Employment Rights Bill (Third sitting)

Debate between Chris Murray and Steve Darling

Committee stage
Thursday 28th November 2024 Public Bill Committees

[Steve Darling]

Q My constituency, Torbay, is sadly in the upper quartile of the most deprived constituencies. I would welcome your reflections on how the Bill could have an impact on constituencies such as mine where there are high levels of deprivation.

Nye Cominetti: Well, I have a few caveats. First, overall employment rates are lower in high-deprivation areas, so we need to remember that all these measures will have an effect on workers, rather than those who are not working. If you want to improve income levels, this is not the place to do it. As I was just saying, however, we know that low-paid workers experience those issues of insecurity at higher rates than high-paid workers.

You also need to remember that there is not a one-for-one overlap between high pay and high income and low pay and low income. Some low-income households will have higher-paid individuals in them, but because of having a large family or having only one earner rather than two, they will still end up in that low-income category. That caveat aside, it is still the case that any measures that improve working lives for low-paid workers will have the biggest impact on lower-income households.

There are questions about what the knock-on effects are going to be. If you were really optimistic, you might say that some of these measures to improve job quality could even have a positive labour supply effect. We know that, in the 2010s, that was a big driver of improved income at the bottom and massively increased employment among low-income households. So an optimistic take on these measures might be that you could trigger some of those kinds of effects, but that is much more uncertain.

[Chris Murray (Edinburgh East and Musselburgh) (Lab)]

Q Could you say more about the impact of the current system of zero-hours contracts on the individual and, more broadly, on the wider economy and the labour market? I am thinking about poor retention, disengagement and the impact on the benefits bill. How does that system affect the economy currently?

Nye Cominetti: That is a tricky question. If measures to tackle zero-hours contracts are put in place effectively, I think that they will mainly smooth the income of those individuals rather than necessarily raise their level of pay. There might be a knock-on impact on the level of pay if workers have better outside options and can more readily bargain for pay increases or shop around for jobs, but the first effect that you would hope to achieve through these measures is smoothing pay—taking away the volatility from week to week. There is plenty of evidence that that is the element of those jobs that households struggle with most, not the level of hourly pay.

We know that, through minimum wage action, we have massively improved earnings for the lowest-paid workers, but it is the volatility that is most difficult to deal with, as I think anyone sitting here would readily agree. If someone is thinking, “Next week, my pay might go down by 20% or 50%, or maybe my hours will be zeroed down entirely,” it does not take much for us to imagine the impact of that not just on their wellbeing and psychology, but on their spending decisions. They might think, “I can’t afford to commit to that spending now, given that I’m uncertain about what my pay is going to be next week.”

If these measures are done well and genuinely smooth the incomes of those experiencing the worst volatility, I would expect improvements in individuals’ wellbeing. Potentially—again, more optimistically—you might see knock-on positive effects on the economy more broadly, if people feel more comfortable spending because they know what their pay is going to be in future. But as I have said a few times, that is definitely much more uncertain.

Employment Rights Bill (Fourth sitting)

Debate between Chris Murray and Steve Darling

Committee stage
Thursday 28th November 2024 Public Bill Committees

[Chris Murray (Edinburgh East and Musselburgh) (Lab)]

Q Margaret, I have a question for you, specifically about the Gangmasters and Labour Abuse Authority. It strikes me that a lot of our discussion is about things like zero-hours contracts and wage enforcement, but the GLAA deals with a different set of labour market challenges: the excluded or isolated groups, such as shellfish workers, or the victims of modern slavery. It is a first responder to the NRM—the national referral mechanism—so it has a different set of responsibilities.

First, what is your assessment of how effective the GLAA has been, given how it was constructed, and how has it been able to perform its functions? Secondly, specifically on modern slavery—thinking about those the GLAA was set up to protect, such as the Morecambe Bay cockle workers—how do you see those functions working in a single enforcement body?

Margaret Beels: It is really important that, in setting up the new body, the three bodies sit down to think about what they do well, so that when we bring them together, we will bring the best of what is done. One of the recommendations in my most recent strategy is to encourage them to start the dialogue with each other at every level—so what an inspector from, for example, the Employment Agency Standards Inspectorate does when they go out, versus what is done when a compliance inspector goes out from the GLAA.

I gather a lot of evidence from stakeholders, and they will say, “This works really well here,” or, “That works really well there.” In informing the fair work agency, there should not be a presumption that something will always be done one way because that is done by this lot; instead, we should look at the journey of non-compliance. It is important to help businesses to be compliant; that is, by far, the best way to achieve compliance.

Who is good at doing the communication with businesses, then? The national minimum wage team do that as well—they have their geographical compliance approach and they try to go out to help business. How do we build that into the structure of what is done? When it comes to deliberate non-compliance and modern slavery, you need to have the teeth to deal with that. The modern slavery dimension will move across into the fair work agency, but then it will have the whole spectrum of looking at how things are done.

Resources will be important to the fair work agency. All the bodies will talk about the fact that they do not have the resources that they would like to do the full job that they are there to do. I go back to challenge them: “Can you show me the value for money in what you are doing? Are you being as efficient as you might be?” My strategy talks about the use of artificial intelligence—are they building those tools into how they do things, so that they can have the maximum efficiency possible? Then, as they come together, will they listen to each other to make sure that they pick the best?

[Steve Darling (Torbay) (LD)]

Q I experienced a conversation with sixth-formers in Torbay who were sexually harassed in the workplace. I would welcome your thoughts on how the Bill could be strengthened so that it is supportive of employers in their support for people who experience such a situation.

John Kirkpatrick: We start from the position that everyone has the right to a workplace in which they are free from the risk of discrimination or of harassment. In our view, that ought to be the way it works. We have lots of evidence, as I am sure you and other Members have from your constituents. For example, from our “Turning the tables” report, we know that a quarter of respondents had been harassed by third parties in the workplace. That is a particular issue for people in customer-facing roles.

It was interesting to hear Margaret talking about sectors that are vulnerable to exploitation. Some of those where we have found vulnerability—[Interruption.]