Labour’s contract killing

Earlier this week, I was offered a contact. Which, sadly, doesn’t happen as often as my bank manager or my family would like. And, in any case, there wasn’t any money involved. At least, not for me.

On the plus side, the contract was offered to me by none other than the leader of the Labour Party, Ed Miliband. Yes! Me and Ed, bound together by a contract signed in brotherly blood. Well, me, Ed and a few thousand other people. Maybe tens of thousands. Quite a lot of brotherly and sisterly blood, then. Ed might need a transfusion.

As contracts go, it’s quite short – just ten brief clauses, each one a policy pledge by Ed. And, being a workplace rights nerd, I was pleasantly surprised to find that no fewer than three of the pledges relate to workplace rights. However, the wording of those three clauses left me with both a sinking feeling in my stomach, and a strong desire to bash my head against the nearest wall. Let’s take each of the workplace rights pledges in turn.

Ban exploitative zero-hours contracts

Well, I’ve already written elsewhere about Labour’s fumbling towards a credible position on the exploitative use of zero-hours contracts, so I’m not going to add much here. Suffice to say, Ed and his team are going to have to wake up to the fact that, whilst it’s very easy to make speeches criticising the exploitative use of zero-hours contracts, in practice (and in law) it is not so easy to distinguish between the exploitative and the fair use of such contracts. The very same paper zero-hours contract could be used entirely differently by two separate employers – one in a way that benefits both the employer and the employee, and one in a way that benefits only the employer and simply exploits (and quite possibly brings severe hardship to) the employee. That’s a conundrum that won’t be solved by sloganeering.

Make work pay by strengthening the Minimum Wage

Well, yes, but what does ‘strengthening’ the NMW actually mean? In the hope that someone in Labour might provide an answer, earlier this week I put the question out on Twitter. And Antonia Bance – a former Labour parliamentary candidate – promptly responded by suggesting that it means “raising & enforcing [the NMW]”.  Well, yes, but raise it by how much, and better enforce it how? To which Antonia’s response was: “I don’t think we ‘ll know the answers to questions of detail unless Labour get into government”, and “broad promises that show direction of travel & values are thought more effective than detailed pledges”.

So it would seem. But to my mind, the votes of the more than one million workers paid at or just above the NMW rate are much more likely to be captured by a specific promise of a new, higher rate than they are by a ‘broad promise showing direction of travel’. George Osborne is on record as saying he believes Britain can ‘afford’ a rate of £7.00 per hour, without any significant negative labour market consequences, and if George Osborne thinks that then it’s surely not too much to expect a Labour government elected in May 2015 to go at least that far. Furthermore, from £7.00 per hour it’s really not that far to the Living Wage rate (outside London) of £7.65 per hour. So why not make an explicit commitment to an immediate hike in the NMW rate to £7.00 or even £7.50, and to achieving parity with the Living Wage by 2020?

Yes, that would imply making the Low Pay Commission redundant. But perhaps the Commission’s budget would be better spent enforcing the NMW, rather than just talking about it and (mostly) recommending below inflation increases. Government ministers routinely make decisions with far greater economic implications than what the NMW rate should be, and the long-term future of the NMW rate could be secured by writing into legislation an annual uprating at least as great as inflation. It’s really not rocket science.

Tackle the abuse of migrant labour to undercut wages, by banning recruitment agencies that only hire foreign workers

This is the one that really made me want to bang my head against a brick wall. For, leaving aside (for Jonathan Portes and others) the question of whether migrant labour does actually  ‘undercut wages’, the proposed ban is so patently nuts that this clause of Ed’s contract looks like nothing more than a shameful case of dog-whistle politics. Because, if hiring only foreign workers were to become illegal, what proportion of indigenous workers would a recruitment agency have to hire to be legal? One per cent? Ten per cent? Fifty per cent? Fifty-one per cent?

And, were any such arbitrary figure to be (foolishly) enshrined in law, who would police it? Under the Coalition, the BIS Employment Agency Standards Inspectorate has been reduced to a rump of just two inspector-level staff. Would Ed’s contract deliver any more human and other resources for enforcement of new (and the existing) rules?

Again, earlier this week I put these questions out on Twitter, in the hope that someone in Labour might be willing to provide some answers. When they didn’t, I put my questions direct to John McTernan, the fearsome Labour thinker and strategist with the self-appointed task of keeping Tony Blair’s halo shiny and bright. And, whilst first noting that he is “not my brother or sister’s keeper”, John was frank enough to say: “I think there are worse things than foreign workers. Like non-enforcement of [the] NMW”. Hear hear to that.

So, I will keep on posing these (and other) questions, in the hope that someone in Ed Miliband’s team might stop and think these silly contract promises through before they find their way into the manifesto for May 2015. Because, to my mind, that would be a serious mistake that might just blow up in some shadow minister’s face at some point during what is clearly going to be a tough and dirty election campaign. Or maybe Antonia is right when she says the party manifestos “will be meaningless this time because of possible coalition”.

Now that really is a depressing thought.

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