Want to understand Brexit? Just look at Sports Direct

The notorious warehouse was built on the site of a coalmine. 

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In Bolsover, a constituency near Sheffield, 71 per cent of voters opted to leave the European Union. If you want to understand why, look no further than its most infamous resident – Sports Direct. 

The cheap-as-chips sportswear company has an 800,000 square foot warehouse at Shirebrook, on the site of a coal mine that shut in 1993. It has been described as a Victorian workhouse, a gulag. After stories of a worker forced to give birth in a toilet, evidence of regular visits by paramedics and workers paid less than the minimum wage, MPs investigated.

The Business, Innovation and Skills select committee’s damning report, published on Friday, declared: 

“Workers at Sports Direct were not being paid the national minimum wage, and were being penalised for matters such as taking a short break to drink water and for taking time off work when ill. Some say they were promised permanent contracts in exchange for sexual favours. Serious health and safety breaches also seem to have occurred. For this to occur in the UK in 2016 is a serious indictment of the management at Sports Direct.”

Sports Direct has grabbed the nation’s attention in part because of its colourful boss, Mike Ashley. The plain-speaking billionaire refused to appear in front of MPs, and when he finally did, he professed outrage that such abuses were going on. 

MPs concluded that he must be held accountable, either for participating in “appalling working practices” or for not bothering to learn about them in the first place. But crucially, the report noted: “Although Sports Direct is a particularly bad example of a business that exploits its workers in order to maximise its profits, it is unlikely that it is the only organisation that operates in such a way."

And this is where Brexit comes in.

Sports Direct – despite Ashley’s professed surprise about the internet – operates in a thoroughly modern way. It is not a 19th century workhouse, but a product of its time. 

Like the oh-so-fashionable Uber, it keeps its labour pool as flexible as possible. The warehouse hires agencies to supply workers. The majority of these workers are only guaranteed 336 hours, or seven weeks, of work a year. And here’s the crucial detail – while the agency may choose freely how many more hours it can offer, the worker must accept these or risk getting sacked.

As the report put it: “It is hard to see how in these circumstances, for example, the worker could have a job with another employer, since he or she is permanently ‘on call’.”

Thanks to zero-hours contracts, and shares for rights schemes, employers can legally impose these kind of rules. In a bustling city like London or Manchester, workers who don't like the terms of a contract can still vote with their feet. But in small, deprived towns, this is not an option.

Imagine that you grew up in Shirebrook in the 21st century. The industry that offered permanent employment and the rights that come alongside that, has vanished. And in its place – exactly in its place – your best chance of work is at Sports Direct. Why should gloomy forecasts of a Brexit future worry you when you don’t even know if you’ll get paid next week?

But that is not the whole story. If Sports Direct’s model is based on exploitative working practices, then logically it should recruit the type of workers with least protection against exploitation.

One whistleblower who contacted MPs told them: “When the colliery was closed and the town began to suffer, local people were promised 80 per cent of the jobs, but it came to less than 30 per cent, and the majority of jobs went to Eastern European workers.”

One telling detail of the report is the fact Sports Direct offers employees without a bank account a pre-paid debit card, which costs £10 a month and 75p for cash withdrawals. It is hard to imagine anyone with a basic familiarity of the UK’s free bank accounts accepting such an offer. 

Steve Turner, a Unite trade unionist, said as much. He told the committee: “We have workers here, predominantly from Eastern Europe and recruited in Eastern Europe. English is their second if not third language.

“They are brought across to the UK and then, because they have no bank account, they are offered the facility of a pre-paid debit card.”

If your main experience of the free movement of people is Shirebrook, why on earth would you be in favour of it? The immigrant workers in the warehouse are not aspirational entrepreneurs. They are merely fellow victims in a 21st century labour trap. And at least these workers were paid something akin to a normal salary, compared to the Slovakian "slaves" rescued from a business park in Rochdale in 2014. These unlucky workers were promised accommodation and jobs, but ended up earning just £25 for an 80-hour week. 

Sports Direct is the flipside to London’s coffee-swilling freelancers, or university towns’ cosmopolitan hubs. It epitomises the worst of a flexible labour market and the abuse of an expanded labour pool. But these are problems that could have been fixed in house, if MPs had clamped down on zero-hours contracts and listened more to unions. Brexit on its own will do neither of these things. 

 

Julia Rampen is the digital news editor of the New Statesman (previously editor of The Staggers, The New Statesman's online rolling politics blog). She has also been deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines.