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Jon Cruddas (Dagenham) (Lab): I know it is customary as part of the protocol on these occasions to congratulate my hon. Friend the Member for Elmet (Colin Burgon)
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on securing the debate, but I also wish to do so because of the content of his contribution. He touched on some profoundly difficult territory in terms of race, class and demographic change in this country, but he navigated through those issues creatively and touched on some public policy remedies that need to be part of the mix—not least, because of the point he made at the end of his speech.

As we enter more difficult economic waters, there is a possibility that the scramble over scarce resources and the race to the bottom that is arguably occurring in certain sectors of the labour market will become more intense and racialised. That raises real issues for the future in terms of what is euphemistically called community cohesion. My hon. Friend touched on that creatively. In the community that I represent, these are not abstract matters, and the issues of migration, low pay and insecure work need to be centre stage in terms of our public policy debates—not least because, as my hon. Friend mentioned, certain forms of compound abuse are involved. Often that relates to systemic failures in the Home Office, but forms of landlordism that I thought had been abolished 20 years ago, and forms of exploitation at work also compound the insecurities of some of the most vulnerable people in our communities.

I congratulate my hon. Friend on securing the debate because we often ignore such issues. We convince ourselves that we have presided over an economic miracle during the past 10 years, but the problems will not go away when we hit choppier times during the next few months and years.

I, too, listened to the programme on the radio this morning about the report from the Gangmasters Licensing Authority that painted a much worse picture of exploitation than it had imagined a few years ago. Last year, the authority revoked the licences of some 20 gangmasters for abuse and it expects to revoke about 60 by the end of this year. There has been a series of dreadful abuses in terms of transport and accommodation deductions, which make people’s relative poverty even more intense than in terms of their nominal hourly wage cost. The TUC commission on vulnerable employment estimated that 2 million people are in such employment across the economy. It defined vulnerable employment as

We cannot have this debate without a broader discussion about poverty in the UK today. Let us consider the broader context in terms of in-work poverty. I refer hon. Members to the recent Institute for Public Policy Research report entitled “Working out of poverty: A study of the low-paid and the ‘working poor’”, and the figures that it has provided for us. More than 5 million people—more than one in five of those in work, or 23 per cent. of all employees—are paid less than £6.67 an hour. That is in the formal economy. Some 1.4 million poor children—the same number as in 1997—live in working households. Although since 1997 the number of poor children in workless households has fallen from 2 million to 1.4 million, the level of working poverty has been maintained and, as a proportion of total poverty, has increased over the last decade.

Arguably, therefore, we have seen a Government anti-poverty strategy that has been an in-work strategy. We need to develop a more systematic working poverty
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strategy that confronts issues relating to people’s day-to-day employment. Half of all poor kids are in working households, up from 40 per cent. 10 years ago; and 57 per cent. of poor households are working households, up from 47 per cent. 10 years ago. The issue of working poverty, which relates to some of the points raised by my hon. Friend the Member for Elmet, will not go away. Indeed, as a proportion of total poverty, it is rising, which means that different remedies are needed from those based simply on getting people into work. The poverty that people face in work now needs to be addressed.

The report by the House of Lords Economic Affairs Committee, “The Economic Impact of Immigration” refers to the role of immigration in the creation and expansion of a broader low-paid economy. I refer, too, to some of the evidence that my hon. Friend recited, as sent to me by the Fair Pay Network. There were three pieces of evidence that he used to describe a contemporary, modern-day incomes policy. The use and abuse of migrant workers in that respect is demonstrated by some of the specific empirical evidence that he documented.

The first piece of evidence is from Professor Dustmann: every 1 per cent. increase in the ratio of immigrants to natives in the working age population led to a 0.5 per cent. decrease in wages for the lowest 10 per cent. of wage earners. Secondly, my hon. Friend used evidence from the City of London corporation that reinforced the argument that significant downward pressure on wages at the bottom end of the labour market is occurring through the abuse of migrant workers. Thirdly, there was evidence from Steve Nickell that negative wage effects are concentrated in sectors, including social care and cleaning, where low-paid hourly work is most concentrated.

A series of different empirical studies reinforce the idea that migrant workers are used in certain segmented labour markets to reinforce patterns of low-wage, low-skill employment, and that the bulk of recent migration to the UK is gravitating towards jobs that are low paid—around the level of the minimum wage. Professor Dustmann concludes that immigrants appear to be most concentrated at precisely the same points where we find the most negative wage effects.

All of that reinforces the evidence in academic economic texts over some years of the intensification of what is called an hourglass economy—growth at the top end of the labour market, but a broadly expanding low-wage, low-skill labour market. It is often linked to patterns of public service contract structures and is interlinked with patterns of net migration and abuse by employers.

For me, as I said, this is not an abstract debate. Our borough has the lowest-cost housing market in Greater London and is the lowest-cost wage economy in terms of the wage rates of the resident population, so we have seen the effects at first hand. Our community is the fastest changing, not least because of right to buy, which has created a private housing market that we have never had before. Over the past few years, there has been an intensified scramble for limited resources—most noticeably housing, but also public services more broadly.

In the workplace, we have seen a race to the bottom, with tensions over access to, and the quality of, paid employment. That takes us back to the empirical evidence that employees are being paid below the national minimum wage, as was mentioned earlier. The best example of
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that, which we pointed out to the Low Pay Commission when it was gathering evidence for its recent report, involved Lithuanian employees on a public contract in London at the back end of 2007 who were paid about £2.50 an hour, or barely half the minimum wage. They were eating cold beans from a tin for their lunch while they were on the job. That is not a unique experience; such stories ricochet around the community, so everyone knows them, which creates a heightened sense of vulnerability across broader labour markets.

There is thus the challenge of massive demographic change, intensified insecurity in the workplace and a scramble for limited public services, with a legacy of poor public services in a poor community. The collision between change and that legacy of need is creating a rich, fertile ground for the far right to inhabit, so it is no surprise that the fastest-changing community in Britain is also on the front line of the battle against the far right, which is moving in and intensifying the racialisation of access to public services. There are also tensions over workplace activity and insecurity, and unless the Government step in to provide remedies for the heightened sense of vulnerability in the workplace, the situation will become more intense.

John Bercow: I hope that I have not misunderstood what the hon. Gentleman has just said. We are all familiar with the problem that illegal pay in the informal and, by implication, often invisible economy makes the situation that much more intractable. However, am I correct in understanding his reference to a public contract to mean that he knows of cases of people being paid illegally as part of a service provided under contract to central or local government? If that is the case, it really is scandalous. Those organisations should be named and shamed and should not be on any list of contractors supplying services to central or local government.

Jon Cruddas: I tentatively suggest that it would be naive to assume otherwise, especially given the whole supply chain involved in public procurement. I would not be shocked to the core by the possibility that the House, through its contract regime, was employing unregularised migrants, or paying migrants and indigenous employees below what was set out in statutory terms and conditions of employment. My unscientific take on things is that such forms of abuse are rampant across environments such as the community that I represent.

Jeremy Corbyn: I am glad that my hon. Friend has drawn attention to that point. I am sure that he supports the “Strangers into Citizens” campaign, which, if it is successful, will help to reduce the exploitation of migrant workers. If such people ever complain to an employer of any sort—be it a gangmaster, agency or anybody else—they find themselves before the Home Office threatened with deportation.

Jon Cruddas: That is right. My hon. Friend the Member for Elmet referred to the fact that there might be a different combination of forces in London, as opposed to other parts of the country, and it is worth dwelling on the situation in London, which I touched on earlier. There are compound abuses. There is the Home Office’s systemic failure and the fact that people
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are often provided with appalling legal advice. Employers and landlords abuse those most vulnerable workers, and criminality is often interlinked with that. There are therefore five or six elements to the compound abuse, and we need a remedy that goes above and beyond simple labour market remedies of the type that we mentioned earlier.

There are issues about how we deal with the legacy of unregularised migrants in cities such as London. Some informed estimates suggest that the number could amount to 500,000 or 600,000 people, which is why people must become involved with the “Strangers into Citizens” forum, like my hon. Friend the Member for Elmet and me. The forum involves vibrant coalitions of trade unions, Church groups and political activists speaking on behalf of those who most need help, namely the most vulnerable, who are abused most systematically, especially in the workplace, which is the subject of the debate.

Remedies could be provided to the intense exploitation of some of the most vulnerable people, but it is an exercise in political will—such things do not fall out of the sky and they are not God given. My colleague, my hon. Friend the Member for Elmet, mentioned some proposals. We could have a low-pay benchmark that is higher than the minimum average, for example 60 per cent. of median full-time earnings of £6.67 an hour; we could expand the role of the Low Pay Commission to monitor and report on low pay, or set out an ambition to tackle low pay as an active public policy. The procurement regime could be altered—billions of pounds worth of public contracts are on the runway every year—or we could have fair employment conditions based on a living wage in London, and enforced by the state. Those things would mean that the state is on the front foot in saying that we should not tolerate such forms of compound abuse in our city. As was discussed, we could examine the regulation of employment agencies, which more often than not are a Trojan horse to deregulate further other employment relationships, or we could extend the Gangmasters Licensing Authority to other sectors. A series of remedies could be provided if we had the political will to do so.

To go back to some of the points touched on by my colleague, if we do not provide such remedies, I worry about the combustible combination of forces that we are developing, namely patterns of migration, and the intense exploitation of some of the most vulnerable and fastest changing communities in our society. It should be incumbent on a Labour Government to remedy the combination of forces that leads to the immiseration of the most vulnerable in our society. I commend my colleague for raising the profoundly complex issues of race and class—we who are involved in politics here in Westminster cannot ignore them or swerve around them.

11.47 am

Jeremy Corbyn (Islington, North) (Lab): I shall be brief because other colleagues wish to contribute. I thank my hon. Friend the Member for Elmet (Colin Burgon) for obtaining this timely and important debate and congratulate him on doing so.

Like my hon. Friend, I shall begin by putting the issue into context. Migrant workers in the UK are grossly exploited, by and large, but they make an incredible
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contribution to the economic well-being of our society. Our standard of living is largely dependent on migrant labour, so those newspapers, in particular the Daily Express, that constantly cite bogus immigration figures and distortions about the impact of immigration and about net migration from this country, would do well to reflect for a moment on what kind of public services, science, transport and manufacturing industries we would have if there had not been significant migration to the UK over the past 50 years. We do well to remember that we are a multi-ethnic, multicultural society that draws skills and abilities from people from all over the world, and that we have all benefited from it. We should be proud of that, not ashamed of it, and we should not allow xenophobia to take over the debate.

My hon. Friends the Members for Elmet, and for Dagenham (Jon Cruddas) mentioned the appalling nexus of poverty, lack of effective regulation of the national minimum wage and the issues that arise from those things. Like my hon. Friend the Member for Blaydon (Mr. Anderson), I am a former official of the former National Union of Public Employees, which is now Unison. The union campaigned strongly for, and finally achieved, a national minimum wage. The wage is actually very low—it is a low benchmark—so it is disgraceful to expect anyone to work for less, yet many people are expected to do so. I pay tribute to the former Mayor of London, Ken Livingstone, for forcing the London living wage of £7.20 per hour through all aspects of public procurement by the Greater London authority. That is considerably more than the national minimum wage, but it set a benchmark for other employers in the capital, which is important. When the Minister replies, I hope that he will give us an undertaking that the Government will do their best to ensure that in all aspects of procurement, wherever the supply chain comes from, national minimum wage conditions, at the very least, will be enforced by employers all the way down the line. I should not be surprised to find that even in this very building, which seems to be developing a culture of agency working, people are working for less than the national minimum wage. I have no evidence one way or the other; I just think that it is worth inquiring into the matter.

The issue of migrant workers is not new and is not confined to the UK alone. Last autumn, I represented the Inter-Parliamentary Union at a conference on “Migration: the human rights perspective”. I was elected rapporteur for the conference, which was attended by delegates from 35 countries around the world. Unfortunately, they were mostly from Africa, Latin America and Asia; disgracefully, most European countries did not bother to attend—it is hard to get from Paris or Berlin to Geneva, so obviously, the journey was far too great for them. It was disappointing how few European countries were represented. I will not go into all the details of the lengthy statement that we issued at the end of the conference, but I draw to the Minister’s attention a couple of points from it.

We made the point that

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We must stand up against xenophobia in all its forms. We have a responsibility to do so. Specifically,

that gives some degree of security for migrants.

Can the Minister assure us not only that the UK supports those conventions, which it has signed, but that he will ensure that they are actively carried out? When I reported to the conference on the success of the private Member’s Bill promoted by my hon. Friend the Member for Paisley and Renfrewshire, North (Jim Sheridan), which became the Gangmasters (Licensing) Act 2004, it was well received. A lot of people were very interested in the concept of introducing some regulation for people who are grossly exploited in the workplace.

My final point concerns the role of the media. About 3 per cent. of the world’s population are migrant workers of some form. They are shunned and treated disgracefully in many countries whose economies they have built. Many of the glittering 19th and early 20th-century skyscrapers of New York and Boston were built on the backs of migrant workers. When we look at the great edifices of the world, we see the contribution made by migrant workers. This country, too, relies upon them. We have a duty to ensure that those people are fairly, decently and properly treated.

As my hon. Friend the Member for Dagenham pointed out, the far right and racists within our society exploit issues of low pay and access to jobs and services. The way to confront that is to end the nonsense in the Home Office, which seems incapable—in my view, almost deliberately—of dealing with wholly legitimate cases involving long-term UK residents. Employers can exploit that situation by threatening those who complain about conditions with removal from this country. We need to develop a much greater sense of solidarity within the entire community to end such division and exploitation. We can do it. Through the national minimum wage, effective inspection, the licensing of gangmasters and through public procurement policies, we can ensure that a scar on the lives of many people who are badly paid and badly treated can be removed. I thank my hon. Friend the Member for Elmet, and congratulate him on securing this important debate.

11.54 am

Mr. David Anderson (Blaydon) (Lab): I, too, thank my hon. Friend the Member for Elmet (Colin Burgon) for securing this debate, but it is a shame that we have to have it. The issue should have been put to bed. Our Government and party have done fantastic work in the past 10 or 11 years, on the introduction of the minimum wage, as has been mentioned, as well as on the working time regulations, the extension of maternity pay, the right to paternity leave, sick pay and paid holiday entitlements, the right to trade union membership and the gangmasters legislation brought in by my hon. Friend the Member for Paisley and Renfrewshire, North (Jim Sheridan). Clearly that raises issues, but the agenda has all been positive.

It is sad that we are here today talking about an agenda that, to me, is about going back to the future. It is about going back to the late ’80s and early ’90s, when,
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as a local trade union official in Newcastle upon Tyne, I was faced with the reality of telling care workers, hospital cleaners, school workers, school meals ladies and school cleaners, “I’m sorry; you have lost your contract. I’m sorry; your pay is going to be reduced. I’m sorry; you will no longer be seen as a member of the national health service. You will be working for Joe Bloggs’ cleaning company.” I thought that we had done away with those days, and put them behind us when we got rid of things like compulsory competitive tendering. I thought we had got away from those days, and what we went for in this country was value-led, not cost-driven, services. It would appear from the debate today that sadly that is not the case for far too many people.

In the mid-1990s, as a national official of Unison, I worked with people who, to use their language, rescued Filipino nurses from working in care homes. Those Filipino nurses were educated to degree level and were brought to this country under false pretences, being told that they would work as qualified nurses. They worked as basic grade care workers and were treated and paid in that manner; but, even worse, they were made to pay for accommodation. They were even made to pay for the lend of a bike to ride to work. They were made to pay a bond back home in the Philippines and they were made to pay a bond in this country. The term that we used then when we got those people out of that employment and into proper public service work was rescue. We should not be back in that situation today, talking about having to rescue people from exploitative employers. It is all so sad that the impact on today’s labour market is not just on those workers. It is, as my hon. Friend the Member for Elmet said, on other people in the work force. We have still not resolved the disgraceful situation by which seamen in this country are not paid the national minimum wage.

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