The battle to protect workers' rights is only beginning

The Lib Dems' intention to block the worst of the Beecroft report does not diminish the urgency of t

Claudia sits in the sunshine after work. Sitting in jean shorts and covered in freckles, she doesn’t look much past her teens, but she’s been working as a cleaner at St Georges University for over a year. Her cleaning company Ocean recently told her she’d be doing the same job on fewer hours, cutting her wages with just a few weeks notice and laying several people off. If the government goes ahead with new proposals to change employment rights, things are going to get a whole lot harder.

“I don’t really know how the process works,” Claudia smiles shyly, “No one ever told me I had rights.”

Claudia hasn’t heard of the government’s Beecroft report, but you can bet her employers have. The venture capitalist and Tory donor’s fifteen-page report calls on the government to rip up historic protections for British workers. The most controversial proposal gives bosses the power to be able to fire “without giving a reason”. But that's not the only joy. The report also wants to cut the amount of notice a company has to give before laying off large numbers of staff by two thirds, and scrap equal rights for agency workers working over twelve weeks. Staff could also face new unaffordable fees for employment tribunals.

The entire report says more about power than it does about economics. If this was just about improving labour market flexibility, we’d be having a conversation about how to remove people who are incompetent from the top as well as the bottom. But it will always be people like Claudia with fewer qualifications, less literacy, worse resources and lower political clout that take the hit. The financial crisis might have been caused by people with power, but very few faced dismissal as a result. Beecroft will never know what it feels like to fall to the very bottom, and a worker like Claudia will never know what it’s like to influence employment law.

“It seems that day by day the law is furthering rich people,” says Alberto Durango, a cleaner from the IWW union who is helping organise the cleaners in St Georges, “We are like products for a company trying to reduce costs. They are firing people and reducing the conditions of people who have been working for them for years and years… with no unfair dismissal that would be much easier.”

Nor does Beecroft’s report seem to be based on evidence. It’s a struggle to find any facts or figures in the unreferenced document, which often seems to speak more from prejudice than intelligence. Certainly when I talk to the small businesses in my ward, I have never heard the inability to fire people raised as a problem. The complaint is not that there are too many staff serving, but that there are too few customers in the shop buying. The deputy prime minister says that Britain already has one of the most flexible labour markets in Europe. Take away job security at a time like this, and people are likely to cut back spending even more.

The left needs to tell a different economic story. To do that honestly, we must look at long-term reform as well as short term spending. Some of Beecroft’s proposals make sense – asking workers to make an affordable contribution to employment tribunals, taking serious action to help both sides resolve disputes faster with time limits – but we need alternative proposals too. Germany might offer some inspiration. There, greater engagement with workers helped negotiate shared hours down with far fewer redundancies. Worker representation on the boards of companies helps hold bosses to account as well as employees. The Rhineland could teach us more about the kind of capitalism we want than the USA.

Right now the left isn’t taking Beecroft's report too seriously because the Lib Dems don’t support it and it wasn’t in the Coalition agreement. But the pressure to implement this reform will grow. Tory backbenchers and party funders are desperate for growth, and as long as they’re not prepared to invest their way out of the recession, this is the only option they can see - even if it doesn’t have an evidence base. The worse the economy does, the louder the clamour will get. For the sake of economics as well as the livelihoods of people like Claudia, the left should be ready to take on the fight.

 

Rowenna Davis is Labour PPC for Southampton Itchen and a councillor for Peckham

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BHS is Theresa May’s big chance to reform capitalism – she’d better take it

Almost everyone is disgusted by the tale of BHS. 

Back in 2013, Theresa May gave a speech that might yet prove significant. In it, she declared: “Believing in free markets doesn’t mean we believe that anything goes.”

Capitalism wasn’t perfect, she continued: 

“Where it’s manifestly failing, where it’s losing public support, where it’s not helping to provide opportunity for all, we have to reform it.”

Three years on and just days into her premiership, May has the chance to be a reformist, thanks to one hell of an example of failing capitalism – BHS. 

The report from the Work and Pensions select committee was damning. Philip Green, the business tycoon, bought BHS and took more out than he put in. In a difficult environment, and without new investment, it began to bleed money. Green’s prize became a liability, and by 2014 he was desperate to get rid of it. He found a willing buyer, Paul Sutton, but the buyer had previously been convicted of fraud. So he sold it to Sutton’s former driver instead, for a quid. Yes, you read that right. He sold it to a crook’s driver for a quid.

This might all sound like a ludicrous but entertaining deal, if it wasn’t for the thousands of hapless BHS workers involved. One year later, the business collapsed, along with their job prospects. Not only that, but Green’s lack of attention to the pension fund meant their dreams of a comfortable retirement were now in jeopardy. 

The report called BHS “the unacceptable face of capitalism”. It concluded: 

"The truth is that a large proportion of those who have got rich or richer off the back of BHS are to blame. Sir Philip Green, Dominic Chappell and their respective directors, advisers and hangers-on are all culpable. 

“The tragedy is that those who have lost out are the ordinary employees and pensioners.”

May appears to agree. Her spokeswoman told journalists the PM would “look carefully” at policies to tackle “corporate irresponsibility”. 

She should take the opportunity.

Attempts to reshape capitalism are almost always blunted in practice. Corporations can make threats of their own. Think of Google’s sweetheart tax deals, banks’ excessive pay. Each time politicians tried to clamp down, there were threats of moving overseas. If the economy weakens in response to Brexit, the power to call the shots should tip more towards these companies. 

But this time, there will be few defenders of the BHS approach.

Firstly, the report's revelations about corporate governance damage many well-known brands, which are tarnished by association. Financial services firms will be just as keen as the public to avoid another BHS. Simon Walker, director general of the Institute of Directors, said that the circumstances of the collapse of BHS were “a blight on the reputation of British business”.

Secondly, the pensions issue will not go away. Neglected by Green until it was too late, the £571m hole in the BHS pension finances is extreme. But Tom McPhail from pensions firm Hargreaves Lansdown has warned there are thousands of other defined benefit schemes struggling with deficits. In the light of BHS, May has an opportunity to take an otherwise dusty issue – protections for workplace pensions - and place it top of the agenda. 

Thirdly, the BHS scandal is wreathed in the kind of opaque company structures loathed by voters on the left and right alike. The report found the Green family used private, offshore companies to direct the flow of money away from BHS, which made it in turn hard to investigate. The report stated: “These arrangements were designed to reduce tax bills. They have also had the effect of reducing levels of corporate transparency.”

BHS may have failed as a company, but its demise has succeeded in uniting the left and right. Trade unionists want more protection for workers; City boys are worried about their reputation; patriots mourn the death of a proud British company. May has a mandate to clean up capitalism - she should seize it.