The Lib Dem & Tory coalition government routinely manipulates statistics to suit its own ends. This is true across many areas from flood defence spending to welfare ‘reform’.
On this website we have drawn particular attention to the way in which the Lib Dems and Tories, like clapped out music hall illusionists, use smoke and mirrors to obscure the truth about (un)employment. Data released by the Office for National Statistics (ONS) and Her Majesty’s Revenue and Customs (HMRC) show we are right.
The government claims that it is getting Britain back to work.
On 19th February the Lib Dem & Tory coalition government announced the latest unemployment figures that appear to show that the overall unemployment figure had fallen to 2.34 million.
Employment Minister Esther McVey claimed this provided more evidence the government’s economic plans were working. She said, “Record numbers of women are in work and youth unemployment continues to fall, which means more people have the security of a regular wage and can plan for their future.” (Our emphasis)
We think Ms McVey is wrong: zero-hours contracts and rising self-employment are two reasons why.
Zero-hours contracts do not provide wage security or allow people to plan their future
There has been a three-fold increase in zero-hours contrasts since the election in 2010.
With a zero-hours contract:
1. A worker is not contracted to work either a set or regular number of hours but is only paid for the number of hours that they actually work.
2. He or she has to ‘standby’ in case of work and this makes financial planning and scheduling other work opportunities very difficult and child-care arrangements almost impossible.
3. There is no requirement for employers to pay the usual entitlements such as holiday payments.
4. Employers using zero-hours contracts include Amazon, Buckingham Palace, Sports Direct, the social care system, Houses of Parliament and the National Trust.
5. Some employers bar their employees from ‘making up’ their hours with work from other employers as it reduces ‘flexibility’. This is sometimes called an exclusion clause.
6. Employment on zero hours contracts makes calculating benefits and tax credits difficult. Remember, for example, most people on housing benefit are in work.
7. Some zero hours contracts require workers to be available to work abroad.
8. Those who are employed on zero-hours contracts, even if that means they work just two hours one week and three the week after, are counted as being ‘employed’.
Until now the ONS has had trouble tracking people who are on zero-hours contracts but following requests by Labour’s Shadow Business Secretary, Chuka Umunna, it has now released new and very startling figures.
The new figures showed that nearly 583,000 employees – more than double the government’s estimate – were forced to sign up to zero-hours contracts in 2013..
Mr Umunna said 9th March: “Under David Cameron we have seen employment becoming less secure at a time when families are facing a cost-of-living crisis.”
He claimed that previously zero-hours contracts had been a marginal and niche element of the labour market. However, they have now become the norm in some areas such as social and personal care and the voluntary and public sectors under this government.
Mr Umunna says that Labour would tighten up the rules to outlaw zero-hours contracts where they exploit people and turn around the rising tide of insecurity we’ve seen under the Tory-led government.
Ed Miliband told the TUC last year that he would act against the exploitation of workers on zero-hours contracts by banning employers from insisting employees on the contracts are available even when there is no guarantee of any work. He also said he would end “exclusivity clauses” and stop the use of the contracts when employees are in practice working regular hours.
Becoming self-employed is no guarantee of income stability.
HMRC has revealed that self-employed women earned 40% less than self-employed men in 2012. Its Personal Income Statistics 2011-12 report shows that, while average income for a self-employed man was £17,000, the equivalent for women was just £9,800!!
HMRC shows that the gap is widest in London followed by the east of England and the east Midlands. In almost every region apart from London, the south-east and Scotland, self-employed women earned less than £10,000 a year. This is below the minimum wage.
What is going on here?
The ONS has shown that number of people who register as self-employed has increased by 338,000 between 2008 and 2012. It also found that women have made up more than half the 10% growth in self-employment since the recession began.
The Chartered Institute of Personnel and Development (CIPD) estimates that the rise in self-employment has compensated for around 40% of the loss in employee jobs. According to the CIPD if this had not happened unemployment would be around three million. Women have been the most affected.
Given that the average income for self-employed women is lower than the minimum wage then why have so many chosen self-employment?
Some economists suggest that many who register as self-employed may have done so after failing to secure employment.
Frances O’Grady, general secretary of the TUC, says that whilst there may be good reasons for being self-employed, “it would be naive to think that all these workers are really budding entrepreneurs.”
Ms O’Grady goes on to argue that bogus self-employment for workers means they miss out on vital rights at work – such as paid holidays and employer pension contributions.
Scarlet Harris, spokesperson for the Women’s Budget Group said that this ‘self-employment’ has nothing to do with entrepreneurialism. She argues,
“Clerical, cleaning and caring work, which is predominantly carried out by women, has experienced some of the fastest growth in self-employment in recent years. These women, who already suffer poverty rates of pay, are now having to contend with the poor working conditions and complete lack of job security that self-employment brings. These shocking gender pay gap figures should end any delusions people have about the UK’s four million self-employed workers.”
The increase in the number of women becoming self-employment might actually be government policy. A BBC investigation last month found that advisers exhort individuals on the welfare-to-work scheme to become self-employed, in order to shift them from unemployment benefits to working tax credits.
Bringing an end to smoke and mirrors politics.
We began this post by quoting Employment Minister Esther McVey’s claim that the latest employment figures showed more evidence the government’s economic plans were working. She said. “Record numbers of women are in work and youth unemployment continues to fall, which means more people have the security of a regular wage and can plan for their future.” (Our emphasis)
The evidence we have provided concerning the zero-hours contracts and self-employment flatly contradicts Ms McVey’s claim.
– 583,000 people are on zero-hours contracts, a three-fold increase since 2010;
– there has been an increase in the number in self-employment to 4.4 million over the same period;
– the average income of self-employed women is less than the annual minimum wage.
If this is McVey’s vision of a wage security and a financial basis for people to plan their future then we are in serious trouble. And if the government continues to use smoke and mirrors to obscure the truth from the public then the trouble can only get worse.
This website and the Labour Party in general will continue to show what is really going on.
If you have a spare moment you could try emailing Lib Dem MP, Greg Mulholland and ask him to explain the truth behind the official (un)employment statistics – or you could save your energy and simply back Labour.
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