Economic Justice Commission

Siobhain McDonagh Excerpts

Tuesday 11th September 2018 Westminster Hall

[Siobhain McDonagh (Mitcham and Morden) (Lab)]

Thank you, Mr Hollobone; it is a pleasure to serve under your chairmanship. I reassure you that I will not talk for 10 minutes. I congratulate my right hon. Friend the Member for Birmingham, Hodge Hill (Liam Byrne) on securing this particularly important debate and on his mind-blowing speech.

I welcome the final report of the Economic Justice Commission and, in particular, its recommendations on the reversal of this Government’s damaging decomposition of workers’ rights. This decade is forecast to be the weakest decade for average real earnings in 200 years. One in 10 workers is said to be in insecure work. Many of my constituents tell me of employers who impose restrictions, withdraw hours and refuse their workers rights, without their having the status of an employee in return. Meanwhile, there are almost 1 million people on zero-hours contracts, with the toxic combination of falling real wages, frozen benefits and insecure work resulting in 8 million people in working households living in 21st century poverty. Given this reality, it is heartening to read the report’s notable strong stance for workers’ rights, hard-wiring justice into our economic system as opposed to treating it as an afterthought.

Over recent weeks, I have seen at first hand the urgent need for many of the report’s workplace recommendations. I place on record my ownership of a single Sainsbury’s share—a golden ticket to attend its annual general meeting. This is an organisation that goes against recommendation after recommendation in the report. All Sainsbury’s shop floor staff are currently in the final stages of a consultation over new “sign or resign” contracts that will slash the salaries of 9,000 of its most longstanding and loyal members of staff. They will lose their paid breaks, their Sunday premium will be removed, the night shift will be shortened and their bonus scheme will go.

Some Members may argue that that is an unavoidable cost-cutting exercise for a key player in the struggling retail sector. Sainsbury’s argues that it is an exercise in fairness, to ensure that all colleagues doing the same role are paid the same. But I argue that the organisation simply shows no regard for its lowest paid staff. Although he scrapped the bonus scheme for shop floor staff, chief executive officer Mike Coupe has just taken home a £427,000 bonus as part of his £3.4 million pay packet—and we wonder why he sings about how he is “in the money”.

Many of those staff have shown decades of dedication to the organisation. While their salaries crumble, their bills, mortgages and rent at the end of each month remain the same. Take Paul, a 53-year-old staff member of 29 years who this week resigned from his role upon facing a £1,300-a-year pay cut. He describes himself as angry and upset that his loyalty has been sacrificed for the company’s profits. We met the Minister last week to discuss Sainsbury’s and the wider issues with such “sign or be sacked” contracts.

I have no qualms about those at the top being well paid, but I call for consistency, fairness and parity, and for the importance of the contribution of those at the top to be recognised in tandem with that of those at the bottom. As the IPPR report states, remuneration committees should contain elected worker representatives who decide the pay, incentives and conditions of all company staff in one whole-company pay policy. It would be really hard for people to agree to a £500,000 bonus for the chief executive officer if they knew that would mean cutting the take-home pay of the people at the bottom.

The need for such a policy becomes all the clearer when we consider exploitative “pay between assignment” contracts. In theory, such contracts are a sensible proposal, under which agency workers are guaranteed a basic level of pay between assignments and while they are out of work. However, in reality, workers are often kept on those lower paid contracts even when they are in the same job for years on end with no such gap between assignments. Such exploitative contracts can and must be prohibited, and I would be grateful if the Minister addressed the recent consultation on ending them. I congratulate BT and the Communication Workers Union on working together to end them in the near future, which will lead to an increase in the take-home pay of 1,200 call centre staff. I would also be grateful if the Minister told us what the Government’s response is likely to be to the recommendations of the Taylor report on work and the gig economy.

The Economic Justice Commission proposes putting fairness at the heart of the economy, because that would make it perform better and improve the lives of millions of people. Who would have thought it?