In the context of a cost-of-living crisis and likely recession, workers employed in low-wage, unstable jobs with poor working conditions are likely to suffer disproportionately, thus exacerbating existing inequalities. Stephen Timms is the Labour Member of Parliament for East Ham and currently chairs the Work and Pensions Select Committee. In this Q&A with Bea White, he discusses the main flaws in the current system of workers’ benefits and rights and how policy in this area can be improved.
The discussion around pay often focuses on gross hourly wage. How can we move towards a more holistic concept of job quality, that takes into consideration aspects such as sufficiency, flexibility, and security?
We haven’t really got a well-established definition of job quality. I think the definition that Kirsten Sehnbruch has come up with is a good contribution to the discussion in terms of the particular combination of factors chosen. This allows us to see how the UK compares with other countries on job quality and what we can do to improve the quality of jobs provided at the moment in the UK.
How should policymakers be responding to this?
Labour have published its “New deal for workers” which is a package that talks about enforcing safe and healthy workplaces. It recommends a single enforcement body to protect workers instead of a pretty fragmented arrangement we have at the moment. We want to strengthen the law to enforce workplace rights, update trade union legislation, and improve family-friendly rights and entitlements. So, it is quite a broad programme that I think is needed to provide the improvement that people are entitled to.
There seems to be a particularly pressing need to clarify the status of gig workers and the rights they are entitled to. Why has this proved so difficult?
After the Taylor Review, which looked at these issues in 2017 and recommended changes, the government said it would bring forward an employment bill but 6 years on there’s still no bill. So the government recognises the importance of doing it, but they have failed to get round to it.
The need for these changes is particularly well illustrated for me by the experience of how difficult it is to get gig economy workers signed up for a pension. The Government has legislated to give auto-enrolment to a pension. Many of those working in the gig economy should have that opportunity, but in practice they don’t because their employers say “well the law isn’t very clear”.
We need an employment rights bill so there can be no further hiding behind legal ambiguity, and to provide people with the rights they’re entitled to.
The Uber case went to the Supreme Court, and the court determined that Uber drivers have that right and in practice they do now have it. It’s been delivered for Uber but not by Uber’s competitors nor many others in the gig economy.
We need an employment rights bill to make the position clear so there can be no further hiding behind legal ambiguity, and to provide people with the rights they’re entitled to. If elected, this is something Labour would bring in within the first 100 days. Because we know that these organisations or these companies otherwise merely sign up to these things on a voluntary basis.
How do you see the current relation between gig workers and trade unions? Are reforms needed somehow to reflect changes to the nature of employment models today?
Well, the successful case at the Supreme Court on behalf of Uber drivers was taken forward with the support of the GMB. And after Uber lost that case, there was a pretty significant change of heart, I think, on the part of the management of Uber and one element of that was that they agreed to recognise the GMB as the trade union for Uber drivers.
And I think to begin with there was a fairly low rate of take up of union membership amongst Uber drivers. But the GMB has said that now large numbers of Uber drivers are joining the Union. I think there’s been a similar agreement between Deliveroo and the GMB. So we are seeing progress being made.
I think there’s no doubt that we do need to update Trade Union legislation that would be part of an employment rights bill to make sure that gig economy workers do genuinely have the opportunity to join a trade union, and indeed to help other workers with trade union access as well. Progress being made – but we need a lot more of it.
You have worked on pensions policy in opposition and under the previous Labour government. How do you asses the progress that has been made in this area? What policy changes need to be brought in to improve remaining inequalities?
Auto-enrolment was brought in on a cross-party basis and it’s been a big success. And the great majority of people who are auto-enrolled by their employer into a pension stay in that pension and the number of people opting out, which people are perfectly entitled to do, is actually very small. People are recognising the value of pension saving and are sticking with it.
People are recognising the value of pension saving and are sticking with it… But they’re not saving enough
But they’re not saving enough, unfortunately, at the moment. The employer contributes 3 per cent of salary, the employee contributes 5 per cent. That’s a total of 8 per cent. Now the old-fashioned defined benefit pensions were often 15 or sometimes 20 per cent or more. So it’s not surprising that if you only save 8 per cent you’re going to end up with a lower pension than many people think they are going to need.
But there is a big problem about pension saving among self-employed people. The proportion of self-employed people saving for a pension has drastically fallen, over the last couple of decades during a period when auto-enrolment means that employees are much more likely to be in a pension than they were before. We’ve suggested a way that self-employed people could be auto-enrolled using the national insurance system or the tax system. The government so far has said that they’re not interested in pursuing that but I think that is something that needs to be looked at very carefully.
There is also the big problem of the gender pensions gap. It’s a big gap and there’s a lot that needs to be done to tackle it. One issue is that at the moment there are lots of women who’ve got more than one job, for which they earn less than £10,000 a year and therefore they’re not auto-enrolled on the basis of any of their jobs even though their total income is well over £10,000. We think auto-enrolment should be changed so that if your total earnings are more than 10,000 then you’re auto enrolled rather than if your earnings from any one employment is above 10,000 a year. That would help, but there’s lots more that needs to be done.
When it comes to engaging citizens in shaping policy that affects them in these areas, what democratic changes or initiatives would you like to see?
London Citizens was set up in 1997 and it’s been a very remarkable initiative. The idea is to bring in people from trade union branches, from community organisations, from faith groups, from churches and mosques and synagogues… in large numbers. They hold politicians to account – they always do a very big event during the London mayoral election, for example. But they’ve also done some really interesting work just bringing people together talking about the difficulties they’re facing in their lives and what might be done to improve things and it was out of that kind of discussion that the idea for the living wage emerged, and the London living wage. Of course, the term has been adopted by the government in its national living wage which is really just the national minimum wage but set a bit higher than it used to be.
But the living wage increasingly has been taken up by employers. Lots of employers now want to be accredited as London living wage employers. That’s made a big difference to a lot of people working in my constituency. I’ve talked for example to cleaning staff at the Olympic Stadium, now used by West Ham football team. They spelt out for me just what a boon it would be if they were paid the living wage for their work and they now are and that’s thanks to the success of the campaigns that London Citizens has led.
These questions were discussed at an LSE panel event in November, at which a new methodology to measure multidimensional poverty to the labour market, using the UK as a case study, was presented. For more information or to watch the recording of the event, visit: Good jobs, bad jobs in the UK labour market (lse.ac.uk)