Labour exploits Osborne's pasty problem

Osborne's "pasty tax" comes under fire from Miliband.

Full marks to whichever Labour staffer positioned Ed Miliband in front of Greggs during his interview with Sky News earlier today. George Osborne's decision to apply VAT to hot supermarket food [raising the price by 20 per cent], an obscure change announced in last week's Budget, has become a political problem for the government following yesterday's select committee hearing. After admitting that he "can't remember" the last time he bought a pasty at Greggs, Osborne suggested that cold pasties would not be VAT-able, a comment that inspired today's Sun to compare the Chancellor to Marie Antoinette ["Let them eat cold pasty," reads its headline].

Shadow chief secretary to the Treasury Rachel Reeves made a well-timed visit to Greggs.

The tabloid's editorial goes further, declaring that "the Chancellor and his rich Cabinet colleagues cannot begin to understand what it's like to be so hard-up that a sharp rise in the price of a pasty will hurt.

"Unlike Sun readers, they don't worry how to pay for food, rent or petrol. If they ever have done, they certainly can't remember how it feels now -- any more than Mr Osborne can remember the last time he bought a pasty in Greggs."

It's tempting to dimiss this as a bit of knockabout fun but symbolism matters in politics and the current row both reflects and reinforces the view that the government is out of touch with ordinary people. Put simply, it has cut taxes for millionaires and raised them for pasty-eaters [the two categories are, of course, not mutually exclusive, though Osborne's performance suggested they might be]. As ConservativeHome's Tim Montgomerie has written, class is the Conservatives' "Clause IV" and this week's ComRes poll showed that 66 per cent of voters regard the Tories as "the party of the rich".

Miliband told reporters outside Greggs:

"Not just fuel duty going up, child benefit taken away, tax credits being cut, now even putting 20 per cent on the cost of pasties, sausage rolls, and the Chancellor's excuse? Well, he says you can buy them cold and you can avoid the tax.

"It just shows how out of touch this Government is and it shows that we've got a Budget that is hitting millions of people while cutting taxes for millionaires."

In an attempt at damage limitation, David Cameron told a press conference that he "loves a hot pasty" [although he bought his from the West Cornwall Pasty Company] but offered no hint of a U-turn. Has any Budget ever offered an opposition party so many easy hits?

Ed Miliband speaks to reporters outside a Greggs bakery earlier today.

George Eaton is political editor of the New Statesman.

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There's nothing Luddite about banning zero-hours contracts

The TUC general secretary responds to the Taylor Review. 

Unions have been criticised over the past week for our lukewarm response to the Taylor Review. According to the report’s author we were wrong to expect “quick fixes”, when “gradual change” is the order of the day. “Why aren’t you celebrating the new ‘flexibility’ the gig economy has unleashed?” others have complained.

Our response to these arguments is clear. Unions are not Luddites, and we recognise that the world of work is changing. But to understand these changes, we need to recognise that we’ve seen shifts in the balance of power in the workplace that go well beyond the replacement of a paper schedule with an app.

Years of attacks on trade unions have reduced workers’ bargaining power. This is key to understanding today’s world of work. Economic theory says that the near full employment rates should enable workers to ask for higher pay – but we’re still in the middle of the longest pay squeeze for 150 years.

And while fears of mass unemployment didn’t materialise after the economic crisis, we saw working people increasingly forced to accept jobs with less security, be it zero-hours contracts, agency work, or low-paid self-employment.

The key test for us is not whether new laws respond to new technology. It’s whether they harness it to make the world of work better, and give working people the confidence they need to negotiate better rights.

Don’t get me wrong. Matthew Taylor’s review is not without merit. We support his call for the abolishment of the Swedish Derogation – a loophole that has allowed employers to get away with paying agency workers less, even when they are doing the same job as their permanent colleagues.

Guaranteeing all workers the right to sick pay would make a real difference, as would asking employers to pay a higher rate for non-contracted hours. Payment for when shifts are cancelled at the last minute, as is now increasingly the case in the United States, was a key ask in our submission to the review.

But where the report falls short is not taking power seriously. 

The proposed new "dependent contractor status" carries real risks of downgrading people’s ability to receive a fair day’s pay for a fair day’s work. Here new technology isn’t creating new risks – it’s exacerbating old ones that we have fought to eradicate.

It’s no surprise that we are nervous about the return of "piece rates" or payment for tasks completed, rather than hours worked. Our experience of these has been in sectors like contract cleaning and hotels, where they’re used to set unreasonable targets, and drive down pay. Forgive us for being sceptical about Uber’s record of following the letter of the law.

Taylor’s proposals on zero-hours contracts also miss the point. Those on zero hours contracts – working in low paid sectors like hospitality, caring, and retail - are dependent on their boss for the hours they need to pay their bills. A "right to request" guaranteed hours from an exploitative boss is no right at all for many workers. Those in insecure jobs are in constant fear of having their hours cut if they speak up at work. Will the "right to request" really change this?

Tilting the balance of power back towards workers is what the trade union movement exists for. But it’s also vital to delivering the better productivity and growth Britain so sorely needs.

There is plenty of evidence from across the UK and the wider world that workplaces with good terms and conditions, pay and worker voice are more productive. That’s why the OECD (hardly a left-wing mouth piece) has called for a new debate about how collective bargaining can deliver more equality, more inclusion and better jobs all round.

We know as a union movement that we have to up our game. And part of that thinking must include how trade unions can take advantage of new technologies to organise workers.

We are ready for this challenge. Our role isn’t to stop changes in technology. It’s to make sure technology is used to make working people’s lives better, and to make sure any gains are fairly shared.

Frances O'Grady is the General Secretary of the TUC.