National Minimum Wage: Care Sector

Debate between Paul Blomfield and Melanie Onn

Wednesday 23rd March 2016 Westminster Hall

[Paul Blomfield]

My hon. Friend is absolutely right. Indeed, arising from our last debate, six investigations were commissioned. I asked a parliamentary question about those investigations. They were launched in February 2015 and have yet to report. That is clearly a disgrace.

I was talking about the human stories in my constituency. I know of two local women who work for a care company that uses GPS technology to monitor when they arrive for and leave appointments. They told me their stories. The company monitors the time that they spend travelling; to be accurate, it monitors the distances that they are travelling, but it does not pay them for that time. Incidentally, the company also rips them off on the cost of travelling; it pays them 12p a mile for using their own cars, when Her Majesty’s Revenue and Customs assumes for its calculations that 45p a mile is a reasonable benchmark.

One of the women, Sharon, told me that it was not unusual for her to be out of the house at 6.15 in the morning and not return until 11 o’clock at night. She gets a break, but she is only paid for seven hours’ work, which is the time she is actually at appointments. Never mind how long it has taken her to get to an appointment or to travel between appointments. Consequently, a so-called “hourly” rate of £7.52 means that, according to Melanie, who works alongside Sharon:

“A 15-minute visit is worth £1.88”.

These women have even been refused payment for the time they have spent waiting for ambulances to arrive for people in their care. Why do they put up with that abuse? As Sharon told me:

“You get in a bit of a trap, because I actually do love the work.”

We should be ashamed that tens of thousands of people like Melanie and Sharon across the country, who look after our most vulnerable, are treated in that way simply because they care.

It also makes a mockery of our national minimum wage legislation. Let us be clear that it is a criminal offence knowingly not to pay the national minimum wage. However, the situation has not improved since we last debated this issue. In fact, there are signs—

[Melanie Onn (Great Grimsby) (Lab)]

Does my hon. Friend agree that it is a disgrace that only 36 English councils out of 152 that are responsible for social care stipulate in their contracts that home care providers must pay for workers’ travel time?

[Paul Blomfield]

I do indeed and I pay tribute to those councils that are now changing their rules, so that when they commission they require workers’ travel time to be paid. Hopefully, more councils will follow their example.

I am disappointed that the Government seem to be taking this issue even less seriously than when we last debated it. Last summer, HMRC launched a new national minimum wage campaign that allows employers who have not been paying it to escape punishment. That is shocking. But it is simple: offending employers can declare details of arrears owed to their employees. They then “self-correct” and, with a cursory follow-up by HMRC, that is it—no more HMRC sniffing around and examining their practices. I do not know of many crimes where the offender escapes punishment entirely if they come forward. As I say, it makes a mockery of the increases in penalties for non-payment of the national minimum wage that were introduced under the coalition Government.

According to the Low Pay Commission, between 2011 and 2015, £1.75 million was recovered in arrears for 8,698 workers, which amounts to an average of £201 per worker. The shameful thing, however, is that that is just a drop in the ocean. The Resolution Foundation, which the Minister will know is chaired by one of his former colleagues, a former Conservative Minister, estimates that 160,000 care workers are collectively cheated of £130 million each year. The Resolution Foundation estimates that the average amount of arrears owed to care workers is more than £815, which is four times the rate at which HMRC is recovering the money.

The real scandal is that it does not have to be like this. The Government have the power to act, but they appear to lack the will to do so. Therefore, let me set out some proposals and I look forward to hearing the Minister’s comments on them.

For a start, the Government are far too reliant on self-reporting. The use of zero-hours contracts is rife in this sector; for example, both Sharon and Melanie, to whom I referred earlier, are on such a contract. So who is going to rock the boat when there is so little job security? Following up on every call made to the helpline is all well and good, but what are the Government doing to help those vulnerable care workers who do not dare to make such a call?