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Covid-19: Gig Economy

Volume 806: debated on Thursday 22 October 2020


Asked by

To ask Her Majesty’s Government what assessment they have made of the impact of the COVID-19 pandemic on the gig economy.

My Lords, the Government have stood by businesses and workers with one of the most comprehensive and generous packages of support globally. We are working intensively with employers and industry groups to understand the long-term effects of Covid-19 and specific challenges to businesses and workers, including in the gig economy. Following announcements of further measures to control the spread of Covid-19, we are continuing to monitor the impact of government support in different sectors.

I thank the Minister very much for her Answer. While the job coaches and extra provision made may improve the CVs and present conditions of those forced into the gig economy, they will do nothing to improve the security or the working conditions of those so precariously employed and poorly protected. Therefore, will the employment Bill provide a clearer definition of what counts as an employer-employee relationship? How will it stop platform employers retaining all of the profits while socialising essential costs such as sickness pay or a basic pension in old age?

My Lords, the Government announced an employment Bill in the Queen’s Speech, and details of that will be brought forward in due course. But the Government are not waiting for that Bill to take action to ensure that the gig economy, while it remains flexible, is also fair to the workers who work within it. Since the Taylor review, we have legislated for a number of stronger protections for workers, including extending the right to a written statement of core terms of employment and quadrupling the maximum fine for employers who treat their workers badly.

My Lords, the time when full-time jobs were secure has now long gone. Almost no full-time employee today can guarantee that they will be in the same position in a year’s time. However, financial insecurity is much higher for gig workers and the self-employed, as highlighted more strongly during this Covid crisis. I ask my noble friend the Minister: what action can be looked at to address the issue of continual late payments for goods and services, as this has a very great impact on this sector?

My Lords, I believe that this is something that falls within the remit of the Small Business Commissioner, and the Government have looked at increasing the enforcement of those provisions.

My Lords, a problem with the term “gig economy” is that, in practical terms, it incorporates a wide and varied group, many of whom have had vocational training and are self-employed by choice because of the nature of the work they do. Does the Minister acknowledge that there needs to be a sea change in the way the self-employed as a whole are regarded and that to support them through this crisis—and they need considerably more financial support—would be to protect an investment for the future?

My Lords, the Government acknowledge the important work that the self-employed do across this country, and I am sure the noble Earl will welcome today’s announcement that the support for the self-employed in the next two grants under the scheme will double from 20% to 40%, meaning that the maximum grant will rise from £1,875 to £3,750.

Your Lordships will be aware that thousands of gig economy workers are employed in the hospitality sector, which saw a decline of over 80% between April and June this year and which faces further uncertainty due to tier 3 regional restrictions. Will the Minister agree to consider the proposals in the hospitality rescue review published today by Unite the Union to protect jobs and the health and safety of these workers by, in particular, immediately establishing a tripartite hospitality commission of employers, unions and government to help secure the survival of this important sector?

My Lords, the Government will look at all recommendations for what we can do to support the economy and businesses during this difficult time, including the ones that the noble Baroness mentioned. Today, the Government have announced more support for the hospitality sector: we announced grants for businesses that have to close under tier 3, but those that suffer a downturn in their business due to tier 2 restrictions will also be able to access grants, which will be backdated for those areas that were already under similar restrictions before the tiered system was put in place.

The Chancellor’s announcements today are welcome as they improve support for those in work and the self-employed, but I hope that the Minister recognises that there are very large numbers of people in all forms of the gig economy who are not getting support. In particular, I cite those who work in the arts and elsewhere, who will not currently have employment and have little hope of it, or those who are directors working through limited companies, who cannot now get income because they are not supported because they took their income through dividends. Does the Minister have any estimate of how many people have been excluded from support?

My Lords, the noble Lord is talking about two of the support schemes: the Job Support Scheme, or the furlough scheme, and the self-employed scheme. Of course, for those who are not able to access those schemes, there are many other support schemes available, including bounce-back loans for businesses, where we have increased the generosity of those terms, and the Cultural Renewal Taskforce, which provides over £1.5 billion of funding to cultural institutions. One of the effects of this, we hope, will be that freelancers working in that sector will have more opportunities for work and be able to stay in the sector to which they contribute so much.

My Lords, the Minister mentioned the Taylor review, Good Work, which was completed in 2017. All of its recommendations were accepted. It contained important recommendations on closing the gap in law between the limited rights available to workers and the better rights available to employees. Will these be included in the long-awaited employment Bill?

My Lords, as I said to the right reverend Prelate, we will bring forward the employment Bill, but I cannot preview what will be in it today. As I have also said, we have not waited for that Bill as the opportunity to make changes to the balance between flexibility for employers and flexibility for employees. We will continue to take measures to protect workers where we can.

My Lords, I declare my interest as stated in the register. Is the Minister aware that the basis for allocations of Arts Council England’s cultural recovery fund grants is widely seen as incomprehensible, arbitrary and unfair, leaving many viable festivals with no funding to repay hundreds of thousands of pounds to thousands of ticketholders who have not rolled over their tickets to 2021? Will she confirm that there will be an appeals process to ensure that the undistributed part of the grant can be allocated fairly to those whose applications may not have been properly considered?

My Lords, I do not recognise my noble friend’s description of the criteria for the allocation of grants under that fund. The Government have been clear that priority will be given to organisations with national or international reputation and to those central to the cultural fabric of our towns and regions. However, I will take my noble friend’s point about an appeals process back to the department.

My Lords, the word “gig” of course comes from music. I am afraid that the announcements today will not help the problem that I am about to enunciate. Does the Minister share my concern that, when we look at the Government’s own figures for the Self-employment Income Support Scheme, it is alarming that only 34% of those who are self-employed in arts and entertainment have taken up the scheme? Therefore, without further support for those freelancers falling through the many cracks, we are at risk of losing highly skilled talent from our world-leading music industry.

My Lords, 95% of those who get half or more of their income from self-employment would qualify for the self-employed scheme. As I have said to noble Lords, for those who do not qualify, it is not the only route of support that the Government are providing. We completely recognise the contribution of those in the arts to our country. That is why we have a specific fund dedicated to supporting cultural recovery.

My Lords, as part of the seven steps towards fair and decent work with realistic scope for development and fulfilment outlined in the Taylor report, what will the Government do to ensure that this community has an opportunity for training and retraining, particularly in the tech industry?

My Lords, a huge amount of support is going into the Government’s plan for jobs, which has a focus on improving the amount of training and retraining available where people wish to take it up. That support is there. The entire plan is worth around £30 billion and will be in place to help those unable to find work in the current circumstances.