Miliband is right to tackle cheap foreign labour

I am delighted that Ed Miliband has announced that Labour will work with businesses to promote equal pay and conditions for agency staff across Europe.

Our newspapers report daily how people blame Europe for immigration and this run-up to the new year has been marked by the alleged arrival of thousands (if not millions) of Bulgarians and Romanians, with the level of debate spiraling and bordering into racism and xenophobia.

Half of the story about the Britain’s economic recovery is that it is a recovery for the few, with the many struggling to make ends meet. The other half of the story – the one Cameron does not like – is that if some financial growth has happened, is because of the availability of migrant workers.

As a migrant myself – I was not born in Britain, but chose to work for the NHS and to raise my family here – I feel it is about time to react against those who approach immigration by the wrong end of the stick.

In 2014 Britain, the debate about immigration is a debate on living standards, on the hard working majority – as well as the disabled and the poor – bearing the brunt of an unequal recovery. But it is also a debate about globalization, the world we want and the reality that we cannot compete with China and Brazil in a race to the bottom of salaries.

The problem does not lie with migration, but with the ‘use and disposal’ of migrant labour as an escamotage to undercut salaries. This has happened throughout Europe, thus generating anti-immigration fears and nationalistic movements. It is the prize we are paying for not having done anything to prevent it; it is the prize we are paying for letting the liberal right getting it their way, with migrants considered as cheap labour; collateral damage of our unfettered capitalism.

This is why Labour’s approach to immigration is the right one.

In 2011, the EU Agency Workers Directive was introduced granting rights for equal pay and conditions for agency staff across Europe. This was a fair measure: at the time, business lobby groups warned that the legislation would lead to heavy job losses. As with the minimum wage, that did not happen and, on the contrary, agency workers have increased by 15 per cent.

However, the UK government has failed to implement the Temporary Agency Workers Directive properly, leading to tens of thousands of agency workers being paid less than permanent staff despite doing the same job. This has been possible under a loophole known as the “Swedish derogation” which the directive itself discourages from applying.

As noted by the TUC, which lodged a complaint against the British government, the Swedish derogation contract exempts the agency from having to pay the worker the same rate of pay, as long as the agency directly employs individuals and guarantees to pay them for at least four weeks during the times they can’t find them work.

In Sweden, where these contracts originate, workers still receive equal pay once in post and 90 per cent of normal pay between assignments. However in the UK workers have no equal pay rights and are paid half as much as they received in their last assignment, or minimum wage rates, between assignments. Agencies can also cut their hours, so receive as little as one hour of paid work a week.

This is a perfect example of how an EU directive, introduced to bring fairness and harmonise rights, has been misused and wrongly blamed for the race to the bottom of salaries workers are engaged in. Ed Miliband’s announcement would close that loophole and ensure that the Directive is interpreted in its correct way.

Ultimately, this is a fantastic opportunity to unify the Labour and union movement with the pro-European front and the business communities.

Businesses in Britain know they can thrive globally because of the proximity to the Eurozone, the availability of labour, and the infrastructures provided by the EU that can negotiate trade agreements on a global scale.

It is time to work all together to demonstrate we can do all those things above and still safeguard workers’ rights; investing more on innovation and science rather than relying on cheaper workforces.