The Carousel

Weep for the deprived gig-journalist!

Unlike the formal press , I have not had an opportunity to leak the Taylor report.  I am like the workers that Matthew Taylor has been investigating, I have the freedom to do what I like but do not the tools to work with (unlike it seems those who have an embargoed copy of his Report).

Flexibility or choice?

Critics of the gig-economy argue that it gives employers flexibility, but workers no real choice.

The “flexibility” that the gig economy provides workers is illusory, since most workers have little choice but to comply to the conditions of the firm they contract to.

However, most people can choose to work in the gig economy or in more formal work structures.

For the most part, the gig economy is not abusing casual labour but organising it.

Around central London, you cannot cross the road without considering a fast-moving delivery person. The ones I meet are a happy bunch taking advantage of their youth and health to their and my delight. London is a better place for the gig economy in many ways.

What worries the TUC and GMB in particular, is when casual labour hardens into permanent work. Here people may get trapped in casual labour and find no way out.

I don’t know to what extent this is happening, I want to find out more, as this is the point where I start thinking about the link between work and pensions.

My own experience suggests that there are ways out of self-employment into what my parents called “a proper job”. My first 10 years of work were as a self-employed gig-worker, my last 22 in full employment

All aboard the carousel?

I volunteered,  being a member of the RSA, to help Matthew Taylor. I suspect that Matthew took one look at me and smelt “self-employed insurance salesman on the make”! 25 years ago, he’d have been right! I could have told him that not much has changed in a quarter of a century!

I worked in the gig economy of Oxford Street spivs (Liberty/Porchester/Kabel-Halsey/General Portfolio etc.) back in the eighties. We had no rights, were abused by our so-called  employers and most of us left with a profound contempt for financial services.

I didn’t leave.   But I retain a concern for young vulnerable people who can find themselves getting dragged into the wrong kind of work – on the promise of pseudo-freedom.

I ended up with a large tax bill and a larger overdraft with little to show for my endeavours. Giving up self-employment (cessation) was tough – like giving up cigarettes. But I had the choice- just.

The flexibility is always with the employer

For many insurers including Merchant Investors, Lloyds Life, Irish Life, General Porfolio, Target Life and to a lesser degree Abbey and Allied Dunbar, the gig-economy was the source of almost all new business

The insurance industry turned a blind eye to the quality of its new business and the labour practices of the brokers who organised it.  Many people like me were forced to miss-sell shamelessly.  It took the Financial Services Act (1987) to create some semblance of order. The insurance companies  paid a  price through restitution , but it took a couple of decades before that price was paid.

Now the insurance companies see the 6m or so self-employed – served in the past by insurance agents like me, as new business again.

Last week, Aviva and Royal London published a joint report suggesting that the self-employed could have the right to have 4% of their wages docked into a workplace pension.

As there is no gig-economy of insurance salesmen able to sign up the rabble, the insurers have suggested a Carousel be built, which will fit them up with an approved pension depending on where they are standing in the queue.

What passing bells for those who work as cattle?

This ludicrous suggestion reminds me that those who sit at the top of insurance companies have never sold insurance one on one. I know the guys (and they are mostly guys) at the top of Aviva and Royal London. They never worked in the gig-economy and they certainly don’t know the potential customers they’re trying to fit-up via this Carousel.

If we really did think that all workplace pensions were the same then we could fit all the self-employed up with NEST and be done with it. Or we could get the insurers and private master-trusts  to bid against NEST for exclusivity.

But we don’t do things like that in the UK. We set up workplace pensions so that employers had not just the right but the obligation to choose the workplace pension offered to staff.

I am in the trade press this week saying just this.  Insurance companies can waffle on (listen to John Lawson for proof), but the Taylor Report is not about bolstering their new business figures.

The Carousel shows just how little credence insurers give to the individual’s capacity to make informed decisions. If they had half a mind, they could adapt technology such as that we use at http://www.pensionplaypen.com to allow the self-employed a free comparison of their options.

Ironically, the insurers who abused the gig-economy back in the eighties to build their unit-linked businesses are now back at the same trough, this time using the nudge technologies to distribute to the types of people who used to sell their wares!

If I had worked on the Taylor enquiry, I would have told Matthew to stay well clear of financial services companies. The Taylor report should not be used as a door-opener for bulk sales of insurance policies.

The positives of the report

Having listened to Matthew Taylor, I would be surprised if the report went so far as to make specific recommendations on pension inclusion.

The DWP have set up an expert advisory committee (which includes Standard Life’s Jamie Jenkins) looking at this issue as part of the auto-enrolment review. No doubt they will be reading the report and adding it to their general understanding of the self-employed.

Jamie was commenting on twitter yesterday about those contributing to the debate (I assume neither he nor Andy Michael knew of my work history)

Andrew, certainly correct in my case, hence my hesitation to jump to any conclusion, and to hear the voice of those who are self-employed.

— Jamie Jenkins (@pensionsguy) July 10, 2017

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If that committee wants to know what it is like to be working as a self-employed person in their twenties and thirties, they can speak to me – I remember selling Standard Life endowments for you Jamie!

I remember having to lapse my own savings  policy to pay for three parking tickets and the rent! Those who argue for compulsory savings for the self-employed should try fending off the bailiffs – it’s not much fun!

The Taylor report needs to speak to and for the millions of people marginalised by poor work. We need to make poor work- better work. That cannot be done just by taxing the pay-packet with compulsory pensions and there is certainly no dignity in this Carousel.

The virtue of the Taylor Report is in its reading. Hopefully that is what I’ll be able to do, later this morning.