Taylor Review of Modern Working Practices

Paul Scully Excerpts

Wednesday 19th January 2022 Westminster Hall

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Paul Scully)]

It is a pleasure to serve under your chairmanship, Mrs Cummins. I congratulate the hon. Member for Slough (Mr Dhesi) on securing today’s important debate.

Despite what we have heard, the UK still has one of the best employment rights records in the world. We have one of the world’s highest minimum wages; it was increased on 1 April last year and will be increased again next year. The UK’s national living wage is one of the highest minimum wages in the world—larger than those in similar economies such as those of France, Germany and Japan. In the UK, we get over five weeks of annual leave, minimum, whereas the EU requires only four weeks. In the UK, people get a year of maternity leave; the EU minimum is just 14 weeks. The world of work is changing, and continues to do so.

[Andy McDonald]

How does our statutory sick pay compare with that of our European competitors?

--- Later in debate ---

[Paul Scully]

I will come to statutory sick pay in a second. We know that sick pay needs to be looked at, and we will look to do so. During the pandemic, rather than concentrating on a consultation on sick pay, we decided to look at welfare benefits to provide extra support. None the less, the hon. Gentleman is right. Sick pay needs to be worked on, and we will continue to do so.

Advances in technology, the emergence of new challenges and a rise in new business models means how, when and where people work is adapting. That is why, in October 2016, the Government commissioned Matthew Taylor to lead the independent review of modern working practices. The review considered a range of topics relating to the labour market of 2016. It played an important role in shaping our understanding of how the labour market worked and how employment legislation could be upgraded to take account of the rise in modern employment models and new forms of work.

As the Minister for Business and Labour Markets, understanding those trends in the economy is key to shaping my priorities for reform to the employment rights framework. Independent reviews such as the Taylor review played an important role in laying the groundwork for our ambitious programme to make the UK the best place to work and grow a business and ensure that the UK labour market continues to thrive in the future.

As I am sure the hon. Member for Slough will agree, the 2017 review was comprehensive and wide-ranging, as we have heard today, although it did not go far enough for some on the Opposition Benches. It included topics covering a broad spectrum of employment law and employment practice, including the enforcement of workers’ rights, labour market flexibility and support for vulnerable workers; looked at ways that we can improve our regulatory framework around employment rights to make sure that the support provided to businesses and workers was keeping pace with changes in the labour market and the economy; and considered the impact of labour market changes, and how best to ensure we can retain flexibility in the future, while equally ensuring workers have access to the rights and protections they deserve.

I am grateful to Matthew Taylor for his work in providing valuable evidence for shaping our ambitious programme to build a high-skilled, high-productivity, high-wage economy that delivers on our ambition to make the UK the best place in the world to work and grow a business.

[Ian Lavery]

The Minister is praising the Taylor review and its recommendations, so why have the Government only legislated for seven of the 53 recommendations since 2017?

[Paul Scully]

I will come to what we have done and what we intend to do in just a second. I highlight the words of my right hon. Friend the Member for Basingstoke (Mrs Miller): quite a lot has happened since. She is right to say that the Government have been busy and that parliamentary time has been precious, but the nature of work itself has significantly changed since that point.

The hon. Member for Aberdeen North (Kirsty Blackman) spoke about the right to request flexible working from day one. She is right to focus in on that. It is a key area, not just for the idea of flexible working, but for people who have caring and parental responsibilities and other pressures on their life outside work, so it can have a significant impact on other areas that we want to tackle. We have been able to take the opportunity throughout the pandemic to reflect on the changing nature of work, which will extend beyond the pandemic, as we move towards endemic covid and a sense of normality, and being able to reflect on what flexible working might look like at that stage, rather than what it did look like and what our ambitions were, back in 2016. We want to make sure that we can take the necessary steps for our labour market.

[Mick Whitley]

We tend to blame everything on the pandemic. Zero-hours contracts were here before the pandemic. All that has happened is massive exploitation of zero-hours contracts. The Government cannot turn a blind eye and turn round and say, “It’s the pandemic”, because it is not.

[Paul Scully]

Actually, what we are saying about flexible working is not about blaming the pandemic. Work has changed. The hon. Gentleman talks about zero-hours contracts—they have changed somewhat as well. The flexibility of the workforce—the people who have been feeding us, caring for us and moving us around—has really shone a light on that.

[Justin Madders]

I am grateful to the Minister for giving way; he is getting intervened on a lot this morning, which shows the level of interest. His comments on how work has changed during the pandemic are interesting. It is true that people have been working from home for years and years—it is just that there has been a lot more of it. What we want from the Minister is a date by which the rest of the recommendations will be implemented.

[Paul Scully]

I will come to that.

Another core part of the Taylor review was to find new ways of opening up the labour market, so that more people can enter it and then remain in work. That is exactly what our vision is: to continue to level up across the country and allow more individuals to participate in work than ever before.

That is why we committed in our manifesto to bring forward new rights for parents of babies who require neonatal care and new rights for carers’ leave for the 5 million people across the UK who provide unpaid care by looking after an elderly or disabled family member, relative or friend.

However, as the review itself notes, the themes it covers are complex and the regulatory framework is based on decades of case law. Its recommendations therefore cover a wide range of proposals, from relatively small changes that can be made immediately, such as the key facts page for agency workers, to recognising longer-term strategic shifts in the labour market, for example by establishing the single enforcement body. We have always made it clear that it is important to consult as widely as possible and to take time to consider how best to achieve the change that works for everyone in the labour market, including employers. But clearly we want employees to be in good work; that is at the heart of that process.

We have consulted on a number of proposals for reform and on themes raised in the review. Wherever possible, we have worked closely with stakeholders so that they have an opportunity to share their views. I am proud to say that we have continued to take decisive action since the publication of the review, in order to implement many important changes to the labour market.

Our record speaks for itself. We have closed the loophole whereby agency workers were employed on cheaper rates than permanent workers. We have quadrupled the maximum fine for employers who treat their workers badly. We gave all workers the right to receive a statement of their rights from day one. We have increased pay for around 2 million workers. We have introduced key information documents to ensure that those seeking temporary work have all the facts that they need up front. We also brought into force Jack’s law, a world-first piece of legislation that provides statutory leave for parents who suffer the devastating loss of a child.

Those actions have made a real difference to the lives of workers up and down this country. We have benefited from expert input from stakeholders, and great consideration was given to ensure that those actions work for employers and workers across all sectors in our economy. Those actions have also given individuals and employers the freedom to agree the terms and conditions that suit them best, while also enabling businesses to respond to changing market conditions.

The results speak for themselves. We have seen high employment rates, reaching a record high of 76.6% in February 2020, and workers enjoying real pay increases month after month. We have seen a wealth of job opportunities, which is a testament to the excellence of UK businesses’ ability to grow, innovate and create jobs. We have also increased participation across groups who had typically been under-represented in the labour market, with women and workers from ethnic minority backgrounds now making up a larger proportion of the workforce than ever before.

However, as I have said already, we need to take stock of how the pandemic has affected businesses and workers up and down the country before continuing to build on that record, because the past two years has seen a level of disruption to the economy that the Taylor review just could not have predicted. However, we have acted decisively to provide an unprecedented package of support to protect people’s livelihoods.

The coronavirus job retention scheme has helped 1.3 million employers across the UK to furlough 11.6 million jobs, as my right hon. Friend the Member for Basingstoke highlighted, and more than £27 billion has been spent on helping the self-employed through five self-employment income support scheme grants, supporting nearly 3 million self-employed individuals.

I absolutely take the point that we have not been able to protect every business and every job or livelihood. There are certainly people—including some who I have spoken to and heard from, and who I continue to listen to—who have not been able to be supported throughout the pandemic as they would have liked to have been.

However, as I have said, in April last year we again raised the national minimum wage and the national living wage, giving around 2 million people a pay rise. We have also lowered the age threshold for the national living wage to 23, ensuring that even more people have the security of a decent wage, and we plan to reduce it further to 21, in order to tackle the barrier that the hon. Member for Aberdeen North talked about, by 2024 to support younger workers.

We continue to adapt our employment framework to keep pace with the needs of today. We legislated so that parents benefiting from the job retention scheme do not lose out on statutory maternity pay or other forms of parental pay. That has meant that new parents could take time off to spend with their babies without losing out financially just because they had been furloughed.

We have enabled workers to carry over more annual leave during the pandemic and we conducted a review of how victims of domestic abuse can be supported in the workplace, setting out the impact that domestic abuse has on victims, the challenges that it raises for employers, and what best practice to deal with domestic abuse looks like. At every step of the pandemic, the Government’s aim has been to protect jobs and livelihoods and to support workers’ rights.

[Ian Lavery]

Will the Minister give way?

[Paul Scully]

I will not, just for a second.

As our economic recovery gathers momentum, I am determined to continue with our work to build back better from the pandemic, and to build the high-skilled, high-productive, high-wage economy that will deliver on our ambition to make the UK the best place in the world to work and grow a business. We will do that by continuing to champion a flexible and dynamic labour market while maintaining the UK’s excellent record on workers’ rights.

Future reforms will continue to open up the labour market so that more people can enter and remain in work, and will continue to protect those most in need, including those in low-paid work and the gig economies. Future reforms will take a smarter approach to the enforcement of employment law: we want to make it easier for good businesses to comply with their obligations, while ensuring a level playing field through effective enforcement against those who cut corners and exploit workers. Future reforms will also continue to support the UK’s dynamic labour market by increasing flexibility, creating the conditions for new jobs, and building on our wider record on the national living wage and national minimum wage.

A number of issues have been raised today, which I will address quickly. I have talked about sick pay; we still need to retain flexibility within the economy, so we will not place a blanket ban on zero-hours contracts. However, we have done a lot of work on exclusivity, and will do what we can about the issue of people not having predictable hours. We want to allow people to change to a predictable contract along the way in their employment, when that should be the case. Turning to employment status, we believe that the status that we have at the moment is the right way to go forward. However, we recognise that there are employments outside of that status, and want to make it easier for individuals and businesses to understand what rights and tax obligations apply to them. We are considering options to improve clarity around employment status.

Obviously, the end of this Session is coming up—in a couple of months’ time, I am guessing—and we will see when parliamentary time will allow us to bring forward employment measures to tackle all these issues and more, in a way that will address the Taylor review and the changing flexible work market that continues to develop beyond the pandemic. We must make sure that we continue to make this country the best place to be able to work. I thank the right hon. and hon. Members who have put forward constructive ideas today for how we can continue our record of establishing an employment framework that is fit for purpose and keeps place with the needs of modern workplaces.