How the Tories can redeem themselves in the eyes of the self-employed

Private members’ bills don’t normally make for exciting reading. They give MPs and peers a chance to let off steam if they have a bee in their bonnet, and more importantly to lay down fairly cheap political markers. Most sink without trace, since the government through its control of the Commons legislative timetable has an effective veto. But some are worth a second look. One such is Lord Hendy’s Status of Workers Bill, which got its second reading in the Lords last Friday.

Currently, businesses love the idea of designating as much of their payroll as possible as self-employed independent contractors rather than employees. And not surprisingly: it saves them the problems of PAYE, providing such things as sick and holiday pay, following employment laws and looking after such people as employees expect. Workers might of course see things differently. But that’s the gig economy for you: now, do you want the job or not?

Earlier this year the Supreme Court made life a tad more difficult for such employers when it told Uber that if the nitty-gritty of its drivers’ obligations smacked of employment, then the relation between them and Uber could not be morphed into self-employment by the flick of a well-paid lawyer’s pen. But the reverse was only partial: by judicious draftsmanship companies can still introduce just enough flexibility to push the relationship over the line away from employment.

That is what Lord Hendy’s bill would stop. Under it, essentially anyone in regular work who was not obviously working on his own account, like a jobbing window-cleaner or gardener, would be an employee. It wouldn’t matter what his contract said; he would be a worker automatically entitled to all the protections that entailed. As you might imagine, this is a Labour peer’s bill, and most of its support is Labour or cross-bench. Interestingly, however, three Tory backbenchers (Lords Blencathra, Holmes and Balfe) have also spoken powerfully in its favour.

They are to be commended. Although its official spokesman in the Lords, Lord Callanan, was less enthusiastic, the government should give serious thought to backing this bill, either by taking it over or by undertaking to introduce their own version.

Why? For one thing, it does the right thing by workers. True, government has every reason to promote self-employment and setting up in business on one’s own. But these are undeniably risky matters, and by no means everyone is fitted for them. When delivery and other companies whose employees are not natural entrepreneurs try to penny-pinch on the payroll by dressing up their workforce as a gang of enterprising sub-contractors when in plain English they are nothing of the sort, any decent government, whether Labour or Tory, is under a duty to frustrate their efforts.

Secondly, the government needs to send voters an unambiguous signal about the direction of its post-Brexit employment policy now we have broken free from the coagulated mass of sclerotic European labour laws. This is a perfect opportunity to promote the prospect of a respected, well-paid, well-trained workforce in the tradition of, say, Switzerland or Norway. This is why people voted for Brexit: they did not choose to leave the EU to give a licence to employers to fleece their workforce by treating it as a collection of contractors whose services could be dispensed with when not required.

Thirdly, many of the the benefits of this bill would flow where the Tories need them to go. Many better paid white-collar workers in the south have not suffered too much during the pandemic. By contrast, precarious gig economy employment has disproportionately affected younger, less established and more ill-paid workers, many of therm in the much less prosperous red wall seats in the North. Recently there have been backbench murmurs, especially from a number of the new Tory MP intake of 2019, that the north has been missing out on the economic recovery after Covid. This is a golden opportunity to get in some genuine levelling-up.

Swinging behind the Status of Workers Bill would also help the Tories alleviate a number of other difficulties. It would do them immense good to be seen to come out fighting as the supporters of the ordinary worker against over-mighty and at times dodgy employers, while decently burying the disaster of their long-term care proposals, which have come across seen as a tax on the jobs of the not-so-well-off to fund the lifestyles of the comfortable.

They would also get the chance to deal with some serious instances of reputational unfinished business. One is their supposed doctrinaire attachment to the free market, which is more widely believed and corrosive than many MPs realise. An open preparedness to override contracts of employment where they clearly aim to deprive workers of protections other workers get would work wonders in dispelling this myth. It would promote the party as it should be: pragmatically supportive of non-interference, but neither atavistic nor doctrinaire about it. Another is the still widespread view of the Tories as the party that can always be nobbled by a murmur from big business in a minister’s ear. A firm but polite statement to employers that the abuse of self-employment to the detriment of their workers is unfair and unacceptable will do a lot to get rid of it.

And this is all without the added bonus of a chance to beat Labour at its own game and disappear over the horizon with an embarrassingly large part of its wardrobe, leaving the opposition looking around for ideas about what in fact it does stand for.

In the nineteenth and early twentieth centuries the Conservatives were past masters at seeing what the country demanded and then doing it before someone else did, without too much worry about what earlier Tory grandees might have thought. This was why it was the Tories who produced the Second Reform Act in 1867, the notable line of factory legislation in the 1880s improving the lot of both young and female workers, and, of course, full female suffrage in 1928. If the government plays it right, it now has a chance to show that it hasn’t lost the ability to see what has to be done in the twenty-first.