Theresa May’s hopes of getting Labour MPs to back her Brexit plans have suffered a major blow after she was accused of delaying moves to boost workers’ rights.
Trade unions and Opposition backbenchers accused the prime minister of quietly postponing until next year a plan to close a loophole that allows bosses to keep staff on insecure contracts and low pay.
In a bid to win round Labour MPs, May announced plans last month to repeal the so-called ‘Swedish derogation’ which means UK firms can opt out of EU rules to pay agency workers less for doing effectively the same job as permanent staff.
Around 1.2 million people in the UK are employed as agency staff and studies have estimated that those affected by the loophole suffer a pay penalty worth around £300m every year.
Amid pressure from unions and others demanding the new rights should kick in this year, business secretary Greg Clark hinted in the Commons he would reconsider the timetable for the changes.
But in a written parliamentary answer, business minister Kelly Tolhurst has now revealed that the reforms won’t kick in until 6 April 2020, in order to “allow time for businesses to realign their contractual arrangements, both with their workers and the end hirers”.
Labour’s Stephanie Peacock, who quit her party’s frontbench to vote against a second Brexit referendum, said the decision would leave agency workers unprotected for the current and the next financial year, even though the Commons approved the repeal this month.
“The Prime Minister keeps asking us to trust us but once again she has shown exactly why we can’t,” she told HuffPost UK.
“The Business Secretary promised me in the Commons that he’d reconsider this delay only for his department to renege at the very first moment they thought they could get away with it. We simply can’t take their word for anything, let alone on an issue as important as our fundamental rights at work.”
Clark has moved to enhance workers’ rights in recent weeks to win round MPs in Leave areas to back the PM’s Brexit deal.
But trade unions, whose opposition to a second referendum had been seen by No.10 as a route to a compromise, made plain their disappointment.
Howard Beckett of Unite accused the PM of “over promising and under delivering”.
CWU General Secretary Dave Ward, one of the strongest opponents of a second referendum among Labour’s major affiliated unions, said: “The Government is exposing the fact that it does not understand or care about the lives of working people.”
And Sue Harris of the GMB union, which occupies a pivotal role in Labour’s Brexit debates, added that “just when the government claims it wants to listen trade unions, they are sweeping issues like this under the carpet”.
Last year telecoms giant BT was exposed by the CWU trade union for exploiting the loophole to under-pay thousands of call centre staff, including those taking 999 and 100 calls for emergency services.
Workers were paid just £8.50 an hour, around £500 a month less than the standard rate, even though they were in effect permanent staff who were never deployed elsewhere by the agency.
Clark had announced that he was accepting the recommendation of the ‘Good Work’ Review to close the loophole. The review, undertaken by Matthew Taylor, had first been commissioned by Theresa May in October 2016 and reported in July 2017.
A BEIS spokesperson said: “Through the Good Work Plan we committed to the biggest upgrade of workers’ rights in a generation. As the Prime Minister announced last month, we have plans to repeal the Swedish derogation, which allows employers to pay their agency workers less, and we are committed to enforcing holiday pay for the most vulnerable workers.
“From April 2020 all agency workers will be entitled to the same pay as permanent staff after 12 weeks in a job. This government is not just protecting workers’ rights, but enhancing them.”
But a Labour source said: “It should have been obvious to any PM that workers’ rights was a critical issue for a number of Labour MPs in Leave seats but unfortunately we’ve got Theresa May.
“She could act on issues like agency workers without changing a dot or comma of the withdrawal agreement. Instead the very MPs whose votes she needs now think that not only will she always be driven by the right of her own party but also that you simply can’t believe a word she says.”
Labour MPs believe that May could still at the eleventh hour win over some of their colleagues in Leave areas if she agrees to a Lisa Nandy amendment aimed at giving parliament a vote on any future trade deal.