When Matthew Taylor, chief executive of the Royal Society of Arts, was appointed last year by Theresa May to lead a review of modern employment practices, he said it would be “really important to get out and listen to people”, as opposed to merely crunching data and numbers.
Let us hope he has listened to some of the same people as Frank Field, the former chair of the work and pensions committee. Field’s latest report from the frontline of the gig economy told some depressing, if by now familiar, stories. Workers can be forced into forms of self-employment against their will. Contracts can offer effective wages of less than £2.50 an hour and be enforced with threats of fines or loss of work.
Field’s latest report drew on accounts from workers at Parcelforce, DPD and British Car Auctions but it echoed the findings of his earlier work, including the original review that prompted May to appoint Taylor. In the coming days the Taylor report will be published and it will present the first test of the Conservatives’ manifesto promise to “make sure that people working in the ‘gig’ economy are properly protected”. What should it say?
The first task is to end the absurdity of bogus self-employment. This employment category is plainly being abused by some companies whose workers continue to be told how to behave like regular employees for all practical purposes – their work can be directed down to exact details, including time, hours, place and uniform. The only real difference is that the employer is able to avoid paying employers’ national insurance and pension contributions, and offering protections such as maternity and sick pay. It’s a scam. Massive benefits accrue to the employers and very few to the workers.
The best solution is backed by the TUC and Field: reverse the burden of legal proof so that companies must demonstrate that someone is not an employee. To expect workers to go to an employment tribunal, or even a court, to establish normal employment rights is unfair and impractical. Taylor could propose a fast, simple and transparent system for assessing self-employed status. The current system is either a muddle, or an invitation to unscrupulous companies to see what they can get away with.
A second area is more contentious. It seems unlikely that Taylor will propose abolishing zero-hour contracts because, in some cases, their flexibility benefits both sides. That will not be universally popular, but it would be a realistic position. But Taylor could – and should – establish the principle that companies should pay a premium for flexibility. In regular work that is paid by the hour, companies expect to pay overtime. The same approach would also operate with zero-hour and short-hours contracts: contracted hours would be paid at a standard rate and anything on top would attract a higher hourly rate. As the TUC has argued, such a system would also “create a financial incentive for employers to reduce their reliance on insecure forms of work”.
Third, Taylor must ensure that proposals to promote the “workers’ voice” within companies mean something substantial. The prime minister has an appalling record of obfuscation in this area. She promised to put workers in boardrooms but then watered down the idea to say an existing non-executive director could represent them.
If Taylor wants to establish German-style “workplace citizenship” in the UK, he must set out the practical steps. In the gig economy, a blast of old-fashioned collective bargaining could do more to improve the lot of workers than technical tweaks to current employment laws. Andrew Haldane, chief economist at the Bank or England, was right when he argued last month that a period of “divide and conquer” has left workers in the UK less able to bargain for higher wages. Taylor must avoid May’s wishy-washy approach and acknowledge that the best people to represent workers’ interests are workers themselves.
Power on with Hinkley: but then it’s time to rethink energy strategy
It was always a case of when, not if, Hinkley Point C went over budget and over schedule. But EDF’s admission last week that its new nuclear power station in Somerset risks costing as much as £2.2bn more than its original £18bn price tag, and coming online 15 months late, is still staggering.
The French state-owned firm has been planning the project for years, so such a significant hike at such an early stage does not bode well for future delays and cost increases. Nonetheless, Hinkley Point C should go ahead. A huge amount of work has already been done, and the project brings billions in investment and thousands of jobs to a corner of the country that needs it. It will also provide 7% of the UK’s electricity and help Britain hit otherwise impossible carbon targets.
But the case for a new fleet of nuclear power stations beyond Hinkley – already highly debatable before this week – looks increasingly weak. None looks able to tackle with sufficient urgency the UK’s challenges of energy security and cutting emissions in the 2020s.
The project that seemed closest after Hinkley, Moorside in Cumbria, is now among the walking dead after its reactor vendor went bust and one of two key investors sold its stake.
Plans for new reactors at Wylfa in Wales, backed by Japan’s Hitachi, are the next closest along the road, but the Horizon project still needs to raise huge sums of capital. The Japanese and UK government are considering taking a public stake, although the move would put taxpayers on the hook if it suffers budget overruns, like Hinkley.
China wants to build a new nuclear power station at Essex but would face at least four years of clearing regulatory hurdles before it could even begin.
Less than a fortnight into his new job, energy minister Richard Harrington said the UK still needed new nuclear. But it’s not too late for officials to say no, minister.
The future of British power is in wind, solar and gas, energy efficiency, smart grids and the sort of enormous battery plant Elon Musk has revealed Tesla will construct in Australia. Hinkley should be the last nuclear power station the UK ever builds.
Ashley’s booze claims fail to dilute Sports Direct’s value
Is this the sort of boast you want to hear from your chief executive? “I like to get drunk, I’m a power drinker. My thing is not to drink regularly, it’s to binge drink.”
The speaker, of course, was Sports Direct’s Mike Ashley, in the high court last week where he was defending claims that he agreed to pay a banker £15m during a drinking session in a London pub.
The case continues, but here’s the remarkable fact: while Ashley was describing his boozing habits, Sports Direct’s share price barely moved. There was no loss of confidence in the company – or, at least, no fresh slump after last year’s revelations about working practices at its Shirebrook warehouse.
Actually, it’s not so remarkable. Share prices move when facts emerge that differ from expectations. Ashley’s boozing is no secret. Investors know what they’re getting: a boss who owns more than half the shares and doesn’t care what they think.
