National Minimum Wage: Care Sector

Yvonne Fovargue Excerpts

Wednesday 23rd March 2016 Westminster Hall

[Yvonne Fovargue (Makerfield) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Rosindell. I too congratulate my hon. Friend the Member for Sheffield Central (Paul Blomfield) on securing this debate. I am pleased that so many of my colleagues have come to put forward cases; it is just a pity that there were so few on the Government Benches to listen to the human stories put forward by the hon. Member for Dudley South (Mike Wood).

I would like to start by paying tribute to care workers. They allowed my mum to live in her home at the end of her life, and that gave me the confidence to work here and her the confidence to stay at home. I have to say that in many instances they have the patience of saints. We rely on these people to look after our loved ones, and yet, as we have heard, so many are routinely and illegally still paid less than the minimum wage. I too would like to thank Unison for its briefing and its long campaign to support workers through all means, including legal action.

As the hon. Member for Motherwell and Wishaw (Marion Fellows) said, we all have an interest in this debate, either sooner or later. We heard from my hon. Friend the Member for Heywood and Middleton (Liz McInnes) that investigations by HMRC of care providers found that 41% were guilty of non-compliance between 2011 and 2015. The Resolution Foundation calculated that care workers are collectively cheated out of £130 million per year due to below-minimum-wage payments. The effect on care workers and those they care for is immeasurable. It plunges care workers into poverty, as was highlighted by my hon. Friend the Member for Neath (Christina Rees). It leads to high staff turnover and therefore a lack of continuity of care, which is so valued by the person being cared for. The care worker is not just a paid employee or a carer; they become a friend.

So how do providers get away with that? It is by not paying for travel time, which encourages call-clipping—leaving a few minutes early to minimise time spent working for free. However, as we heard from my hon. Friend the Member for Greenwich and Woolwich (Matthew Pennycook), many care workers do not do that because they care about the people they are working for. Effectively, they are subsidising our care system.

We heard about how the combination of cuts to council funding and the rise in the minimum wage will increase the problem. The funding is simply insufficient for social care, both now and in the future, as was so eloquently put by my hon. Friends the Members for Worsley and Eccles South (Barbara Keeley) and for Edmonton (Kate Osamor), who have long campaigned on the issue, and I pay tribute to my hon. Friend the Member for Sheffield Central and my right hon. Friend the Member for Oxford East (Mr Smith) for their work on it.

Pressure from my colleagues led to the Government ordering HMRC to carry out an investigation into the six largest care providers. Care providers are businesses, as we heard from my hon. Friend the Member for Great Grimsby (Melanie Onn), who spoke passionately about the large corporations and some of their actions, which are less than compassionate. Despite the Government ordering HMRC to carry out that investigation in February 2015, it has still not been completed. Why is that? When will it be complete?

Just a handful of small care providers—13—have been named and shamed since BIS commenced this policy in 2014. Of those 13 providers, eight were identified as owing arrears to just one care worker. How can that be if care workers are working under the same terms and conditions? Is HMRC extending its investigation to other care workers within the companies? If not, why not? We have heard that that is partly due to the process; HMRC recovers arrears only for the worker who contacted it, and employers are allowed to self-correct and pay back the other workers with minimal oversight. Effectively, they are shamed as bad employers that are not to be trusted, but are then trusted to do the right thing by the employees who they cheated in the first place.

The assurance process on this is minimal. It relies on workers knowing how much they are owed, but, as my hon. Friend the Member for Bradford South (Judith Cummins) rightly highlighted, many care workers are not currently provided with a proper breakdown of all their working time. HMRC also consistently identified a very low level of arrears, with an average of £201 per worker. Should HMRC not be made to carry out assurance checks, publish the results and talk to a wider range of people about this, including the trade unions?

Some may ask why people do not report these abuses. As we have heard, there are low levels of awareness among workers that they should be paid for travel time, as well as a fear of losing jobs, of cuts in hours and of tribunal fees, as my hon. Friend the Member for Ashton-under-Lyne (Angela Rayner) highlighted.

[Mr Andrew Smith]

My hon. Friend is making an excellent speech. As was pointed out earlier in the debate, a high proportion of these workers are migrant workers. With the awful rhetoric directed at them from some sections of our society and political parties, do not those workers feel additionally vulnerable and scared about reporting such things?

[Yvonne Fovargue]

I agree with my right hon. Friend. Many workers in this sector are already exploited, as we heard from my hon. Friend the Member for Great Grimsby. They are women. They are migrant workers. They are people who do not traditionally complain. Another issue is the length of time before the judgment in tribunal cases. In 2014-15, it was on average 74 weeks before a judgment was reached.

Does the Minister feel that a voluntary statement of a national minimum wage is sufficient? In view of the widespread non-compliance, should the national minimum wage not be compulsory in this sector? As we have heard, many care workers do not know the hours they are paid for. Does he agree that we must go beyond the Low Pay Commission’s suggestion of simply having a review, and that there should be a requirement for payslips of hourly paid staff to clearly state the hours for which they are paid?

Details on the number of care workers who contact the pay and work rights helpline should be collected, as they were previously. That is vital, because it gives a sense of the levels of awareness about non-payment and the willingness to complain.

Councils’ commissioning processes should be monitored as to whether they are insisting that providers pay the minimum wage. Councils also need support to carry out spot inspections of providers’ payroll records, which should be clear, and they should carry out regular, anonymous staff surveys, in conjunction with trade unions, to identify any risks of non-payment.

We rely on care workers to look after the most vulnerable, and yet we are allowing them to be exploited and underpaid. They work in one of the most demanding sectors, caring for our loved ones, and they deserve to be looked after by all available means without further delay.