Government needs to take ‘visible enforcement action’ after ditching plans for workers’ right watchdog 

Business Secretary Grant Shapps has shelved the Tories’ manifesto pledge of creating a “single enforcement body” to clamp down on rogue employers with massive fines to protect vulnerable workers as flexible working arrangements in the gig-economy become more prevalent.

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Under the plan three existing agencies - the Gangmasters and Labour Abuse Authority, the Employment Agency Standards Inspectorate and HMRC’s National Minimum Wage Enforcement  - would be brought together to make a “one-stop shop” to improve enforcement through better co-ordination and pooling intelligence.

In line with Boris Johnson’s manifesto commitment in 2019, the body would have new powers to tackle non-compliance, and enforce statutory sick pay, holiday pay and transparency in supply chains/modern slavery statement reporting.

Shapps said last week that the government would now focus on making sure the existing bodies are effective.

He said the plans had been shelved “given that we’ve spent two years of this Parliament plus fighting Covid". 

“It may well be with two years left to go that we’re still able to address some of that,” he told the Commons business committee.

“But what we’re more interested in is making sure that the bodies that are already there are operating effectively.”

Shapps also said the employment bill is no longer “on the cards” after it was left out of every Queen’s Speech since the last election. 

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Crawford Temple, CEO of Professional Passport, and independent assessor of payment intermediary compliance said the plans were “always going to be complex to achieve” but that the government needs be proactive in taking action to shut schemes down.

“With plans shelved, it is more vital than ever that the Government now demonstrates its commitment to stamping out non-compliance and malpractice in our industry. 

“It is shocking that schemes that lure workers into financial hardship when they can ill afford it are allowed to thrive. 

“The Government continues to drag its feet on taking visible enforcement action to find the perpetrators of these schemes and close them down – more resources and investment are needed if we are to clean up an industry that continues to attract negative headlines.”

Julia Kermode, founder of IWork, said, “This is a bitter blow for workers, who time and time again find themselves exposed to the risks of the unregulated umbrella sector – whether that’s being lured into working through tax avoidance schemes or being forced to use certain companies against their wishes due to restrictive preferred supplier lists."