Manufacturing’s lukewarm response for Miliband agency worker vow

Posted on 6 Jan 2014 by The Manufacturer

Labour leader Ed Miliband’s vow to amend the UK’s interpretation of the Agency Workers Directive has been met with a lukewarm response from the manufacturing sector.

The proposals, announced yesterday by Mr Miliband writing in The Independent, would mean a raft of changes to the existing plan, with the Labour leader promising to stop firms paying agency staff less than permanent workers by closing a loophole in the law.

Mr Miliband, who attributed low-skilled immigration with making the cost of living crisis worse, believed the country needs to change its “chronic dependency” on low-skill, low-wage labour.

But the proposed closing of the loophole has been met with a lukewarm response from the UK manufacturing industry, following earlier criticism by The Confederation of British Industry.

Iain Maxted, founder of South Wales-based SME Guardian Technologies, said: “its high time politicians, both in government and opposition, stopped interfering in free markets where their interference will only increase costs for British industry.”

Maxted, whose company specialises in down-hole tools for the global upstream market, added: “No agency worker has to take a job at less than a reasonable going rate and if there is a surfeit of workers of a certain type then the wages are governed simply by supply and demand.

“I would suggest Ed and his opposite numbers in government would do far better by stopping agency workers being paid more than employed staff, such as is rife in the NHS and which costs the country hundreds of millions every year.”

Dale Brimelow, director at Manchester polythene SME Duo, said despite using agency workers occasionally, they don’t play a major role in its business model and it is due to long term investment in its team which has contributed to the company’s success.

“We invested almost £100k in training and development last year and have a strong apprenticeship scheme – and this has produced our motivated and loyal team which has enabled us to maintain a consistent, high quality product,” he said.

Mr Brimelow added: “In our view politicians should primarily concentrate on creating a growth-friendly environment, where companies have the stability they need to create jobs.”

The leader of the opposition has found support from the Trade Union Council (TUC), which claimed agency staff are paid up to £135 a week less than permanent staff despite working in the same place and doing the same job because of the loophole.

Owen Tudor, head of the TUC’s European Union and International Relations Department, said: “The Labour leader’s commitment to end the so-called ‘Swedish derogation’ in the regulations implementing the EU Temporary Agency Workers Directive is a welcome step forward in re-regulating the British labour market.”