Care Sector

Lord Kennedy of Southwark Excerpts

Tuesday 25th November 2014 Lords Chamber

[Lord Kennedy of Southwark (Lab)]

My Lords, like other noble Lords who have spoken in this debate, I congratulate my noble friend Lady Kingsmill on securing this important debate today and on the review that she undertook into the working conditions in the care sector, which certainly deserves more attention in the media. The review is an important marker that highlights some of the most pressing issues surrounding working conditions in the care sector and how unacceptable these conditions are. It is for government to take action to deal with the worst excesses. The noble Baroness, Lady Gardner of Parkes, highlighted some of those in her contribution. My right honorable friend in the other place, Mr Andrew Smith, highlighted some of these issues in the Westminster Hall debate held on 14 November—as my noble friend Lady Andrews mentioned.

In my remarks this evening I want to talk about the working poor, the problems that they face and the fact that the care industry has lots of people working in it who can be described as working poor. Maybe some years ago it would have been suggested that poor people are those who are unemployed and have no job. We have also talked about and identified pensioners who are in poverty, but this concept of working poor and the fact that this is growing should be a matter of much regret and shame. My right honourable friend Andrew Smith quoted Winston Churchill, who spoke in the other place in 1909. He said:

“It is a serious national evil that any class of His Majesty’s subjects should receive less than a living wage in return for their utmost exertions … where you have what we call sweated trades, you have no organisation, no parity of bargaining, the good employer is undercut by the bad and the bad by the worst; the worker, whose whole livelihood depends upon the industry, is undersold by the worker who only takes up the trade as a second string … where these conditions prevail you have not a condition of progress, but a condition of progressive degeneration”.—[Official Report, 28/4/1909; Commons; col. 388.]

Things have without doubt improved since 1909, but there are unfortunately numerous examples such as those referred to in this debate where bad practice exploits workers and people are treated very badly, and it is the duty of government to protect workers from this exploitation. I would say that the Government will have to be a little more proactive in this area to convince me that this is something they are truly committed to delivering on.

Returning to the point I made about the working poor, this sector employs the vast majority of people in the private sector or in the voluntary sector, amounting to about 76% of the total workforce of approximately 1.15 million, with nearly two-thirds working in private establishments. It is a matter of much regret that the sector has high levels of non-compliance with the national minimum wage, to which my noble friend Lady Andrews referred, and I hope that the noble Earl will tell us what will be done to make good this terrible wrong.

The growth in zero hours contracts in this sector, to which my noble friend Lord McKenzie of Luton referred, is generally encouraging exploitation of workers and making life difficult and unstable. Some people may like the ability to fix their employment hours week by week or day by day but I contend that it is a significant minority. According to the latest report by the Joseph Rowntree Foundation, insecure, low-paid jobs are leaving record numbers of working families in poverty, with two-thirds of people who found work in the past year taking jobs for less than the living wage—and a large number of those jobs will be in this sector.

The living wage is calculated at £7.85 an hour nationally and £9.15 in London, which is much higher than the legally enforceable but still breached minimum wage of £6.50 per hour. While not all these issues are in the noble Earl’s area of responsibility, I hope that he can see the perfect storm of people working in a sector where the majority of staff are on low wages, the problems that that can bring in not being able to provide an income to be able to look after yourself and your family, and the reliance on the benefits system. We should add to that the housing crisis, where we have low-paid workers who are not able to get a foothold on the property ladder and are unable to get into social housing, so they are forced into the private rented sector. Then we have banks refusing to lend to people, so access to affordable forms of credit is more difficult or not available at all. People are pushed into more expensive and unsuitable forms of credit and, as I said earlier, we have the perfect storm, because these things come together: they are not in isolation.

The care worker being exploited by an unscrupulous employer and not paid even the minimum wage will be the same person who is struggling to make ends meet. They will be the same person who goes to the bank and is unlikely to get the financial products they want at an affordable price. They may also, through desperation, purchase financial products that are totally unsuitable: payday loans, logbook loans and other unsatisfactory rip-off products. They are also more likely to live in an area that does not have an abundance of free cash machines—they will pay to get their own money out—and are more likely to live in poor accommodation.

As I said, not all of those things are in the noble Earl’s immediate area of responsibility, but as a member of Her Majesty’s Government I am sure he will agree these are serious matters that a joined-up and collective approach by government needs to address. In conclusion, I look forward to the noble Earl’s response, and that of my noble friend Lord Hunt of Kings Heath.