Living Wage

Steve Reed Excerpts

Wednesday 9th January 2013 Westminster Hall

[Steve Reed (Croydon North) (Lab)]

I thank my hon. Friend the Member for Erith and Thamesmead (Teresa Pearce) for introducing the debate. It is important, not least because life is becoming increasingly stressful for many low-paid workers.

The Equality and Human Rights Commission’s 2011 review of home care for older people highlighted cases of physical abuse, theft, neglect and disregard for privacy and dignity. Last April, the Low Pay Commission reported that 10% of home care workers are paid below the minimum wage, let alone the living wage, with some workers paid per visit rather than per hour, with no reimbursement of travel costs.

There is a link between the findings of those two high-profile studies. Too many home care workers, encouraged to complete each visit as quickly as possible and therefore with their pay as low as possible, are unable to form relationships with the older people they care for and feel pressured to complete the visit too quickly. That dehumanises the service being provided and makes instances of neglect more likely. The worker has little or no job satisfaction, little incentive to do a better job, little spare cash at the end of a tough working week and increasing levels of stress. Unsurprisingly, levels of sickness absence are high and so is employee turnover. When the stress gets too much and illness follows, some workers move on to long-term sickness benefit. It is not only care workers; similar examples exist in almost any low-paid, high-stress employment. We are, in effect, pathologising poverty.

There is another way. Organisations such as Care and Share Associates and Sunderland Home Care Associates have found that they can cut both sick leave and staff turnover by giving their staff better terms and conditions, including liveable incomes. The quality of care provided improves; sickness, including long-term sickness and incapacity, reduces, and the cost to the rest of society is lowered, while the individual worker’s quality of life improves. Many Labour councils in London, including Lewisham, Hackney and Lambeth, have recognised the value of paying the London living wage and have been accredited as living wage employers. Despite support from the Conservative Mayor of London, it is disappointing that no Conservative-controlled councils in London have yet been accredited. I support the campaign by London Citizens, which is part of Citizens UK, alongside The East London Communities Organisation, to persuade Croydon council, which covers my constituency, to sign up to the living wage, both for its own directly employed staff and for staff employed by contractors and sub-contractors.

Employers who implement the living wage have reported improved recruitment and retention of staff, higher work morale and increased productivity. Those all represent increased value for money for the services provided, which is important in these straitened times. Lambeth council found—I was leading it at the time—that when it tendered its facilities management contract on a living wage basis, the market responded positively and came up with innovative ways to meet the requirement within the funds available and without loss of jobs. Many public services are procured through consortia, and we can encourage the market to innovate in ways that allow workers the decency of a living wage by harnessing the purchasing power of those groupings. It is important that the Government recognise their role in encouraging that to happen, because leaving it to the market alone will not result in all those benefits.

There is immense value in ensuring that work pays. People in work should never be forced to live in poverty. That is not just a moral argument; it is about value for money and improving the quality of public services. There are costs to society as a whole, including financial ones, as well as to the individual workers affected, if we force hard-working people into poverty and illness by paying them less than is necessary to meet the basic needs of their lives.