity.

It is good news that we have 30.43 million people in work in the first quarter of this year, but then we have more people due to demographics and immigration. However, 2.2 million unemployed is not good news. The number of unemployed women aged 50 and over has increased by almost half since the coalition came to power: 162,000 older women are unemployed. They have talent and experience and they vote. We need an honest appraisal of what kind of jobs will be needed in the future. The Edge Foundation has said that nine of the 10 occupations most in demand in the future will require vocational skills.

Finally, the references to employment in the Queen’s Speech were predictable, with some being good and some bad depending on the detail. However, as the noble Lord, Lord Higgins, said, there is also a reference to,

“work to build a fairer society”.

I have seen no evidence of this yet but, if the Government are sincere, they should come forward with proposals to ensure that workers have a voice, are not treated as commodities, are paid fairly, are given appropriate job security and are not paid 80 times less than their boss. That really would be a fairer society.