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Working Conditions in the Private Hire Industry

Volume 626: debated on Wednesday 5 July 2017

[Mrs Madeleine Moon in the Chair]

I beg to move,

That this House has considered the regulation of working conditions in the private hire industry.

I am immensely pleased to introduce the debate under your chairmanship, Mrs Moon. I hope that the Minister can be more accommodating on this issue than his colleague was in the previous debate. Indeed, I shall begin by buttering him up, if I may, although I realise that there is a limit to what buttering up will do in the House of Commons, particularly of this Minister. During our parliamentary lives, we have often debated, and debated well, across the Chamber, and I know perfectly well that if he is able to make or clarify the Government’s position before the Taylor review is published, he will do so. However, I also know that he is a loyalist and will probably be the last Minister standing who believes in collective responsibility, so the buttering up must be accompanied by a sense of reality about how far Ministers can go in helping to clarify Government policy.

My aim in this debate, as I hope the Minister knows, is not to have a preview of the Taylor report—although if he wished to give one, that would be wonderful—but to ascertain whether he can help the transport executives to clarify the powers that they have to give licences to companies such as Uber. I shall dwell in a moment on where I see Uber both contributing positively and being a destructive force for many people’s living standards.

I begin the debate with a reference to a report on Hermes, “Wild West Workplace”. That and two subsequent reports have my name on them, but also that of Andrew Forsey, who works with me. The truth, as MPs know, is that it is often the other name on the report who has actually done the work, and I pay tribute to Andrew for the extraordinary way in which, among all his other activities as chief of staff in my office—including steering me away from elephant traps and helping me to make as positive a contribution as I can to the House of Commons—he can take on work of this nature.

The second report, “Sweated Labour”, was on Uber, and the third one, which will be published tomorrow, is “A new contract for the gig economy”. I want to record in this debate that when Andrew and I—it was very much Andrew—completed the first report, “Wild West Workplace”, we wrote to the Prime Minister, and we said that the circumstances that we had described had shocked me and my guess was that they would shock her. They were certainly at variance with her statement when she became Prime Minister about the sort of society that she wished to create and the protections that she wished to extend to those who were weakest.

If we look at any of the three reports—if people would like copies of “A new contract for the gig economy”, which is published tomorrow, they can by all means have them—we see that four forces are pushing down wages in this area. Let me explain what I am not saying, and I hope the Minister will accept this. Nothing I have ever said or published does not admit that Uber-type conditions certainly serve a large part of consumers’ wishes for quick and cheap transport, or that perhaps many Uber workers are very content with their lot, as shovelled out by Uber under what I think is a bogus self-employed contract. I am talking about people who regularly write to Andrew and me, giving more examples of how bogus the self-employed contract that they are forced to work under is, and of the appalling conditions that those employers get away with. As we know, they not only get away with paying incredibly low wages to some workers; they do not pay their fair share of taxes, so I would hope that the Chancellor of the Exchequer would be on the Minister’s side. If we are interested in VAT, national insurance and income tax returns, we should be rather keen on what the Minister says today and what the Taylor review will come up with, I hope, next week—perhaps the Minister will be able to give us a date for its publication.

Wages have been pushed down for those who suffer worst in this gig economy in four ways. The first is the very low fares, which have been cut in recent years, which some people think is great fun because they can get home cheaply. Second are the high rates of commission demanded by the company, which now vary clearly between newer workers trying to make a decent living out of being a driver, and older drivers, who—thank God—are more protected, although now that I have made that statement, perhaps that image will be challenged by people who contact us after the debate. Third is the cost of renting a vehicle that meets Uber’s very strict requirements, and fourth is the cost of refuelling and maintaining those vehicles. Those are the downward forces in the economy that make it very difficult for people to make a decent living and, indeed, as I shall argue, to make a living in which they are covered by the statutory minimum wage.

I welcomed it when George Osborne initiated the minimum wage strategy in the previous Parliament. It is very important to try to cover and protect people at the bottom of our society. I saw the then Chancellor of the Exchequer’s move as a very welcome one, but we know that it is failing by the way Uber and other companies get round regulations on how people earn, what they earn, the hours that they undertake, and their employment status.

The Government responded to Andrew’s report by establishing the Taylor review, which is to report soon. We hope that it will accept the main recommendation on which Andrew and I have been campaigning, which is that the definition of hours of work is immensely important in this area and that, on the basis of a satisfactory definition of hours worked—satisfactory to the workers rather than to Uber—the minimum wage should be applied on an hourly basis.

That brings me to the real kernel of the debate—the part to which I would love the Minister to respond. Uber and similar companies are registering in London, Leeds, Liverpool and Glasgow, getting the necessary licences from those areas’ transport executives. Is it because the legislation is uncertain or difficult to interpret that these transport executives are not saying, “These are the minimum conditions that you, the company, must meet if you wish us to grant you a licence to operate in our area”? I would like to hear the Minister’s view, but I think the position is quite clear.

It would take just one transport authority to say, “This is the interpretation.” We have not heard any of them say that, although, thankfully, here in London Sadiq Khan has said that he is unsure about Uber and is giving it a very short licence to continue to carry out its business while this essential issue is debated. Is the Minister in a position to give us a clearer ruling on the encouragement that he might give to transport authorities to recognise that they do have powers, and to such companies to behave within the culture that the Prime Minister spoke of when, perhaps unexpectedly, she became Prime Minister?

Before I conclude, I shall be more than happy to let any hon. Member make an intervention.

My right hon. Friend has touched on some troubling issues in the current employment market, particularly in relation to private hire vehicles. The Law Commission looked at some of those issues in its 2014 report, but new factors have since emerged, including Uber’s increased share of the market and the Deregulation Act 2015. Does he agree that there is a clear case for looking again at the regulation of the taxi and private hire sector more generally, even as we await publication of the Taylor review?

Yes, I do. I am grateful that I gave way, because my hon. Friend has put it better than I could have and has raised another question for the Minister.

Let me conclude. There have been two great movements in our recent history as a country. One was the movement of people from the countryside into towns. When that happened, decent people sought to find out what was happening to their fellow citizens, because they were horrified by the exploitation that they suffered. There were local statistical societies in all our towns, and the theme was taken up by the House of Commons in Select Committee reports, by the House of Lords, by royal commissions, and by the Government, who set up a national statistical service.

The second big movement, which has occurred in our lifetimes—one is sometimes unaware of just how big it is—has been the falling away of the bottom of the labour market. We are now in a situation that I would have thought inconceivable when I first came into the House in 1979. People are scrambling around for jobs. When I was growing up, there was the idea—almost a law of nature—that our economy would produce jobs that gave people wages that allowed them to marry and begin their families securely. For an increasing number of our fellow citizens, that world has long since passed.

I will not be controversial, as the previous debate was, but what has been happening at the bottom has been much affected by what the Government call welfare reform, but I prefer to call welfare cuts. However, in the spirit of the Minister—who I know is one of those Tory Members who has a sense of what the human spirit is about and why we are here—I ask him to help us in just one small area: the protective role that transport authorities could play.

I also hope that the Minister will reply in the spirit of the Prime Minister’s pledge to throw a new form of protection over the bottom end—the vulnerable tummy—of English society, which has lost out so greatly from the changes documented to us by our constituents. If we cannot be moved only by a wish to extend human dignity or to make a further commitment to the Prime Minister’s pledge, I hope the old money—the till—will play some part for the Chancellor. The way in which these companies are constructed means that they are fiddling: they do not pay their dues in VAT, national insurance or income tax, which means the rest of us have to pay for them. They are now registering returns on their very limited capital that are out of this world and should be tamed. In the west, with our democratic traditions, we usually look to government as one of the instruments for taming the wildness of wild capitalism. I happily turn over to the Minister.

What a delight to respond to the right hon. Member for Birkenhead (Frank Field)! He knows that I admire him almost as much as I admire Lord Birkenhead, F. E. Smith, whom we have discussed from time to time and who said that

“glittering prizes”

were available

“to those who have stout hearts and sharp swords.”

The right hon. Gentleman has both those qualities, as he has illustrated once again by bringing these important matters to our attention.

I had a long speech prepared for me by my civil servants, whom I hold in very high regard, but I am never inclined to deliver speeches written for me by anyone else, and I am certainly inclined to try to answer the right hon. Gentleman’s specific points. It seems to me that Westminster Hall debates have to fulfil a greater purpose than simply parroting what the Government have already thought or said. They have to move policy on, do they not? At least, that is how they should operate. We will try to make sure that that happens today.

In a way, the right hon. Gentleman has already set the scene for me, but perhaps it is worth affirming some of what he said. I am aware of concerns about the changing character of the landscape for taxis and private hire vehicles. He is right that technology has played a big part in that, and technology has a consequent effect on consumer expectations and demands. Supply changes to meet those demands but it stimulates changing demands, too, and that is precisely what has happened in this area.

Taxis play an important part in the life of London. I use taxis a lot, as do my family. My son, who is in the Public Gallery today, is a devotee of London cabs, like many others before him and, I hope, after him. London taxis are iconic. One thinks of London—indeed, the whole kingdom—in terms of certain totems and emblems. One of those emblems is the London black cab. The right hon. Gentleman described my concern for the human spirit, but I also have a profound concern for aesthetics, inasmuch as they are part of how we perceive the world: how we come to terms with our own consciousness of reality. London cabs are a part of that.

London cabs provide a vital service, not just to tourists but to Londoners. It is true that the tourist looks to the London cab for the reasons that I have given—they see them as iconic. If a tourist comes to London, they want to ride in a black cab just as, if they went to New York, they might want to ride in a yellow one, but cabs also provide valuable utility.

The history of London cabs is that people know what they are going to pay, they can be confident of the driver’s ability to get them where they want to go as quickly as possible and London cabs have a good record on safety and security, which of course are important matters when one gets into a vehicle with a driver one has not previously known and perhaps not even met. Those things are of profound and lasting importance.

None the less, requesting a vehicle via an app, whether a taxi or a private hire vehicle, is increasingly popular with the public—and unsurprisingly so. The desirability of being able to call up a vehicle as required is obvious, and that is having a quite significant effect on the market, as the right hon. Gentleman described. The difference, as I am sure those in the Chamber know, is that in addition to dealing with pre-booked journeys, a taxi can ply for hire in the area in which it is licensed. That cannot be done by a private hire vehicle.

These things lead to different models of ownership and employment, as the right hon. Gentleman said. The emergence of a different set of protocols, if I can put it in those terms, in that area is also significant. He mentioned the various reports—I have read them all, by the way, including “Sweated Labour” and the Select Committee report. The Committee did a great service in looking at these matters closely, in respect of not just taxis and private hire vehicles but more widely.

The right hon. Gentleman will be aware of all those reports, as I am, and of the ongoing legal case regarding the employment status of drivers in the private hire vehicle sector. He made it clear at the outset that his expectations of me were set very low—I do not know if you noticed that, Mrs Moon; I thought a bit too low, given what I will say later—and made it clear, in his usual spirit of fairness and reasonableness, that there is a limit to what I can say. I certainly cannot say anything that might prejudice that legal case, which is ongoing.

What I can say is that the emergence of so-called disruptive businesses—I use the term in its strict sense; I hope it will not be misinterpreted—through the application of new technologies enables new ways of working and creates new products and services. As I said, it is a different relationship between supply and demand. That has an appeal to certain consumers and provides a service that perhaps has not been provided before. However, those benefits must be balanced against the impact on those who work in these new ways. Greater flexibility in working arrangements can increase employment opportunities for those who have other commitments or aspirations, but we must equally be aware of the negatives. Nor must we regard the traditional private hire vehicle driver and operator relationship through rose-tinted spectacles and perceive it as some sort of ideal where operators work solely in the interests of drivers.

I am aware of the concerns raised by the right hon. Gentleman and others about the risks in respect of employment. Let me lay my cards on the table: I take a very strong view about the rights of workers. I am proud to be a member of a trade union. My father was a shop steward. I have enjoyed very close relationships with the trade unions throughout my time in each of the six Departments in which I have been a Minister, and continue to do so in the Department for Transport.

One problem with this sector is that because of the character and nature of employment in it, significant numbers of people may well be under-represented or not represented at all by any body that can make a case on their behalf. That puts people at a considerable disadvantage. They may not even have reasonable expectations of what their entitlements ought to be. They may not know that they are being underpaid if they do not have the opportunity to express through the kind of collective arrangement that a trade union brings their entitlements—I hesitate to use the word “rights” for philosophical reasons that I will not go further on about today, because we do not have time.

Lawful entitlements to fair treatment are at the heart of what good employer-employee relationships are all about, and that is what the right hon. Gentleman has once again implicitly advocated by bringing the matter before us today.

I will. It is good to see the hon. Lady, who is now becoming such a regular feature in my transport life that I would have been disappointed had she not been here.

I listened carefully to what the Minister said about employment rights. Does he agree that because of the nature of mobile applications, there can be a temptation for employees, who feel under undue pressure, to work excessive hours? That can have a severe and detrimental impact on not only their health and wellbeing but, potentially, the health and wellbeing of other road users.

The hon. Lady is right. The relationship between the app or gig economy operators and their drivers is very different from what we have experienced previously. She is right, too, that that brings challenges and may even bring significant risks. I do not want to say too much, because a legal case is ongoing and the Taylor report, to which the right hon. Gentleman referred, is also awaited.

What the House needs to know is that I am very conscious of this matter. I do not come to it with any prejudices, apart from the prejudice that I have described, which is that people should be treated fairly in their place of work. I have always believed that and will do all I can to ensure it happens.

While the Minister may not be able to satisfy my demands today, are we able to conclude, from what he just said, that he would encourage transport authorities to interpret the law in the way that he thinks, so that the most vulnerable are protected? Uber says that stacks of workers are so pleased with what it does. If we are to believe Uber, any ruling would affect a minority, but a crucial minority. Can we expect him to say something about that today or will that follow on from the Taylor report, which might deal with this specifically, and about the particular issue that people should be able to earn the national minimum wage by hour of work? Uber gets round that for many people now.

I may have some good news for the right hon. Gentleman in that respect, but I will save that for the very end of my speech, in order to build excitement. When I begin my pre-peroration, he can wait expectantly for the final part of my speech, in which I think I will be able to give him positive news of the kind he just mentioned.

I move now—I like to give people notice of these things, so that excitement can build—to my pre-peroration. The commitment I gave to the interests of working people and their pay and conditions is unsurprising, given the party of which I am a member. In my ministerial office, I have a bust of Lord Shaftesbury. Lord Shaftesbury, the great Tory 19th-century social reformer who, against Liberal opposition, did so much to free children from factories, fought for the ragged school movement and helped to reform asylums for those with mental health conditions. Mine is the party of Wilberforce and of Shaftesbury, as well as Disraeli, so of course I care about the welfare of the people and their interests. It may be unsurprising that I should do so, but that has to be a modern reality too. As the right hon. Gentleman said, we live in a different world now from the one that Shaftesbury, Disraeli and Wilberforce encountered, but human frailties remain, and the human willingness to do bad things, unfortunately, is endemic following the fall from the state of grace.

Having said all that, let me move to what I propose to do about this matter. It is not good enough simply to wait for the Taylor report, although we must consider that carefully, for it is a wider report. Dealing with the changing employment conditions we have briefly considered today, I am going to set up a working party in my Department, with an independent chairman, to look at the specific things that the right hon. Gentleman has raised as a result of this debate. I will consider in due course the terms and conditions of that working party, its membership and how it might have an effect on future policy.

Furthermore, as the right hon. Gentleman requested, I will look at the guidance issued to local authorities. They may be unaware of the extent of their powers and certainly of their ability to use them. He is right to say that there are problems with different local authorities interpreting those powers in different ways, and it seems to me very important that we give clarity about that through the advice we offer to local government.

Finally, I will engage with both him—I invite him to come to my Department and meet my officials accordingly—and the representatives of drivers and operators. Let us have a grown-up discussion about this. Let us expose what is wrong and celebrate what is right, but there will be no veil, no mask and nowhere to hide for people who do not do the right thing.

As people leave the Chamber, may I advise officials that they should not enter the Chamber and loiter around the door before the debate is called? Thank you. It is warm, so if anyone wishes to take their jacket off that is fine.