National Minimum Wage: Care Sector

Debate between George Freeman and Baroness Keeley

Wednesday 23rd March 2016 Westminster Hall

[The Parliamentary Under-Secretary of State for Life Sciences (George Freeman)]

It is a pleasure to serve under your chairmanship, Mr Rosindell. I start by congratulating the hon. Member for Sheffield Central (Paul Blomfield) on bringing this debate to the House. It has been a very helpful opportunity to focus attention on this important area, and it gives me a chance, on behalf of the Government, to make clear our commitment to ensuring that this issue is properly dealt with. I know he is a robust champion of workers in the care sector, and I want to praise him for his work in representing them here today.

I also pay tribute to the right hon. Member for Oxford East (Mr Smith), the hon. Members for Brighton, Pavilion (Caroline Lucas) and for Hampstead and Kilburn (Tulip Siddiq) and others who have taken such an interest in this issue. Opposition Members may be surprised to hear me single out and congratulate Unison and the Resolution Foundation, which have done really good work on behalf of workers in the sector by shining a light on the complex issues and some of the completely unacceptable practices that have gone on for too long.

I take this opportunity to pay tribute to our nation’s 1.5 million care workers, who, as hon. Members have said, work tirelessly to provide invaluable support to some of our most vulnerable citizens. Without their support in caring for the frail, the disabled and the elderly, we simply would not be able to cope as a society with the pressures of an ageing population. Hon. Members are right that we must ensure care workers are treated fairly by their employers and receive the money to which they are legally entitled—and that is a priority area for the Government, for this Minister and for the Minister for Skills, my hon. Friend the Member for Grantham and Stamford (Nick Boles), who leads on this within the Department for Business, Innovation and Skills.

Perhaps I could take this moment to make it clear, lest anybody watching the debate is in any doubt, that this generation of Conservatives in government strongly supports the national minimum wage. We are very proud that we have gone further and introduced the national living wage, as well as increasing penalties from £5,000 per employer to £20,000 per employee, which last year saw one investigation lead to a fine of half a million pounds.

We have also increased the budget for compliance by 50% since 2010 and strengthened the naming and shaming provisions. Let me send the strong signal that we will not tolerate non-compliance with the national minimum wage. It applies across all sectors, and the nature of the work that these care workers do, in a fragmented, challenging and geographically difficult sector, is no excuse for non-compliance.

I want to make it clear that any employer who treats the Government’s commitment to this space with contempt needs to be very careful. I am very disappointed to see that the Business, Innovation and Skills Committee’s request for Mike Ashley from Sports Direct to come and give evidence has not been responded to. Let me take this opportunity to say that contempt for this area of law is not acceptable, and to welcome the recent court case in which Caroline Barlow successfully prosecuted MiHomecare. It led to the court ruling that she and, by implication, others should have been properly paid. I welcome that, and the signal should go out very clearly to businesses, councils and all those who employ the low-paid that they have to abide by their duties under the law.

[Mr Philip Hollobone in the Chair]

[Barbara Keeley]

Most Members here would agree with the Minister about Mike Ashley, I am sure, and would applaud the Chair of the BIS Committee and the Speaker for the way in which they are handling the situation.

The key point I want to make is this: although it is good that the Minister is proud of the Government’s policy on the minimum wage, does he not think that the Government should have funded that? Is not the key problem the one that I outlined: the 2% precept will only raise £1.6 billion, but my local council will need £2.7 billion just to deal with these pressures? We cannot get to a position in which those in the care sector can pay the minimum wage unless there is funding for it, and that is the Government’s responsibility.

[George Freeman]

I will come on to the funding of social care, which is a major issue that we all face as a society and will require some pretty deep thinking over the years ahead. I will also describe the extra money that the Government have put in. Although there is never enough money, we have made this priority very clear.

It may help if I review how we got to be where we are today. In 1999, the national minimum wage came in. It was the first time that legislation had been introduced in the UK to ensure a minimum level of pay for virtually all workers. Its aim is to help as many low-paid workers as possible, end extreme low pay and ensure a level playing field for employers. We are absolutely clear that anyone who is entitled to be paid the national minimum wage or, from 1 April, the national living wage must receive it.

--- Later in debate ---

[George Freeman]

Perhaps I can come back to the hon. Lady on specific cases—I do not have them to hand. I just want to talk about what we are doing to deal with the issues that have been raised, but she makes an interesting point.

In the care sector, we have a particularly high incidence of workers who have not been paid the national minimum wage in the right way. Other sectors are hairdressing and retail, and there is some dispute about where the worst practice exists, but the care sector clearly has a major historical problem. That is in part attributable to the fact that many of the more complex rules on calculating working time are prevalent in the sector—for example, the calculation of travel and sleeping time. On those points, although I am sure that Members will appreciate that I cannot comment on individual cases, I want to restate the Government’s position: when workers are performing work under their contracts, they must be paid the minimum wage.

It is also worth noting that there is no perfect measure of non-compliance within the sector, and there is a possibility that current estimates of non-compliance overestimate work time and underestimate pay, because the information is reported by workers themselves. That is why we are continuing to work with the Low Pay Commission, the Office for National Statistics and others in order to improve our estimates and better understand the scale of the problem.

On the point that was mentioned by the right hon. Member for Oxford East (Mr Smith) and others, the Low Pay Commission’s proposals on transparency merit serious consideration, and we are looking at those and a number of its other recommendations. We are determined to continue to drive forward and send the very clearest signal to companies and employers that we are becoming less tolerant of non-compliance, and we want them to recognise that.

None the less, increasing compliance with the minimum wage in the sector remains a top priority for us and we are taking a number of steps to promote compliance and take stronger action against those who break the law. First, HMRC continues to focus on tackling non-compliance, but that activity is no longer reliant on worker complaints and instead targets employers with the highest risk of non-compliance, based on a range of intelligence and information. HMRC can now analyse information from, for example, other Departments, trade union representatives and the Low Pay Commission, and the evidence indicates that this targeted approach in the care sector is working. From April 2013 to January 2016, HMRC opened 443 cases in the social care sector and closed 308 of those. Of the 308 closed cases, underpayment of the national minimum wage was found in 32% of investigations—for total arrears of £442,000 to 3,000 workers, with penalties issued for a total value of £100,000.

Members have also raised the important issue of affordability within the sector, given the introduction of the national living wage. That pay rise for the lowest paid could be seen to be a threat in terms of increasing non-compliance. That is partly why we are taking steps to signal strongly our commitment to clamp down on it.

With an ageing society, social care funding is a major strategic issue for the country and this Government. We are engaging closely with all the relevant stakeholders on that issue to ensure that councils recognise the need to increase the price that they pay for care in order to cover costs and to reflect rising costs and, not least, the national living wage. That is partly why we are giving local authorities access to an extra £3.5 billion of new support for social care by 2020, to be included in the better care fund. Councils will also be able to introduce a new social care precept, allowing them to increase council tax by 2% above the existing threshold. Taken together, the new precept and the additional better care fund contribution mean local government has access to the extra funding that it will need to increase social care spending in real terms by the end of this Parliament.

[Barbara Keeley]

I thank the Minister for giving way again, but there is a two-year gap. There is nothing from the better care fund this year, only £100 million next year, and—as I said in giving the example from my local authority—the 2% social care precept only covers about half of what is needed. Nationally as well as locally, that is the problem and that is why the Local Government Association asked the Government to bring forward £700 million.

[George Freeman]

I understand. These things are never straightforward or simple. As the right hon. Member for Oxford East pointed out, a lot of creativity is required from councils and the healthcare sector. There is best practice across the country to ensure that health and care are better integrated. [Interruption.] It is all very well for Opposition Members to shake their heads as if this were an easy problem to solve. It is a problem we inherited from the last Government. I am trying to be reasonable in setting out our commitment to deal with it, but it should be remembered that we inherited the problem from the Members who are shaking their heads and suggesting that it is easily solved. I hope that the measures I have set out provide reassurance that we are taking the matter seriously.

Perhaps I may conclude by framing the central elements of the package that we are putting in place. We have toughened up the sanctions and made it easier to name and shame. We have now named 490 employers, raised over £1 million in penalties and recovered over £30 million in unpaid arrears. We are now running at a 94% rate of naming since our revisions to the code in 2013.

Several hon. Members made the point about four-year delays, including my hon. Friend the Member for Dudley South (Mike Wood). I think that that is completely unacceptable. Although we are seeing progress in the speed and rate at which investigations are being pursued, I will talk to the Minister for Skills to make sure the very strongest signal is sent to HMRC saying that we cannot tolerate such delays.

As I have signalled, we are seriously interested in looking at the Low Pay Commission’s recommendation on payslip transparency. It is important that employers are held to account and that employees, particularly when it comes to individual elements of time, can see clearly what time they are being paid for.

I want to highlight the fact that the advice available for employees is free and confidential and that we have introduced important measures to ensure that, when HMRC has information from a third party to carry out an investigation, it keeps the complainant’s identity confidential and that that should trigger a whole workforce investigation.

I also want to highlight the fact that HMRC offers a free service to any employee who believes they are not being reimbursed properly. HMRC also has powers to enforce the reimbursement of expenses. That gives me the chance to highlight the fact that all expenses properly incurred by care workers in the course of doing their duty, often in a sector that requires them to travel extensively across large areas, should be, must be and the Government expect will be, properly reimbursed.

I hope that that helps to set out the Government’s real commitment to tackling the issue. I again thank and congratulate the hon. Member for Sheffield Central on raising it and giving me the opportunity on behalf of the Government to set out how strongly we support cracking down on non-compliance.

Oral Answers to Questions

Debate between George Freeman and Baroness Keeley

Tuesday 9th February 2016 Commons Chamber

[George Freeman]

I would be concerned if that were true. The point is that we are facing extraordinary, exploding demand in our system. At the risk of sounding like a Monty Python sketch, what have the Government done, apart from launching the £3.9 billion better care fund and a £2 billion social care precept; fully funding the NHS five year forward view, with a front load of £3.5 billion; driving health devolution; and providing £4 billion for health technology? We are funding the integration of health and care in a way the last Labour Government never did.

[Barbara Keeley (Worsley and Eccles South) (Lab)]

That is really not true. Ministers are presiding over the hollowing out of social care, because their funding falls far short of what is needed. Some £4.6 billion has already been cut from adult social care, and the funding gap is growing at £700 million a year. The social care precept the Minister has just been talking about will raise £400 million a year, and the better care fund does not start until next year, when it starts at £105 million. Simon Stevens has called this “unresolved business”. When will Ministers face up to the fact that the Government’s figures just do not add up?

[George Freeman]

I think that that question could be taken more seriously, first, if the Labour party had tackled this issue in office and, secondly, if it had any suggestions. Let me summarise the pressure the system is under. Over the next 10 years, there will be a 22% increase in over-65s, and the number of people aged over 75 will rise by 90% in the next 20 years. We face extraordinary challenges. That is why we have announced the better care fund increases, why we have launched the social care precept and why we are driving devolution powers for local areas, which allow local health and care leaders to integrate. If this was as easy as Labour Members say, perhaps they would have done these things during their term in office.

Vulnerable Adults: Transport

Debate between George Freeman and Baroness Keeley

Thursday 21st January 2016 Commons Chamber

[George Freeman]

If the hon. Lady had asked her question in slightly more moderate terms, I might have been able to agree, but when she talks about “savage cuts” completely undermining any progress on integration, I cannot agree with her. That extreme language does not tally with the rather better numbers—I am not pretending that there are not challenges, because there are—but I will come to them in a minute.

[Barbara Keeley]

Will the Minister give way?

[George Freeman]

I will give way briefly, but I want to answer the questions that have already been asked.

[Barbara Keeley]

Like my hon. Friend and constituency neighbour the Member for Salford and Eccles (Rebecca Long Bailey), I want to talk about Salford. It was one of the last authorities in the country that managed to hold on to moderate eligibility for social care, but the cuts that my hon. Friend spoke about mean that we have had to move from moderate to substantial. There is not the funding in the system that the Minister is outlining.

[George Freeman]

I will come on to the numbers for Salford. I rang Salford this morning to get the very latest numbers, and they make quite interesting listening.

Let me just set the scene on the settlement. In the context of the tough public sector finances, we listened to local government and took steps to protect social care services. In the spending review, we reflected that by introducing a 2% social care precept to the council tax for authorities with social care responsibilities. It is ring-fenced: it has to be spent on social care. The precept could mean up to £2 billion of additional funding for social care by 2019-20, which would be enough to support more than 50,000 people in care homes or 200,000 people in their own homes. In addition, we have secured a further £1.5 billion by 2019-20 through extra funding for the better care fund, which brings that funding to a total of £5.3 billion. Those resources are secure, and they are in the hands of local authorities.

Let me turn to transport for disabled people in Salford. Rightly in my view, the provision of social care and the question of how to meet local need are very much matters for the local authority, as I think hon. Members would agree. That is at the heart of this issue. I understand that Salford City Council has decided that the transport needs of people who require support to get to local day care and respite care services can best be met, in the patients’ interests, by closing the in-house passenger transport unit and providing suitable alternatives for individuals.

I also understand from the local authority that a significant number of parents and carers have commented on how much better the arrangements are because they can individualise journey times. Instead of having to wait and then sit on the council bus to get to services, going on very long routes, the vast majority of users are getting a much more personal and bespoke service. It means that the users of the service do not spend significant amounts of time on transport, which used to result in some of them arriving at a day centre or home upset, agitated, delayed and frustrated.

The council has worked hard to resolve the concerns that have been expressed by care users and their families. Having spoken to the council this morning, I understand that all have now accepted the new arrangements. Indeed, the director of adult social services at Salford City Council has told me that he considers the change to be

“a success both in terms of outcomes for individuals and in delivering a saving to the council budget.”

[George Freeman]

I am not sure what the question was. It is interesting that the hon. Lady is saying that the review was the right thing to do and the service has improved, but the rationale for doing it was wrong. I beg to differ. If the rationale that we have to deliver more for less leads good councils, in this case Salford, to find a better way to deliver services that uses less money and provides a better service, that is good. It is exactly what we want councils across the country to do.

For far too long, local government has been hidebound by receiving far too much of its funding from central Government. For me, as a localist, it is anathema that the majority of local government spending comes from central Government. That is why we have begun the process of seriously rebalancing the funding settlement by providing more powers and freedoms locally to raise money that can be spent on locally agreed priorities. The social care precept and the retention of business rates locally are powerful things for which many of us have campaigned for years.

If Salford uses the full social care precept flexibility that we have just provided, it could raise £7.6 million in 2019-20. That will be on top of Salford’s additional income from the better care fund of £10.5 million in 2019-20.

This is not about cuts. It is about a Labour council making prudent decisions that not only improve the way in which services for vulnerable people with disabilities are delivered, but do so in the most cost-effective way. The council’s prudence extends to its decision to nearly double its non-ring-fenced reserves from £29.7 million in 2010 to £56.5 million at the end of 2014-15. I will just say that again: the council doubled its reserves to £56.5 million over the course of the coalition Government.

[Barbara Keeley]

The Minister is being rather complacent in the way that he is responding to this debate. Salford City Council has announced this week that it is having to use its reserves for flood victims, when the Prime Minister will not even apply to the EU solidarity fund for funds. On the point that the Minister makes about social care, the Prime Minister heard this week from the Conservative leader of Essex County Council, who pleaded with him to bring the money forward. The Minister is talking about money for 2019-20. We have to get through the time until then. The money is back-loaded and it is not enough. The situation is risky and uncertain because the money will be provided so late. I should tell him that council leaders are very worried about 2017-18.

[George Freeman]

I will take the question as being, what do I think about that statement? The hon. Lady is right that the funding ramps up, but she is not right in saying that it does not come on stream until 2020. Indeed, I have looked at the figures for Salford. The money that will go to Salford from the better care fund will be £1.1 million in 2017-18, £6.1 million in 2018-19 and £10.5 million in 2019-20. Similarly, the precept will rise over the course of this Parliament, depending on Salford’s decisions on raising it.

Salford’s reserves have gone from being £29.7 million in 2010 to £56.5 million. Those reserves are public money that is there to be used prudently. In this period when we are all having to make sure that our children do not inherit ever more debts, I do not think the fact that Salford City Council is having to dip into its reserves to ensure that it is able to provide services—which, remember, are costing less but delivering better quality—is the savage crisis that the hon. Lady referred to.

Oral Answers to Questions

Debate between George Freeman and Baroness Keeley

Tuesday 5th January 2016 Commons Chamber

[George Freeman]

I am delighted to be able to announce—the hon. Lady might already have heard this—that the Secretary of State has appointed Sir David Dalton from Salford Royal to lead on that. I repeat the offer that the Secretary of State made this morning: we are very close to an agreement, so the right approach is not to strike, but to come to the table and reach it.

[Barbara Keeley (Worsley and Eccles South) (Lab)]

Three hundred thousand fewer older people have publicly funded care packages than in 2010, and nearly half the current record level of hospital delayed discharges are due to waiting for a care package, and that will get worse as winter pressures mount. It is risky that the proposed increases in the better care fund are back-loaded; they do not reach £1.5 billion until 2019-20. The social care precept funding is uncertain because it will raise only £1.6 billion by 2020 if every single council decides to raise the maximum possible. Social care is in crisis now. Can the Minister explain why the Government are proposing risky, uncertain and late funding?

[George Freeman]

This is the most extraordinary welcome for one of the most important announcements in the autumn statement. Having come under pressure to raise more money for social care, the Chancellor and the Secretary of State announced £3.5 billion extra for social care, from the new adult social care precept and the better care fund. The Opposition say that it is not enough and that it will fail, but the data do not support that. If we look at the early data from the better care fund, which was introduced by this Government early last year, we see 85,000 fewer delayed transfers, 12,500 more older people at home within three months of discharge and 3,000 people supported to live independently. We are making real progress.

Specialist Neuromuscular Care and Treatments

Debate between George Freeman and Baroness Keeley

Tuesday 15th December 2015 Westminster Hall

[The Parliamentary Under-Secretary of State for Life Sciences (George Freeman)]

It is a pleasure to serve under your chairmanship, Mr Brady. I am left with 10 minutes in which to try to deliver my speech and the answers that I have carefully prepared while listening to colleagues’ comments. If I run short of time, I will undertake to write to everyone in the Chamber with answers to the points raised.

I start by paying tribute to my right hon. Friend the Member for Chesham and Amersham (Mrs Gillan) for securing the debate. She is a tenacious advocate on this issue, as on others. I join her in paying tribute to Archie and his family. I have met patients who suffer from these diseases and their families, and one’s heart goes out to them. One wants to pay tribute to the bravery with which they deal with their conditions. As is so often the case in the history of medical progress, the families, patients and carers are those who advocate and, in the end, win through to make their point heard, with the help of colleagues from across the House. My right hon. Friend eloquently paid tribute to the families of children with these disorders and diseases who, in many ways, suffer every bit as much as the patients who show such incredible fortitude. She asked me last week whether I would give her an A grade for effort and persistence. I will happily give her an A-plus in this end-of-term summary, but the people to whom we really want to give an A-plus are NICE and NHS England.

I want to touch on some of the excellent points that were raised. My right hon. Friend raised Vimizim and Translarna, so I will say something in detail about the timing of those decisions in a minute. She also made an important point about standards of care across the NHS in clinical trials, which was mentioned by numerous colleagues, and the importance of NICE giving more prominence to the time aspect of these conditions, which are unusual because they can deteriorate with every week’s delay in getting treatment.

The hon. Member for York Central (Rachael Maskell) gave us the benefit of her front-line clinical expertise. In case I run short of time, I shall say now that I will happily convene a meeting at the Department of Health with officials from my Department and NHS England, to which I invite colleagues from all parties who want to discuss the issues she and others raised about front-line care, because a range of practical issues about such care has been raised, in addition to access to drugs, and giving colleagues the chance to raise such points on behalf of their constituents would represent a powerful opportunity. The hon. Lady talked in particular about training and the interface of paediatric and specialist services, which I come across in connection with numerous different specialist conditions.

My hon. Friend the Member for Romsey and Southampton North (Caroline Nokes) spoke passionately about James, Jules and Jagger Curtis, and the importance of expediting those particular decisions and quicker assessment, as well as adoption in general. That is a passion of mine, which was why I launched the accelerated access review to look systemically at what we can do to expedite getting new medicines into the service. She also touched on the importance of wheelchair access.

The hon. Member for South Down (Ms Ritchie) talked eloquently about Michaela and the importance of specialist, multidisciplinary teams. The hon. Member for Strangford (Jim Shannon), who gets the prize for appearing in more debates with me than any other Member of the House, which is a tribute to his activism as the Democratic Unionist party’s spokesman on these issues, highlighted the importance of Belfast as a hub of research and regional strategies in Northern Ireland and spoke about his constituents. This is a devolved matter, and while I pay tribute to the work of researchers and medics in Northern Ireland, it is important that the devolved Administration in Northern Ireland put in place a similarly enlightened commissioning process.

The hon. Member for Bridgend (Mrs Moon) raised the broader issues of Parkinson’s and neurological disorders, while the hon. Member for Dumfries and Galloway (Richard Arkless) spoke passionately about his mother’s suffering. Before I came to Parliament, I worked in Scotland and, as he highlighted, in this area, as in several others, Scotland pioneers some of the clinical commissioning work. The supreme irony of the debate was brought to light by his request that we depoliticise the NHS. For me, one of the greatest steps following the Health and Social Care Act 2012 was the separation of the NHS from the Department of Health. NHS England now operates under its own arm’s length management, subject to a mandate from Ministers

We do not control the NHS—believe me that if, for one afternoon, I could do that, I wish it was now. I would love nothing more than to pull the lever and give all these children the drugs that we all want them to get before Christmas, but that is not in my gift, and I suggest that it is in all our interests that it is not. It is right that such decisions are taken by NHS England and clinical professionals, advised by the very best people at NICE.

[Barbara Keeley]

It is important that the NHS mandate covers these conditions because at the moment it does not. Something must be done to make sure that they are covered.

[George Freeman]

In the few minutes I have available, let me say a few things about the main issues raised. I pay tribute to Muscular Dystrophy UK, Robert Meadowcroft, Emily Crossley, the Duchenne Children’s Trust, Action Duchenne and all the other organisations that work so hard in this area, and specifically on the two or three key drugs.

I remind the House that the decision from NICE on Vimizim is due before the end of the year. Without breaching due process, I have asked that, if that decision is in the pipeline, it can be made as quickly as possible, ideally before we all break up for the Christmas holidays. That is not in my gift, but I made that request. Similarly, I have requested that the Translarna decision, which I believe is due in February, is similarly expedited. However, again, that is not in my gift, and while during the year the Prime Minister and I have urged NICE and NHS England to do everything they can to expedite their decision making on those drugs, we do not have the power—rightly, in my view—to step in and breach process. It is fair to all patients in the NHS that decisions are taken properly.