Agents of change: To end workplace exploitation, Labour needs boots on the ground

Quick on the heels of his ‘fight back’ speech at Senate House, which was peppered with references to inequality, low pay, and zero-hours contracts, on Monday Ed Miliband returned to the subject of insecurity, exploitation and unfairness at work by setting out a plan to “crack down on cowboy employment agencies” and so “halt the exploitation of Britain’s million-strong army of agency workers.”

Sticking with his Senate House theme of the zero-zero economy – in which “hundreds of thousands are kept on zero-hours contracts while a tiny privileged minority pay zero tax” – Miliband boldly proclaimed that:

“Too many people face insecurity at work. It will be the mission of the next [Labour] government to change this. We will not tolerate a world of work that is becoming more brutal because of the way some cowboy employment agencies have been allowed to operate. These rogue agencies need to know their time is up and we will act.”

This is fabulous news, even if some of Miliband’s specific proposals on rogue agencies don’t stand up to much scrutiny. Closing the so-called Swedish Derogation loophole in the agency rules – under which agency workers can be paid less than permanent workers doing exactly the same job – is a common sense move, even if there is little evidence (even from trade unions) of the extent to which it is used. But it’s not clear how Miliband’s proposed ban on agencies recruiting exclusively from abroad differs from (let alone improves upon) action already taken by the coalition, which his advisers appear to have overlooked.

More significantly, perhaps, it is unclear what Miliband has in mind when he says that Labour will “force rogue agencies illegally exploiting their workers to clean up their act through measures such as the introduction of a licensing system.” Is this simply a camouflaged reiteration of the National Policy Forum Report’s pledge to extend the narrow remit of the Gangmaster Licensing Authority’s licensing system to sectors such as construction, hospitality and social care? If so, I simply can’t see the CBI, REC and other employer bodies swallowing that – which means it almost certainly won’t happen. Faced with the CBI’s displeasure, shadow ministers are already rowing back on Miliband’s extremely modest eve of conference pledge to raise the national minimum wage rate to £8 per hour by 2020.

Or does Miliband have something new and different in mind? Could he and his advisers be thinking of forcing only those agencies found to be rogues to take out a licence, with the threat of losing that licence (and the right to trade) if they do not improve their conduct? That might be acceptable to the CBI and REC, but it begs a rather crucial question: who will identify the rogues?

Indeed, much the same question can be asked of Miliband’s plan as a whole: who is going to enforce all these new rules on employment agencies?

Thanks to coalition cuts, the BIS employment agency standards inspectorate – never one of the biggest or most visible of state bodies – has been reduced to a rump of just two inspectors (and one administrative assistant). These lucky souls have the unenviable task of monitoring the some 8,000 employment agencies in England, Scotland and Wales, and resolving some 600 complaints per year from agency workers. No wonder, then, that “even the industry itself is expressing concern that the number of rogue agencies have increased in recent years.”

If Miliband believes that the answer to all this is simply to create yet more law and rules for the rogue agencies to flout, then he really hasn’t grasped what is needed to genuinely tackle exploitation and unfairness at work, and his ‘mission’ to do so is destined to become mission impossible.

As much as it irks me to say it, Miliband needs to take a leaf out of Vince Cable’s book. Last month, at his party’s conference in Glasgow, Cable quietly announced that the Liberal Democrats’ manifesto for May 2015 will promise a new Workers’ Rights Agency to “revamp efforts to enforce employment law and tackle the exploitation of workers.” According to Cable, the new agency would “ensure the minority of unscrupulous employers who break the law do not get away with undercutting other employers who play by the rules.”

And, if it makes Miliband feel better about lifting ideas from Cable, this wasn’t actually Cable’s idea – he simply lifted it from me. From 2001 to 2013, while at Citizens Advice, I repeatedly advocated a consolidation of the various State enforcement bodies – including the BIS employment agency standards inspectorate – into a properly resourced and empowered Fair Employment Agency, so as to shine a light into the murkiest corners of the labour market, shut down the rogues, and secure a fairer competitive environment for law-abiding businesses. And I’ve continued to do so in recent years.

The bottom line is that rogue employers and agencies won’t be beaten by new laws and rules. Miliband’s laudable mission needs boots on the ground.