Baroness Donaghy Portrait Baroness Donaghy (Lab)
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My Lords, I congratulate my noble friend Lord Hendy on his Private Member’s Bill, and on making the issues so clear and understandable. When I chaired ACAS, it was a humbling experience to listen to the helpline and see the reality of how human beings can be treated in the UK.

I shall concentrate on why the Bill will be good for employers and government revenue. When I was invited to employers’ groups during my time at ACAS—I accept that they were the conscientious employers and probably at the better end of the labour market—they wanted fairness and a level playing field, not to be undercut by less scrupulous employers. They wanted clear guidance as to their obligations and responsibilities.

If we could deal with bogus self-employment in the construction industry, referred to by my noble friend Lord Monks, we might get a more settled workforce, encouraged to improve their skills and report health and safety incidents. If workers have no job security, they are unlikely to report dangerous work practices on the Friday, to find they have no job on the Monday.

I had the privilege to serve on the Personal Service Companies Select Committee, under the exemplary chairmanship of the noble Baroness, Lady Noakes. The committee expressed its concern that individuals working through personal service companies might not be aware that they had forgone at least some level of employment protection and benefits to which they would be entitled if they were in conventional employment. As my noble friend Lord Hendy said, the real employer is insulated against any responsibility whatever for their rights.

Were the Government concerned about the Select Committee’s work? The Treasury Minister refused point blank to attend the committee, despite requests from the noble Baroness, Lady Noakes. In the seven years since the report came out, things have got worse. The right reverend Prelate the Bishop of St Albans referred to lost revenue to the Exchequer. The taxpayer is subsidising the payroll bills of the unscrupulous employer.

The noble Lord, Lord Callanan, has written that the

“three-tiered Employment Status structure provides the right balance for the UK Labour Market”.

It certainly does not provide any balance for women, the BAME community, the disabled and those seeking job security. Self-employment can be brilliant for those who want it, but 1.85 million so-called self-employed earn less than the national minimum wage, more than half of them women. The Government have said that bogus self-employment should be determined by individual cases at employment tribunal. That is all very well, but it comes over as a bit cynical, given the backlog of cases at employment tribunals and their geographical inaccessibility. There is no fairness or justice here.

Finally, the extreme flexibility in the labour market can come back and bite the economy. The shortage of HGV drivers will lead to distortions in pay and conditions. A care worker who decides to work in a supermarket or a warehouse will not help the hundred thousand vacancies. It leads to low skills, low expectations and little loyalty. There is a chance to build and progress in the Bill, and I urge the Government to accept it.