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22 Jan 2008 : Column 371WH—continued
“If the employer has a duty to provide work, controls when and how it is done, supplies the tools or other equipment needed to do it and pays tax and national insurance contributions on the worker’s behalf, then it is likely that the worker is an employee. If, on the other hand, the worker can decide whether or not to accept work and how to carry it out, makes his or her own arrangements for holidays or sickness absences, pays his or her own tax and national insurance contributions and is free to do the same type of work for more than one employer at the same time, this points towards the person being self-employed.”
“The important question is whether or not the worker is genuinely in business on his or her own account.”
That is the important distinction. The Government say that self-employed people can refuse work and work for more than one employer. How can home workers
do that if they have only one major source of work? We have heard this morning how home workers are afraid to turn work down, because they are worried that if they do so, they will not be offered more work. They are isolated and powerless.
Mr. Hamilton: Does the hon. Lady agree that in addition to that clear description she gave—it was extremely helpful—sometimes, the home worker is expected to provide their own machinery, especially in the sewing industry? I cannot think of a better description of that than the one in Monica Ali’s book “Brick Lane”. The machinery is supplied, serviced and looked after by the home worker. The home work can only be done with the right equipment, but the employer pays nothing towards its costs. Does she agree that that is another abuse of home workers?
Lorely Burt: I totally agree that it is an abuse in such circumstances. There might be another perspective; I want to understand it from the other side. For instance, someone may want to start up in business for themselves, buying their own equipment to produce clothing—perhaps bespoke clothing. It is not simply that the person has to buy their own equipment, it is the relationship between that individual and the employer—the power balance between the two—that is so out of kilter in the examples that the hon. Gentleman cited.
The problems of home workers have been described; they include long hours, a lot of stress, repetitive strain injury, and the fear of complaining about the volume of work and pay rates. The National Group on Homeworking estimates that 48 per cent. of home workers are denied basic employment rates.
Wages are an important subject. The fair estimate agreements for output work were replaced in October 2004 by the four-fifths rule for rated output work. If employers do not pay an hourly rate, they have to pay 120 per cent. of the average work rate times the national minimum wage. For those employers who adhere to the Government’s guidelines, that represents good progress. However, the thread constantly running through this is the fact that unscrupulous employers do not adhere to those guidelines.
The Government have legislated to protect home workers, but should they go further? In our desire to protect one class of worker, we must not threaten another. People such as professional contractors, who work as outside consultants but often from home, have a completely different status, which must also be protected within the law. It is important that we do not throw the baby out with the proverbial bathwater; people who are genuinely self-employed should not be incorporated in the definition of employee, as they would lose their exclusive status and their earning ability.
I am open to suggestions on additional legislation, but I believe that it is not so much the legislation itself that is important as the enforcement of existing law. The chance of a company’s being inspected on its payment of the minimum wage is low; on average it happens only once in over 200 years. Enforcement is paramount here. Will the Minister say whether the Government have plans to strengthen the hand of the enforcement agencies, which can do only what they have the resources for? There is nothing better that the
Government could do than putting resources into these areas of concern and looking at those companies at the low end of the market.
The right hon. Member for Leeds, West spoke about ethical trading through the supply chain. It occurs to me that we could encourage companies, and especially large companies—the company I am thinking of must be large, as it has made more than £1 billion—to include how they pay their workers and how they look after them in their corporate social responsibility reporting. We are developing such a culture in all sorts of areas. I have been talking to the Minister about supply side diversity, and companies can be encouraged to take that step.
John Battle: The hon. Lady has been most generous in giving way. I am sure that my hon. Friend the Member for Leeds, North-East, who is an accountant, could clarify the rules of company accounting, but it would help if companies, including major household names, were not allowed to use corporate accounting methods to be what I would call absentee landlords, not being forced to reveal their suppliers further down the chain. If that was put into company and accounting law, it would make things much more transparent.
Lorely Burt: The right hon. Gentleman makes an interesting suggestion. I shall certainly consider it as a potential way forward. His earlier suggestion of putting together a policy group to consider the loophole in employment law would be extremely helpful, and I would be interested to hear the Minister’s comments on that.
In conclusion, I am interested to know why the Government are not prepared to legislate for this group of exploited workers, and to work out a way in which they can be specifically targeted—not only in employment legislation but, which is even more important, in its enforcement.
Mr. Bill Olner (in the Chair): Before I call Eleanor Laing, I thank the previous speaker for enlightening us all on the tax rules.
10.26 am
Mrs. Eleanor Laing (Epping Forest) (Con): I join in your thanks, Mr. Olner; we shall all check up on that point.
I heartily commend the hon. Member for Leeds, North-East (Mr. Hamilton) for seeking to debate this extremely important aspect of employment law. It is an important subject, as we are dealing not with a few hundred or even a few thousand people but with a substantial number of some of the most vulnerable people. I shall return to that subject in a moment, but that is why I am so pleased to be debating the subject this morning. The debate is long overdue. I also commend the right hon. Member for Leeds, West (John Battle) for his passionate support. Both Members have been dealing with the subject for a long time, and it is through their hard work that people are now paying attention.
It is interesting to note the historical perspective: the subject was first raised in the House of Commons
exactly 100 years ago. It is true that there is much unfinished business. The more we think that we are continuing to improve the way in which our society works—that we are becoming more equal, more fair, more reasonable, and reaching a better work-life balance—the more we uncover the fact that much is yet to be done.
It is somewhat ironic that the Prime Minister should now be in India and that he was previously in China—the more time he spends in India and China, the happier some of us will be. However, I commend him for undertaking the tour because our economy will depend enormously on the emerging economies of China and India in future. Although press commentators and many of those engaged in the political process are quick to recognise the importance of improving employment rights and human rights in China and India, low-paid workers in Britain are doing work in competition with work being outsourced—particularly to India and the subcontinent—and it is those back home in the United Kingdom who still need to be looked after. I do not blame the Prime Minister; I commend him for what he is doing on the international stage, but will the Government please recognise that there is still work to be done here at home?
While we are adopting the historical perspective, it is interesting that the hon. Member for Leeds, North-East said that, once upon a time, the Conservative party was opposed to the national minimum wage. That, too, is history. We are not opposed to the national minimum wage. Personally, I think that it is an extremely important rung of the ladder towards achieving equality and fairness in the labour market.
John Battle: We have waited 10 years to hear that.
Mrs. Laing: I think that some of my colleagues have also said what I said about the minimum wage. I certainly believe it.
I met the National Group on Homeworking some time ago, when they brought a large delegation of people to the House of Commons. In all truth, not only was I interested in the issues that arose from that meeting but I was genuinely shocked to discover the employment conditions under which large numbers of people work in Britain today. They are not the type of bad employment conditions that existed 100 years ago, or indeed those found in India and China at present—I am not being insulting to those countries, but we must recognise the reality and truth of the situation there. However, although the current employment conditions of large numbers of home workers are not as bad as low-paid workers once had to endure, they are still bad enough to require our attention and the Government’s attention as soon as possible.
The hon. Member for Leeds, North-East highlighted the heart-rending stories of some people who were brave enough to put their heads above the parapet and allow their circumstances to be used as important examples. It is quite unacceptable that a tribunal decision should take more than eight months to come out. That is simply unfair and I hope that somebody somewhere will take note of that fact this morning and deal with it.
In general, however, we must recognise that people do not usually work from home, or want to work part-time or need flexibility in their working environment
because they choose to; nor is it because, as some employers and some other people would have us believe, they are housewives earning a bit of pin money. That view is an insult—an absolute insult. The reason why people work from home, or need flexibility in employment or to work part-time, is that they have other family duties, whether it be looking after children or looking after elderly or sick relatives.
Furthermore, we as a society not only recognise that that situation exists; we encourage it. We need people to do two jobs, especially women—let us not forget that more than 80 per cent. of home workers are women—but also men in some circumstances. We need them to bring up families and look after the elderly and sick but we also need them to be economically active, because we need their input in the economy. Our economy would not work without people doing those part-time jobs. Such work is not a luxury or an add-on, nor is it about pin money; it is absolutely essential. Given that we expect people, especially women, to organise their lives so that they can work, be economically active and pay taxes, and look after their children and elderly relatives at the same time, we ought to recognise their work and give them the respect they deserve for doing lots of different jobs at once.
Bringing up children is not an add-on luxury; it is an absolute necessity. Looking after the elderly is not an add-on luxury; it is the most difficult job there is. Where people are also trying to earn money at the same time, they ought to be given respect and support.
Flexibility is absolutely vital. I see from Hansard that I had an interesting exchange with the then Minister for Women, now the Secretary of State for Transport in the House of Commons on 8 June 2006, when I was shadow Minister for Women. We agreed with one another about the importance of encouraging flexibility. I was arguing that the right to request flexibility should be extended, a point to which the hon. Member for Solihull (Lorely Burt) alluded a few moments ago in her excellent speech. At present, the right to request flexible working is extended only to some people in the working population; like the hon. Member for Solihull, I argue that it should be extended far more widely.
I say that because children do not stop being an enormous responsibility when they reach the age of six or seven; actually, they become more difficult then. Sometimes, people do not understand that. A baby can be put in a corner to sleep, but that is not possible with an eight-year-old child. Children of eight, nine or 10 and especially teenagers need their parents even more than small children do.
John Battle: I absolutely agree with the hon. Lady about the importance of flexibility in the household, in domestic circumstances and support work; we must move in that direction. However, ambivalence exists because employers interpret the word “flexibility” very differently and can see it as a means of avoiding health and safety regulations and employment law. Until they start to understand flexibility more positively and not as a negative way of just squeezing out more profit, we will have a problem with the concept.
Mrs. Laing:
The right hon. Gentleman is absolutely correct. I do not have time to go into that aspect in great detail right now, but I am sure that the Minister
will be well aware that when one studies the effects of flexible working one finds that many of the best, most profitable and most employee-friendly companies in Britain have introduced flexible working or have experimented with it, and the vast majority of them have evidence that not only has flexibility improved the morale of their work force but, as a result, their profitability and the general well-being of the company, in economic as well as social terms, has improved, too.
Not so long ago, when people made an excuse to be away from the workplace it would be anything but, “I have had to go and pick up my child from school.” I have done it myself. I have not dared to say that I could not be at such and such a meeting because I had to go to school; I did not dare to say that because I thought that I would be looked down on. However, in the last few years, since we have brought the subject right to the front of the political agenda, I am no longer afraid to give that reason.
The important issue is that many men in the political world have come to respect the position of women who are looking after children. I honestly pay tribute to the men who dared to stand up for the employment rights of women who have to look after children. I do not know whether that means that there are lots of “new men” in the House of Commons. I do not really care what they are called; all I care about is that we are addressing the issue.
My son, who is aged six, saw me on television asking a question about the issue at one point; he had seen me say something about it. The following day, I explained to him that I could not be there at bedtime because I had to vote at 7 pm. He said, “Well, Mummy, I want David Cameron to become Prime Minister, because he said that mummies should spend more time with their boys.” I was very proud of my little son for having the political message so neatly wrapped up.
It is true that the Leader of the Opposition gave that message, but the real point to be made right now is that when we address the general issue of the gender pay gap the end of the market that we should concentrate on is not where we see glamorous, City executives earning hundreds of thousands of pounds per year; it is the other end of the market, where the gender pay gap between part-time workers is more than 40 per cent. It is the fact that most part-time workers and home workers are women that causes that enormous gender pay gap.
When we talk about the importance of bringing equality to the labour market, we must not ignore the position of home workers, because the gender pay gap would probably become much smaller if they were taken out of the statistics. I am not saying that they should be, but that somebody somewhere should examine what the gender pay gap would be if home workers were not in the picture. I do not have the resources to do so, but somebody somewhere has, and that would let us see how difficult the position of home workers is.
I shall conclude without saying all the other things that I could say about this important and wide subject because I want to give the Minister plenty of time to reply to the debate. Given that the Government have taken great steps forward on the minimum wage, equality and flexible working, I am genuinely surprised by their attitude to home workers. Of course, I recognise the difficulties in current employment law, which affect employers, employees and home workers alike, but I am
genuinely surprised that the Government have not tackled the issue, so along with everyone else who has spoken, I want to hear what the Minister has to say.
10.41 am
The Minister for Employment Relations and Postal Affairs (Mr. Pat McFadden): I begin by paying tribute to my hon. Friend the Member for Leeds, North-East (Mr. Hamilton) for introducing the debate. He spoke with great expertise and passion, particularly about the individual examples that he raised, some of which are summarised in the NGH report “Subject to Status”, to which he referred. He raised several issues relating to piece rates, the minimum wage and employment status, and I shall deal with those in more detail later.
I also pay tribute to my right hon. Friend the Member for Leeds, West (John Battle). I hope I will not embarrass him when I say that I have regarded him as something of an inspiration for many years because of the depth of his passion on issues relating to poverty, because of his belief in empowering people and because of the international reach of his thinking on these important issues, as we have seen today. The hon. Member for Solihull (Lorely Burt) raised important points, including questions about flexibility and enforcement, and I shall come to those later.
In a sense, the hon. Member for Epping Forest (Mrs. Laing) began where my hon. Friend the Member for Leeds, North-East began—100 years ago, which is when the report with which my hon. Friend began his speech was published. In a sense, 100 years ago is a good place to start because we are currently experiencing a great wave of globalisation. However, it is not the first, and there was another great wave of globalisation in the years before the first world war; indeed, the 1908 report would have been written in the middle of that phenomenon. The hon. Member for Epping Forest is therefore right to draw attention to the Prime Minister’s visits to India and China and the powerful international economic changes that we have seen. I appreciate that you will not want me to veer too far from the subject, Mr. Olner, but history shows that the first wave of globalisation did not continue and was brought to an end by world war and then cold war. It is only since the end of the cold war that we have experienced a second great wave of globalisation.
My right hon. Friend the Member for Leeds, West raised some important questions about employment rights in an era of globalisation, which is a difficult issue, particularly for those of us in the richer west. It is sometimes argued that globalisation exploits people in newly developing countries and that we would not tolerate their working conditions and wages. Looked at from our end of the telescope, that might be true, but it might also be true that such conditions and wages are better than those offered by local employers. Indeed, if we look at the impact of globalisation, particularly in the two countries mentioned by the hon. Member for Epping Forest, we see that the number of people living on less than $1 a day has declined rapidly in recent years.
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