Unfair game: Ed Balls’ labour market reforms are not enough

The big news may have been restoration of the 50p marginal tax rate on the richest one per cent, but it was another part of Ed Balls’ speech to the Fabian New Year conference on Saturday that pricked up my ears and got my Twitter finger twitching.

Having noted that, without an active industrial strategy, insecure low-paid work will “increasingly become the norm”, the shadow chancellor made clear that, under the next Labour government, there will be “fair labour market rules”.

Now, this would be good both for workers and the majority of businesses that play by the rules. Since 2008, poor economic conditions and the coalition’s systematic erosion of workplace rights have combined to generate explosive growth in precarious work, with widespread poverty wages and exploitative use of zero-hours contracts.  The current labour market rules are anything but fair, and that enables bad employers to undercut the good.

But what, exactly, might the next Labour government do to change this? Somewhat surprisingly, Ed Balls doesn’t seem to know.  Or, if he does, he wasn’t saying on Saturday.

For the only specific policy commitment in Ed’s speech to us Fabians was the abolition of George Osborne’s much-mocked and little-used ‘shares for rights’ scheme.  The scheme had such low takeup that its abolishment will do about as much for labour market fairness as scrapping guardsmen’s bearskin hats would do for Britain’s defence capability.

We might reasonably have expected Ed to say something about what the next Labour government will do in relation to the national minimum wage.  However, not only have the Tories stolen a march on Chuka Umunna, Rachel Reeves and the two Ed’s with Osborne’s brilliantly-timed ‘£7 per hour’ coup, but Vince Cable has shot Chuka’s ‘increase the fines’ fox with an immediate quadrupling (to £20,000) of the maximum penalty for non-compliance with minimum wage regulations.  Any Labour pledge of a further hike in the penalties would look and feel like an empty gesture.

As Polly Toynbee rued at the Fabian conference on Saturday, “Labour missed a trick by talking only of ‘strengthening’ the minimum wage” at last year’s party conference.  Indeed, with the number of HMRC enforcement officers (181) higher than it was at the fag-end of the Labour government (154), it’s hard to see what shadow ministers can now offer without committing to significant extra money for enforcement.  And handing cash-strapped local authorities enforcement powers, as the indefatigable Andy Hull and others have urged, would be yet another token gesture without extra money to do the job.

So, what else? Well, shadow ministers including David Hanson, Andy Sawford and Ian Murray have talked about clamping down on rogue employment agencies. But with the BIS Employment Agency Standards Inspectorate having been reduced to a rump of just three people – one of them an administrative officer – that’s another policy pledge that will need a sizeable injection of cash if it’s to contribute more than hot air to making the labour market rules fair.

At the start of the year, with some fanfare, Ed Miliband also pledged to close a loophole in the agency worker rules known as the Swedish derogation. But with no one – not even the TUC, which has lobbied hard on the issue – able to say how many agency workers would actually benefit, the announcement has left most employment lawyers underwhelmed.

So, in the absence of any largesse from Ed Balls, what could a Labour government do to turn the shadow chancellor’s rhetoric on fair labour market rules into reality?

Well, it could restore legal protection against unfair dismissal, by reversing the coalition’s extension of the qualifying period to bring a tribunal claim – that would cost nothing.  It could scrap the coalition’s outrageous tribunal fees, again at no cost, by switching to a ‘losing fee’ for employers found to have breached the law – the true ‘users’ of the tribunal system.  And it could use the best debt collection agencies to pursue those rogue employers who fail to pay tribunal awards (and/or my proposed losing fees).

These are just some of the price tag-free policy ideas that shadow ministers really should be looking at.  But they’d better get a move on. Time is running out for the rhetoric to be matched by ‘door-step ready’ commitments to action.