Out of pocket expenses

PatriciaHollis.jpgPatricia Hollis puts a human face on zero hours contracts

At least 1.4 million people are on Zero Hours Contracts, maybe nearer 2 million. They are in cleaning and domiciliary care, retail and catering, call centres, construction and customer service. Over half earn less than £500 a month so won’t qualify for a state pension. Most are on or around the minimum wage. 40% of them are not allowed to work for anybody else. They are on call, unpaid, until required at perhaps an hour’s notice. They are hoarded but not used. A sort of just-in-time stock control applied not only to tinned tomatoes but to staff as well. And 75% find their hours vary weekly.

Let’s say that over a month as a lone parent you work 20 hours in the first week, 15 in the second, 10 in the third, and 22 in the final week. In weeks one and four you get working tax credits to top up your wage. So then what do you and your children live on during the middle two weeks? If you work less than 16 hours a week you might get Jobseekers Allowance. But if you are on call you are not available for other work, and therefore won’t qualify. So you turn to pay day loans to keep you afloat, getting deeper into debt.

Each week you have different earnings to report to HMT (tax credits) or DWP (benefits). Paid in arrears, of course. So the money doesn’t come when you need it most. Each month you have different earnings to report to the local authority for your housing benefit, and for your council tax reduction. It takes weeks to process each claim, and that too will be paid in arrears. Meanwhile, your rent arrears grow and you fear eviction. Not surprisingly many lone parents prefer the security of a low but predictable benefit income to the snakes and ladders of ZHCs. They are carrying all the risks of an exploitative labour market without a social security system geared to help them.

In a 24/7 economy, we need a flexible labour market, but fluctuating demand can largely be predicted. Why does Boots need ZHCs, but not M&S? Why Sports Direct but not Halfords? ZHCs are lazy management. Too often they are exploitative management as well. 

A friend’s daughter works for McDonalds. She doesn’t know until the previous Friday what hours she will get for Monday. She cannot plan her life. She cannot budget. She cannot study. She cannot work another job alongside it. If she was not living at home, she couldn’t rent as landlords want evidence of steady income.

A call centre worker told the union Unite that she had worked for a multi-national firm for 5 years. “I am only informed if I have shifts one week in advance and the hours I am given for the week can range from 0 to 48 … I regularly feel anxious about whether I will be able to pay the rent and put food on the table”.

Universal Credit, which integrates in and out of work benefits, should help. But it won’t. It is in a mess, and I believe needs to changes its processes. 

It pays a month in arrears, although on request it will pay fortnightly. It pays housing benefit to tenants, but they want it paid direct to their social landlord to avoid arrears. It is digital on line, but 40% of tenants affected by welfare reform have no access to the internet; and in any case there are real worries about the stability of the IT system. It needs paper back up. DWP has ditched the social fund; but more budgetary loans are needed to smooth income and abate debt.

ZHCs are where so-called “flexible” labour markets meet inflexible social security. BIS and DWP must get their act together. 

Baroness Patricia Hollis is a backbench Labour Peer and former Minister for Work and Pensions

Published 10th June 2014

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