A New Regulatory Turn for the United Kingdom? Evaluating New Government Proposals to Tackle Labour Market Exploitation
Keywords: labour market regulation; informal economy; enforcement agencies Overview
This paper will explore recent proposals in the United Kingdom to strengthen sanctions against exploitative employers and to reform the relevant enforcement agencies. These are ideologically surprising and come close to establishing a moral case for intervention in the labour market. They will be evaluated using a study of working conditions in one sector of the growing informal economy, the car wash industry.
A New Regulatory Turn?
The proposals in question emerged through autumn 2015 and are aimed at “exploitative” employment practices in the broadest sense. They increase the legal force of the sanctions available; extend the investigative powers of regulatory bodies; and improve the co-ordination of enforcement action. A new offence of “aggravated breach of labour market regulation” is to be created, with a potential criminal sanction of two year’s imprisonment. A Director of Labour Market Enforcement is to be established with the power to set priorities for enforcement bodies and the resources to underpin them. Finally, the remit of the Gangmasters Licensing Authority will be extended to the Gangmasters and Labour Abuse Authority.
The force of these changes is amplified by the language used to justify them. Parts of the Government’s response to consultation come close to elaborating a general case for labour market regulation with an underpinning moral imperative.
Such a regulatory turn feels radical indeed. The UK is distinguished usually as a leading exemplar of “liberal capitalism”. Alongside commitments to reducing the economic role of the state and to lowering taxation, a focus on labour market deregulation has become almost hegemonic. Governing alone since 2015, the Conservative Party has pushed to the full its claimed mandate to further weaken and undermine the trade union movement. Both the extent of reform and the rhetoric used to justify it are deeply surprising in this context and certainly require investigation.
Approach of the Paper
The paper evaluates these policy initiatives against the backdrop of a case study of informal working in the hand car wash industry. Twenty sites across a single city were logged and observed. A total of thirty seven direct interviews was conducted with workers; three with business owner-workers; and six with industry bodies and regulators. A further tranche of fieldwork, currently underway, focuses specifically on the response of regulators to this developing policy framework.
Though the proposals contain much that is potentially beneficial, our data highlights key constraints on the effectiveness of such a regulatory strategy. Aside from the issue of resources for these new institutions, the proposals are undermined by concurrent weakening of collective rights through trade union organisation and of individual access to justice at employment tribunals. Of particular importance in the context of fragmenting inter-firm relations is the ability to identify joint and several liability across employers.