Taylor Review of Modern Working Practices

Lord Fox Excerpts

Tuesday 11th July 2017 Lords Chamber

[Baroness Hayter of Kentish Town (Lab)]

I thank the noble Lord for repeating the Statement on the review of modern working practices. We all look forward to studying it carefully and working with all concerned to respond to these new ways of working, as over time we have done with the invention of printing, photocopying, computers, mobiles and the internet. Working together we can make new technology and changing demands work for the whole of society.

However, I fear that the Government’s Statement looks only at two parts of the market: workers and business. There is in fact a vital third limb: the consumer or customer. I happen not to use Uber, one of the best known of the gig institutions, but many consumers do, including women, who often do not like to hang around on street corners trying to hail a taxi and who appreciate not having to carry cash in order to hire a cab. But it is not in their interest for a driver to be overtired, unwell or underinsured, and at work only because of pressing economic needs. Consumers need to feel safe, with a driver who is fit and healthy, awake and concentrating, and not worrying about their next fare; and they want to know that the driver is getting a fair day’s pay for a fair day’s work.

Other parts of the gig economy may not have face-to-face consumers in the same way, but all have customers of the firm’s business, who similarly need to be assured of the quality of the work, which is highly dependent on the motivation and decent conditions of what the report calls “dependent contractors”. It is true that contented workers make for higher-quality work. So as the Government digest the report, will they involve the consumers and customers of such services in addition to the other key players?

Will the Minister also undertake to involve trade unions fully in this work, which would help the Government as well as the people concerned? Traditionally, of course, vulnerable and exploited workers have had their standards raised and their rights protected through the intervention of trade unions. But as we know, for obvious reasons workers in these sectors are a real challenge to recruit. There have been other similar areas in the past where wages councils played an invaluable role. While I hope that the unions will seek to represent this group, we should be realistic and acknowledge how difficult that is and therefore we need other avenues for unions to be able to speak on behalf of these workers. The report calls for additional protections for gig workers and greater incentives for firms to treat them fairly, including through strong employment relations, but this will need trade union input. I hope that the Minister can give a clear assurance that this will happen.

I want to make one other point. The report does little to strengthen the ability of workers to enforce the rights they already have, beyond shifting the burden of proof in one case when determining the employment contract. The Minister and this House know that the level of employment tribunal fees is a real barrier to justice, so we will continue to press for the fees to be abolished. The Minister has repeated the commitment to workers’ rights, but without their ability to enforce them through tribunals, those rights are really just pieces of paper. It is in no one’s interest for this group to be exploited, but it will need a commitment on the part of the Government to ensure that that does not happen. This is an important area for the future of the economy, for the workers concerned, and for us as consumers.

At first read—and it is only a first read—the report does seem to be somewhat tame and appears to be a missed opportunity to grasp the challenge looking forward to the rest of this century of the contribution that the gig economy can make. The Government need to take up the challenge of grounding in the expectations of all employers the need to treat this group of workers fairly and preserve their rights. We will be looking to the Government to work with all stakeholders to ensure that the change in culture as well as regulation will ensure that this part of the economy is fair for all concerned.

[Lord Fox (LD)]

My Lords, this report is welcome as it frames the need to reconsider working conditions in a clear manner. I should like to quote from it that,

“while having employment is itself vital to people’s health and well-being, the quality of people’s work is also a major factor in helping people to stay healthy and happy, something which benefits them and serves the wider public interest”.

This is an important and true statement that we should bear in mind when considering not only this report but the wider realm of employment and industrial strategy. We are living in a time of huge change in the world of work, so the Prime Minister was right to ask Matthew Taylor to carry out an independent review and produce a report. As noble Lords will have noted when I dropped it just now, the resulting document is comprehensive and hard to absorb in the short time we have had to do so.

The Government’s Statement points out that the report highlights the need to deliver additional protection to the increasing number of people we describe as platform-based, or rather, what we know as the gig economy. The most important distinction to make is between the creation of a new group of workers or dependent contractors and those who are truly self-employed. While this may seem to be tame to some, it is starting to move down the road of classifying people in a way that enables them to have the rights they deserve. So it should be no surprise that the Liberal Democrats broadly welcome the recommendations in the Taylor review. The right to request fixed hours and employment rights for those who are now classified as dependent contractors was set out in the Lib Dem manifesto, so obviously we support that. If enacted, it will provide additional protections for this group as well as strong incentives for firms to treat these workers fairly. It is clear that these rules will have to be backed up by policing. That will improve workers’ rights in the gig economy while maintaining flexibility for those who want it, and that is the key. Some people want flexibility, but others have it thrust upon them. Noble Lords may remember that the Government opposed these proposals during the coalition Government.

We should also remember of course that workers’ rights are ultimately underpinned by EU law. This is backed up by the UK’s ability to create and protect high-quality jobs, which in itself is dependent on the UK being part of the single market. As noble Lords would expect me to say, under Theresa May’s Brexit plans we will continue to see falling real wages and slowing economic growth, and jobs will begin to fall back. This is bad for all workers but it is worse for these workers. Furthermore, there are some people—including on the Benches opposite—who will seek to use Brexit not to strengthen workers’ rights, but to weaken or even abolish some of them.

That is why it is important for the Government not to get bogged down in this report and to move swiftly. The Minister has pledged to respond by the end of the year. We look forward to the industrial strategy and how that will play into this. We believe it is important that the Government proceed rapidly to a conclusion that accepts the clear direction of this report and brings forward proposals that will enact its substance. The longer the Government delay, the longer this important and growing band of workers will be deprived of justified employment rights. The longer the Government delay, the more suspicions will be raised that Brexit will be used to water down people’s rights. As the report says:

“All work in the UK economy should be fair and decent with realistic scope for development and fulfilment”.


We hope the Government accept that point and bring forward rules and laws that help to bring it about.

[Lord Prior of Brampton]

My Lords, I shall first respond to the two asks from the noble Baroness, Lady Hayter, the first of which was that we should take into account the consumer. She is absolutely right. I read the report fairly rapidly myself and she is right about that. Thinking about it, it is very much focused on workers and businesses. We ought to look at it through the eyes of the consumer, such as the lady waiting for her Uber late at night who wants to know that the driver is indeed safe, healthy and wide awake. That is certainly something we will feed back into the consultation over the next few months.

Secondly, the noble Baroness raised the involvement of trade unions. They have been fully involved in this whole process. Matthew Taylor has been exemplary in reaching out to all kinds of people, not least the trade unions. As she knows, trade unions these days are very much focused on public services. Their representation not just in the gig economy but in the private sector as a whole is much diminished. In part that is because many companies in the private sector have exemplary employee relations and have done an extremely fine job. There is much the public sector can learn from the private sector in some of these areas. Nevertheless, I assure the noble Baroness that Matthew Taylor has indeed reached out to the trade unions.

The noble Baroness also raised employee tribunals. I have a note on that, but maybe, since it is a fairly narrow area, I will write to her about it. She knows we are consulting on this to reduce the threshold to enable help for industrial tribunal fees, but I will write on that point.

The noble Baroness ended by saying that she thought this was a slightly tame report—I think that is the word she used. I argue, as I think the noble Lord, Lord Fox, would, that it is a balanced and fair report. It is not sensational, in part because the system is working quite well. The statistic that really surprised me on reading the report was that there has not been nearly as much change in the labour market over the last 20 years as I thought. Actually, 63% of people in full-time employment are on a conventional employment contract, and 20 years ago the figure was 64.6%. I thought a bigger change had happened. Nevertheless, as the noble Lord, Lord Fox, commented, this is an important and growing part of the economy. It is quite right that we should look at this issue now and get the balance right between flexibility on the one hand and proper job security on the other. It is an extremely important balance to get right.

I assure the noble Lord that the Conservative Party and the Prime Minister are not using Brexit as any excuse for watering down employee rights. The Prime Minister has been absolutely clear that she wishes to maintain and even enhance employee rights, and this is an area where maybe we can enhance employee rights.

The noble Lord asked for a rapid response. Of course, that is tempting, because I think we all agree with the spirit of the report. It is easy to talk in generalisations today, but it may take a little longer to get some of the distinctions right between employee, self-employed, worker and dependent contractor, and nail them down so they have legal validity.

I think we all agree with the noble Lord that all employment should be fair and decent, with scope for fulfilment. It is easy to say that that is just motherhood and apple pie, but there is no doubt that companies that treat their employees fairly and decently and as proper colleagues have much better results.