29 January 2014

By Sarah Glenister, IER staff

In a speech yesterday (28 January 2014) to the National Youth Employment Summit, Lord Freud celebrated the new “flexibility” of workers expected following the introduction of Universal Credit (UC).

The new welfare scheme will see people continue to receive some benefits once in work until they reach a certain earnings threshold, but only on a ‘conditional’ basis that they continue to look for better and higher paid work.

UC is part of the government’s aim to “make work pay”, which the Coalition has repeatedly put down to welfare dependency, rather than low wages. This is an interesting conclusion in light of the fact that most housing benefit claimants are already in work, but get paid so little they cannot afford to keep a roof over their heads.

Additionally, while many of the policies associated with UC are superficially laudable - such as removing the 16-hour threshold under which claimants can work and receive benefits, allowing them to take on more hours without fear of losing money - the ideology behind them is somewhat suspect.

If people are afraid to take on more work in case they lose state funding and can no longer afford to live, does that not tell us something about the level of wages in this country, and the number of employers willing to provide stable, full-time jobs?

Is this scheme really all about helping people back into work?

It seems Lord Freud was prepared to be open about its real aims when he told the Summit the government’s goal was to “create a system that is flexible and responsive to the modern labour market”.

“You should find more people willing to take on irregular work,” he boasted. Note that seasonal or short-term jobs are normally taken by those who are desperate for any income and have had to sacrifice stability and security.

“Employers I’ve spoken to are welcoming the benefits Universal Credit will bring to their businesses,” he added. “They say it will be easier to recruit and develop staff as their employees will be better prepared for work and be more flexible with their hours.”

So businesses will benefit from workers pushed into a corner, who no longer attempt to stand up for their right to a proper work-life balance or a predictable work schedule.

Catering recruitment company Blue Arrow told the government that they expected part-time positions and temporary work would now become more popular. Lord Freud also noted that people on benefits will now be able to take on short-term work: “They can accept a job for one month and know they won’t have to reclaim when that job ends,” he explained.

This hardly explains how the government hope to help people off benefits and into long-term secure work. It is likely those who refuse short-term work to look for long-term work will be sanctioned for not ‘taking any job offered to them’, and the taxpayer will continue to support these low-income and vulnerable workers instead of putting pressure on employers to take responsibility for their workers by paying them a decent wage and offering them a secure position.

In fact, UC continues to support some contracts of employment that have already caused public outrage, including zero-hour contracts. These agreements mean that workers are not owed any hours of work but can be called in at any time. Many even include an exclusivity clause, which means that employees cannot look for additional work, but are forced to wait by the phone for a call that, some weeks, simply might not arrive.

“Some of you have asked about zero hours,” Lord Freud said. “These contracts support business flexibility.”

“Universal Credit is not prescriptive about the hours people work, provided they are able to earn enough to support themselves and their families without undue reliance on state benefits, and a zero-hours contract may well be consistent with that,” he added.

The Institute of Employment Rights wishes to remind the government that holding a reserve army of unemployed people, desperate enough to take on jobs that may indeed provide “business flexibility” but offer workers little quality of life, is unethical and absolutely unacceptable.

While it is important that those on benefits are supported by the state to start work without losing out, this is not just a matter of tapering down welfare, it is also one of encouraging business to provide the conditions within which employees can thrive. That means decent pay, decent conditions and a secure, full-time job.