National Minimum Wage Naming Scheme

Debate between Stephanie Peacock and Kelly Tolhurst

Tuesday 4th June 2019 Commons Chamber

[Stephanie Peacock (Barnsley East) (Lab)]

(Urgent Question): To ask the Secretary of State for Business, Energy and Industrial Strategy to make a statement on the suspension of the national minimum wage naming scheme.

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Kelly Tolhurst)]

Enforcement of the national minimum wage and the national living wage is a priority for the Government, and we take tough action against the minority of employers who underpay. Last year, employers were ordered to repay over 220,000 UK workers a record £24.4 million of arrears. We have more than doubled the budget for minimum wage compliance and enforcement since 2015, and it is now at a record high of £27.4 million.

As part of our enforcement approach, we name employers who have breached the legislation, which raises awareness of national minimum wage enforcement and deters others who may be tempted to break the law. To date, the Government have named almost 2,000 employers who have underpaid the national minimum wage. The Government are reviewing the naming scheme to ensure that it continues effectively to support minimum wage compliance. This is in response to a recommendation made by the director of labour market enforcement, Professor Sir David Metcalf, last year.

In December 2018 we accepted both of the director’s recommendations relating to the naming scheme, specifically to review the scheme’s effectiveness and to consider how to provide further information under the scheme in future. The Government have sought to learn from other naming schemes and other regulatory approaches. We have also discussed the evidence with the director of labour market enforcement and have conducted further analysis to understand the impact that any changes to the scheme would have on the number of employers named.

Naming and shaming remains an important part of our enforcement toolkit, and the review will be concluded in the coming weeks. Any changes to the scheme will be communicated through the national minimum wage enforcement policy documents.

[Stephanie Peacock]

Thank you, Mr Speaker, for granting this urgent question, which finally forces a Minister to admit to the House that the Government have quietly dropped one of the few policies they had to protect vulnerable workers. The naming scheme had exposed nearly 2,000 employers who illegally underpaid nearly 100,000 workers by millions of pounds, including household names from TGI Fridays to Marriott hotels, but the last such list was almost a year ago.

As we now know, the Government have privately decided to suspend the scheme, despite the Department’s official guidelines maintaining that the scheme still operates. The Minister claims this was based on a recommendation of the director of labour market enforcement, made over a year ago, yet the director made no such recommendation to suspend the scheme; he simply called for an evaluation and specific improvements. The Government accepted those recommendations, so why have they not simply implemented them and continued with the scheme in the meantime? Can the Minister confirm that as this review has “no set completion date”, this policy has been effectively halted? Can she tell us what progress the review has made in the last year? What evidence has it taken, what research has been commissioned, what work has her Department done, and what proposals will come to the House and when? Or is the so-called review in reality just an excuse to let bad employers off the hook?

This is the latest in a long list of policies that would help working people, from fair tips to equality for agency workers, that have been delayed or dropped by the Government. Time and again, they crack down on the vulnerable and back down before the powerful. When will this capitulation to rogue employers over working people finally end?

[Kelly Tolhurst]

I have to say that the hon. Lady is incorrect: the scheme has not been dropped. Given the impact that being named can have on a business, it is right that we properly consider the effectiveness of the naming scheme. We want to make sure that our enforcement approach balances the need to crack down on the most terrible employers, who purposely and persistently break the law, with the need to be fair to and educate employers who try to do the right thing.

We are in no way going soft on employers. Last year, we issued record financial penalties to more than 1,000 non-compliant employers to the value of £17 million. That was part of our commitment to support workers’ rights. Our good work plan sets out a vision for the future of the UK labour market and includes an ambitious programme of work to implement 51 of the 53 recommendations Matthew Taylor made in his review of modern working practice.

I must point out, however, that it was this Government who gave the lowest paid workers the biggest increase in the national living wage in 20 years.

Oral Answers to Questions

Debate between Stephanie Peacock and Kelly Tolhurst

Tuesday 30th April 2019 Commons Chamber

[Stephanie Peacock (Barnsley East) (Lab)]

My constituent was made redundant from Carillion last April after 11 years’ service as a cleaner. She has been passed from pillar to post, from PwC to the insolvency services. Will the Minister please look into this case as a matter of urgency?

[Kelly Tolhurst]

I would welcome it if the hon. Lady passed me the details of her constituent, so that I can follow up that matter.

Oral Answers to Questions

Debate between Stephanie Peacock and Kelly Tolhurst

Tuesday 12th February 2019 Commons Chamber

[Kelly Tolhurst]

My hon. Friend raises a really important question. There have been several criticisms of the FRC, which is why the Secretary of State commissioned Sir John Kingman to lead a review of the regulator. We are taking forward Sir John’s recommendations to create a stronger regulator with stronger powers. I assure my hon. Friend that I will continue to meet him on the particular issue he raises, so that we can find a resolution.

[Stephanie Peacock (Barnsley East) (Lab)]

Does the Minister agree that we should support workers who keep small businesses like cafes and pubs going? In his so-called “Good Work Plan”, the Business Secretary boasted that the Government will ensure that all tips go to workers in full. Where exactly is the Bill that was first promised three years ago?

[Kelly Tolhurst]

The hon. Lady is quite right. In October last year, we announced that we will bring forward legislation regarding tipping in the next Session. We are committed to doing that. It is this Government who have brought it forward.

Property Management Company Fees

Debate between Stephanie Peacock and Kelly Tolhurst

Tuesday 7th November 2017 Westminster Hall

[Kelly Tolhurst (Rochester and Strood) (Con)]

I beg to move,

That this House has considered property management company fees.

It is a pleasure to serve under your chairmanship, Mr Evans. I am delighted to have the opportunity to lead this debate on an issue that has affected a number of my constituents in Rochester and Strood and that has no doubt affected thousands more across the country. Over recent years, we have seen a model being used by developers where development sites are managed by management companies after the delivery of freehold and leasehold properties. A rising proportion of residents of such properties are left having to deal with property management companies when they have issues.

Some property managing agents do take the work out of owning a flat and offer great value for money for residents. Everyone acknowledges that property management fees are a standard part of owning a flat, but when people buy a freehold house on a large development, those fees are not something that always comes to mind. Management companies will typically cover repairs to the communal areas of a development, including to the windows, drainage and the roof. Often they will also cover recreational spaces within grounds, such as children’s play areas or gyms. In some cases, the fees are also used to pay for other shared services, such as gardeners, landscapers, concierge services or cleaners. Understandably, service fees can differ between developments. Fees can be a flat rate for all premises, or they can be determined by the number of bedrooms or a property’s floor space. However, some agencies can charge high fees and evidently do not necessarily offer a service worthy of the amount, even by modern standards.

Research last year found that the typical annual fee for new build homes is £2,777, while for older properties it is £1,863. For many families and individuals that is a significant added living cost, and it is understandable that residents become concerned and irritated when there is no value for money. I therefore want to use this ideal setting to highlight the impact that unjustified property management service charges have on local homeowners. A number of constituents have got in touch regarding exorbitant charges from local housing associations and property management companies for services that are simply not carried out.

In my constituency, many residents of the Chimes and the Pastures estates in Hoo are having ongoing disputes with their new property management company, SDL Bigwood. When householders on the estates bought their properties, they were informed that only when the whole of the estate was handed over from Taylor Wimpey and Bellway would they incur property management charges. Until then, Taylor Wimpey and Bellway would pay them. Unfortunately, the companies failed to communicate with residents as to when any handover would be made. In fact, residents were left completely in the dark over the reality, which was that the handover of the whole estate would no longer happen. Instead, only a few parts would be handed over. It then became apparent that SDL Bigwood tried to bring forward debts from its former business for services that residents did not see being implemented.

Currently, there is no onus on the property management company to provide any evidence of the services they are charging for being carried out. They merely need to provide end-of-year accounts long after the end of the year. Some residents face paying thousands of pounds for a backlog of fees passed on from one of the former companies, with payment demanded by the end of the year. That is all despite the estate being in surplus. However, as the huge sums are still needed in advance, and as all this is legally tied up in title deeds and TP1 property transfer papers, residents find themselves having to pay with no right of challenge. It is wrong that so many people who only want to provide a roof over their families’ heads find themselves trapped and helpless and see their money wasted.

[Stephanie Peacock (Barnsley East) (Lab)]

I thank the hon. Lady for securing this debate. I recently had a case raised with me where a couple purchased a leasehold flat from a developer. Once they had completed on the purchase, they were informed that the advertised service charge was going to be doubled. They were given no explanation, and when they asked questions, the company could not explain why it was doubling its fees. Does she agree that we need to clamp down on that kind of practice? We need to tackle rogue landlords who prey on people, including a number of my constituents in Barnsley East.

[Kelly Tolhurst]

I agree with the hon. Lady. I will come to some more examples from my constituency where charges are not transparent, but this debate is about leaseholders and freeholders in particular, as opposed to people who are renting their properties. That is what I am talking about today.

To give another example, one of my constituents reported that in the past financial year, their estimated service charge increased from £85 a month to £128 a month. If that was not already bad enough, the housing association, Hyde Housing, failed to get its figures ready for the April payment. As a result, the charge the individual paid in May increased by more than 100%.

The breakdown of Hyde’s figures makes for astounding reading. For example, there is a charge for “Fire safety, including servicing and inspections” of £34 a month. The building in question consists of a block of 24 flats. If all properties are charged similar amounts, the charge brings in more than £800 a month. However, the actual inspection takes just 15 minutes, in addition to the time taken for paperwork, and only occurs annually. I understand there are fire extinguishers and a sprinkler system to maintain over the years, but £800 a month seems excessive to many of the families and individuals. In addition, there are charges of around £90 a month for grounds maintenance. I am familiar with the plots around the block, and it is clear that any maintenance is minimal, and certainly worth nowhere near a value of £90 a flat a month. My constituent’s block is also paying nearly £250 a month collectively for unspecified provisions that many residents do not understand, and those provisions are not disclosed by the association.