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Westminster Hall

Wednesday 5 November 2014

[John Robertson in the Chair]

Care Workers

Motion made, and Question proposed, That the sitting be now adjourned.—(John Penrose.)

9.30 am

Mr Andrew Smith (Oxford East) (Lab): It is good to see you presiding over us this morning, Mr Robertson.

They do some of the most vital jobs in our country. They go unsupervised into the homes of the most frail, make sure they take the right drugs, help them with washing and the toilet, prepare their meals and often provide the only human warmth and companionship an elderly person will have all day. For all that, many are paid only £6 or £7 an hour, with no guaranteed work, zero-hours contracts even when they do not want them, and zero respect from some employers. They are home care workers. The way many are treated is an utter and shameful disgrace, and it is the job of the House and the Government to do something about that.

Given the problems, it is amazing that there is so much good home care out there. I have done surveys of my constituents’ experience, and many rate well the service they have had. They talk of caring and compassion at its best, and workers paid for a 15-minute visit staying that bit longer to do a proper job—often a stressful and difficult job. I remember the care worker who apologised for arriving a bit late to look after my mum while I was visiting. She looked a bit stressed, so I asked, “Are you okay?” She said, “Yes, it’s just that the last person I called on died while I was there.” We are not talking about an easy job.

In a privatised and competitive industry, good providers—and there are many—often face the conditions Winston Churchill described in this House 105 years ago, when he said:

“It is a serious national evil that any class of His Majesty’s subjects should receive less than a living wage in return for their utmost exertions…where you have what we call sweated trades, you have no organisation, no parity of bargaining, the good employer is undercut by the bad and the bad by the worst; the worker, whose whole livelihood depends upon the industry, is undersold by the worker who only takes up the trade as a second string…where these conditions prevail you have not a condition of progress, but a condition of progressive degeneration.”—[Official Report, 28 April 1909; Vol. 4, c. 388.]

Now, of course, we have the national minimum wage to prevent the progressive degeneration Churchill described, but the scandal is that it is not being enforced. The excellent briefing Unison supplied for the debate brings out the key disgraceful facts. An investigation by Her Majesty’s Revenue and Customs of home care companies between 2011 and 2013 found that half were guilty of non-compliance with the national minimum wage. This year, the National Audit Office reported that up to 220,000 home care workers in England are illegally paid below the minimum wage. Using the dodges of zero-hours contracts and bogus self-employment, more than half of home care companies pay workers only for the exact time they spend in clients’ homes, with no pay for travel time and no travel allowance.

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Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op): I am grateful to my right hon. Friend for raising this important issue. On workers not being paid for their travel time, he mentioned the Unison survey in England, but I can assure him that the situation is, regrettably, the same throughout the country. A Unison survey in Scotland found that more than 50% of care workers were not paid for travel time under their contracts.

Mr Smith: My hon. Friend’s point is well made. We are undoubtedly talking about a United Kingdom-wide problem. A Freedom of Information Act request from Unison this year showed that a staggering 93% of councils in England and Wales—I dare say that the situation is not so different in Scotland and Northern Ireland—do not make it a contractual condition that the home care providers that they commission must pay home care workers for their travel time.

David Simpson (Upper Bann) (DUP): I congratulate the right hon. Gentleman on obtaining the debate, and I declare an interest because my wife is a carer. One of the biggest problems, certainly in my constituency in Northern Ireland, is the recruitment and consistency of staff. They are under so much pressure because of their terms and conditions, but at the end of the day, they save the Department of Health and the Government a lot of money.

Mr Smith: Yes, indeed. The hon. Gentleman makes a good point, and I will say more about that later. Of course, there will be massive increased need for these workers in the future. One reason recruitment and retention are so difficult is that terms and conditions are often so poor.

Let me develop my argument further. Only 21% of councils have ever asked to see documentary evidence relating to the pay of care workers employed by their contractors. In the face of that and the other evidence I have cited, it is appalling that the Government are doing so little to uphold the legal rights of home care workers. It is indefensible that HMRC has stopped carrying out proactive investigations of national minimum wage compliance in home care, despite having revealed the extent of the breaches itself.

Grahame M. Morris (Easington) (Lab): I congratulate my right hon. Friend on bringing this debate to the Commons at such an important time. In my area, Durham county council has had to implement £135 million of cuts over three years, with another £44 million in the pipeline. It is commissioning home care at £11 an hour, whereas the commissioning rate in some more affluent areas is £15 an hour. Does my right hon. Friend agree that the Government’s cuts in support for local government are compounding the problem?

Mr Smith: Most certainly they are, and I will say more about that later. I support, and the House ought to support, the key action that Unison and others are calling for. First, the Government should make ending illegally low pay for care workers a key priority. Secondly, HMRC should be instructed and resourced to do a proper job in ending the widespread breaches of the national minimum wage. Thirdly, care providers and the councils that commission them should be named and shamed when they do not pay the minimum wage.

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It is not just trade unionists, local councillors and those whose loved ones use care services who are concerned about all this. In preparation for the debate, I spoke to local private care providers, and I will share with Members some of the points they made. They told me that care workers’ salaries do not reflect the responsibility they have; that luck and money are all too likely to decide people’s quality of care; that too many staff are on poor contracts, but that often reflects poor profit margins; that zero-hours contracts can be a barrier to recruitment, but that some employees want them; that staff turnover is high because of the high cost of living and shortage of affordable housing, which is an issue in my constituency; and that pressure on council budgets—the point made by my hon. Friend the Member for Easington (Grahame M. Morris)—means that restricted funding is available for front-line care.

Local providers also drew my attention to the fact that in six out of 14 areas in Oxfordshire, the county council is offering rates of funding for front-line care that are below the living wage, even though it has rightly pledged to pay its own staff above the living wage. Providers also told me that upper-tier councils such as Oxfordshire, which are responsible for home care, have their hands tied by the local government squeeze. Members should remember that all these points have been put to me by providers.

Joan Walley (Stoke-on-Trent North) (Lab): May I, too, declare an interest, as a Unison member, and say how important it is that this issue has been flagged up in the debate? Given the concerns about this issue, should home care not be part and parcel of the discussions about the future of the NHS? We need to keep people out of accident and emergency and out of hospitals. If there is no care in the community, we will put more expense on the NHS and provide worse care. Does my right hon. Friend agree that, in discussions about the future of the NHS, we should make absolutely sure that these workers are paid a proper rate for the job and that travelling time is included? The Care Quality Commission has a vital role in this.

John Robertson (in the Chair): Order. I ask hon. Members to keep interventions a bit shorter.

Mr Smith: I agree with my hon. Friend on all points. If this country is to get the standard of care we want, social care—home as well as residential—must be regarded as a central part of health service provision. The debate on health provision cannot be confined to the future of the NHS.

Providers made the point to me that 15-minute visits should be banned, except perhaps for check-up visits when other visits are being made to the person on the same day. I am pleased to say that since I raised that issue in our previous Westminster Hall debate about care, Oxfordshire county council has decided to phase them out. Others must do so too. There is a need for sustained funding and a co-ordinated push for training, to bring social care staff up to the standards required for commissioned services.

We need a scheme of accreditation that makes crossover into the NHS and back possible if we are to provide a career pathway to attract young people, and indeed

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some older people, into the care profession. Training should be part of an overall package that attracts people into care work. A carer who has had training should have certification that they can take with them to another employer. Those are points that providers have put to me. They point out that too many agencies do not even give carers their certificates, so they have no proof, and must go through the assessment—where it is provided—again. We must also have regard to the fact that the public and media perception of care too often stops at the NHS, and does not include social care. Protecting the NHS goes only part way to protecting our care system. We will protect the NHS by protecting social care, and that means that more money must go to local government. That is another point put to me by providers.

On the question of zero-hours contracts, I have been in touch with two local providers who have tried to offer salaried employment as an alternative, but have had little take-up, partly because employees are juggling a second job, and partly because they value the flexibility that allows them not to work, for example, on certain weekends. The zero-hours culture is deeply entrenched in home care work, and it will not be easy to change it, but I believe we must. The key priorities must be to ensure: that the contract does not preclude the employee from taking other work—it is disgraceful that it ever could; that the employee has reasonable freedom to take or refuse work as they like, to have time with their own family, for example; and that an exclusive zero-hours contract is not imposed. Let us also remember, however, the point of view of the person being cared for, the most important person in the debate. They usually want continuity in care, and they are less likely to get that with zero-hours contracts, under which a different carer will be sent to them time after time.

As well as the bigger reforms that I have mentioned, there are practical steps, which may vary a bit from locality to locality, that can make home carers’ jobs a little less of a struggle, and I will talk about some that are relevant in Oxfordshire. In Oxford, we have extensive residents parking zones. Home care workers must find one of the sparse two-hour spaces or get a visitor permit from the client and stick it on their car. That is one third of their 15-minute visit gone. Otherwise, they risk a fine—which is of course levied by the same county council that pays their employer to send them on the call. A way of recognising the value of home carers’ work would be to give them a permit to park in residents parking zones when visiting clients.

Another example, which is probably even more widely relevant, is that people who work in the NHS branch of the care system get a free winter flu jab. A home care worker on the minimum wage often will not get a jab unless they spend two or three hours’ worth of their meagre pay on buying one. Recognition of the value of their work could include giving them a free jab, either on the NHS or by requiring employers to make them available. I checked the 2014-15 Public Health England flu immunisation programme guidance, to which the Minister may want to refer. It states that flu immunisation should of course be offered to health and social care staff who are in direct contact with patients and service users. It states that they should be vaccinated by their employer as part of an occupational health programme. However, that raises the question of what happens

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when an employer does not offer the vaccination: is it the same as when an employer does not pay the minimum wage, and nothing happens?

I think there is a growing consensus among clients and providers, councils and trade unions, about what needs to be done in the vital service area of care. First, better funding is needed for social and home care. People will not get the standard of care that they need and deserve without it. The NHS chief executive’s vision of more care being provided in the community will be a mirage unless we raise care workers’ status and terms and conditions. Secondly, we need rigorous enforcement of the minimum wage and promotion of the living wage. Thirdly, care workers should have the right not to have a zero-hours contract forced on them. Fourthly, commissioning should encourage responsible providers. Fifthly, there should be investment in training and career pathways for care workers, with proper accreditation of care work. Sixthly, there should be regulation of the social care work force. That could start with the record of those unfit to practise that the Health and Care Professions Council has advocated.

We should all recognise the enormous value of the work that home carers do, and translate that recognition into action to improve their status, pay and training, to nurture good providers who are good employers, and to drive out the rogue operators. We would do well to remember every day that our loved ones, and we ourselves, are likely to need a home carer some day. Much good work is done by front-line carers, but too many of them are treated shabbily. That must be stopped. We must make sure that carers get the status, training and pay that they deserve, so that those who need care and those who give it can enjoy better lives, with dignity and respect.

Several hon. Members rose

John Robertson (in the Chair): Order. If hon. Members will be sensible, there will enough time for everyone to take part. I will not impose time limits at this point.

9.47 pm

Paul Burstow (Sutton and Cheam) (LD): I congratulate the right hon. Member for Oxford East (Mr Smith) on securing the debate, and on the fact that he has pursued the matters in question for some time now, making progress in his own patch by raising them here and, I am sure, back in Oxfordshire. I agree with a lot of his remarks and want to underscore some of the points that he made, but I also want to draw out some opportunities to make progress with this terrible, thorny and long stuck-in-the-mud issue.

The Government published a White Paper in 2012, which acknowledged in stark terms the contracting practice that turns care workers into clock-watchers and that sees their function as purely a transaction in which they turn up, perform a set of tasks and leave—with far too little time given to them even for that. The White Paper made it clear that such commissioning practice had to end. We now have the vehicle by which that can happen. Parliament passed the Care Act 2014, which broadly speaking was supported by all parties. Recently—I am sure that the Minister will expand on this later—guidance covering the matter was issued for local authorities. I want to dwell briefly on that first. It is important to

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remind the House of it today, and to show how assurance checks will be applied to it, to ensure that it bites on what local authorities do.

The guidance states:

“When commissioning services, local authorities should assure themselves and have evidence that contract terms, conditions and fee levels for care and support services are appropriate to provide the delivery of the agreed care packages with agreed quality of care, that will not undermine the wellbeing of people who receive care and support, or compromise the service provider’s ability to meet the statutory obligations to pay at least minimum wages and provide effective training and development of staff.”

Everything that the right hon. Member for Oxford East has called for is encapsulated in that guidance statement, but how will local authorities assure themselves that it happens? Clearly, part of the answer is what they put in the contract, and part must be their contract monitoring. Another part is the local authority’s proactive role to assure itself and its citizens that the national minimum wage, at least, is being paid.

Helen Jones (Warrington North) (Lab): Does the right hon. Gentleman remember supporting a Local Government Finance Bill that imposed the most draconian cuts on authorities whose populations were most in need of care? If he wants all this to happen, the finance must follow through.

Paul Burstow: I will come to finance, but I hope that when we have contributions from Front Benchers there will be some indication of commitments for the future and of what has been done so far. For many years under the previous and current Administrations, local government settlements have left local authorities in a difficult position when funding social care. No one disputes that, but we should be honest about the fact that that problem did not start in 2010, although the incoming Administration had quite a bit of difficulty in dealing with the deficit.

I want to draw attention to 15-minute contracts, which are another aspect of this debate that relates to the guidance. During the passage of the Care Bill, hon. Members on both sides of the House, particularly in the Public Bill Committee, were very clear with Ministers that we expected the guidance to be clear on that point, as it is. It says:

“For example, short home-care visits of 15 minutes or less would not routinely be appropriate for people with intimate care needs”,

and goes on to list what that would mean in practice. I hope that the Minister will explain how he intends to ensure that local authorities are both supported and encouraged to ensure that the guidance is put in place.

I wanted to speak in this debate because at a constituency surgery about a month ago, a home care worker came to see me wanting to talk through what was happening to them and the people they worked with concerning their time sheets and pay. They have to pay for work-related calls on their own mobile phone, and for fuel in the car that the organisation provides. That might be thought to be a good thing, but I was told that the care workers have to take the car to be MOT-ed, and if it fails they are encouraged to drive it without. There is some pretty shoddy practice going on, and care workers are at the front.

The right hon. Member for Oxford East was right to highlight the issue of flu jabs, and I hope the Minister will say what is intended. The guidance is clear: health

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and social care workers should have access to the jab, but if it is not provided free to social care workers, it is likely that it will not be widely taken up.

Mr David Anderson (Blaydon) (Lab): Will the right hon. Gentleman give way?

Paul Burstow: I will give way, but I am conscious that I must keep my remarks short so that other hon. Members may speak.

Mr Anderson: The right hon. Gentleman was a Minister. Does he agree that it is wrong if people are not paid when travelling from one workplace to another?

Paul Burstow: A whole set of practices, of which that is one, result in people being paid less than the national minimum wage. That is why I wrote what I did very clearly in the White Paper on care and support and why, since leaving the Government, I have supported steps to have the guidance in place. I want to hear the Minister say in his response how that guidance will get traction on the ground in how local authorities behave.

The matter is important because we know that the care sector has among the highest rates of staff turnover of any part of our economy: 30% in some parts, and up to 19% to 20% in the care home sector. In the past 12 months, I have engaged with people from across the residential care sector while working with the think-tank Demos and looking at what we can do to address the issues that the right hon. Member for Oxford East has talked about. Domiciliary care workers are all too often hard done by, but we should not ignore those who work in residential care settings and are often paid barely above or even below the national minimum wage.

That is why we need HMRC to continue to engage proactively in this area and why I support the proposition that third parties, such as Citizens Advice, should be able to make referrals to HMRC so that it can trigger investigations when necessary. It is important to call out those who breach their obligations under the national minimum wage. When there is clear evidence that bad commissioning practices are making that happen, the Care Quality Commission should call out the chief inspector for those failures. I hope that Ministers will look at the powers available to allow inspections of local authorities in that regard.

We also need to pick up on the right hon. Gentleman’s point about how to raise public esteem for this work force. They have a deeply trusted role, even if the public are often sceptical because of the stories they hear. The role is important and responsible, and we do not properly honour and reflect that. That is why, in December, the Local Government Information Unit will publish further work looking at those issues and at what we can do to turn what is often seen as a temporary job into a permanent career with opportunities rather than one that goes nowhere, which is all too often how the sector is seen and treated.

There is an economic case for that, apart from the strong moral case that the right hon. Gentleman made. We have a generation in their 50s who are squeezed between caring responsibilities for their parents and their children. At the same time, they are expected to

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work and need to do so. We often stretch them beyond breaking point, and many leave the workplace. Supporting family carers more effectively and having reliable, cost-effective home care services is the right thing to do by them and by our economy. We recognise that in child care, but we have not recognised it in elder care. We now need to do so and to ensure that people want to work in the sector and see a future in it.

My final comments are about transparency. In my Demos work on the future of residential care, I and my fellow commissioners have said that several things need to happen. We need transparency in the way in which providers operate. There should be open-book accounting so we can see transparently how they are behaving in practice. We also need transparency in the CQC to provide clarity on the rates for care. There should be clear rates. The United Kingdom Homecare Association has produced a formula on its website, and it would be good if local authorities adopted it.

We also need more honesty about the long-term funding of the system, which is why we need the Office for Budget Responsibility to be given a new mandate for reporting on that so that there is more transparency and accountability in this place and we can hold Ministers to account on whether they are properly funding the sector.

Dr Alan Whitehead (Southampton, Test) (Lab): During the right hon. Gentleman’s term as a Minister or in his work with Demos, has he reflected on the fact that reports have suggested that more than 1 million social care workers will be needed by 2025 to deal with increasing age and disability? Has he reflected on the impossibility of that goal being reached if the practices that we have heard about this morning continue—the turnover and loss of people in the sector and the inability to recruit people into it in future?

Paul Burstow: Yes and yes, which is why I made the point about the economic imperative and why we need to see the sector as an essential part of our economic infrastructure.

I wondered which Minister would respond to the debate. We tend to think of the matter as being about care, but it is also about the economy. It would be great to have Ministers from the Department for Business, Innovation and Skills engaged with the issue, given their responsibilities for the national minimum wage. It is a shame that BIS Ministers do not engage with the sector as much as they should to ensure that it develops as necessary, not least in terms of skills. The national minimum wage is where to start, but we must aspire to more. Demos’s work suggests that we need to move the sector to a living wage, which would mean real benefits for providers because it would drive down staff turnover, which would reduce the frictional cost of employing new people. That would be a saving for businesses and would reduce absenteeism. A study in London, where the living wage is being progressively introduced, estimated a 25% reduction in absenteeism, so there are real benefits to employers paying above the national minimum wage and actually paying a living wage.

For all those reasons, I welcome the debate. It is important, but it is also about recognising the overall quantum of funding going into adult social care—the hon. Member for Warrington North (Helen Jones) is

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absolutely right about that. I look forward to the Labour Front-Bench spokesman setting out what Labour’s spending plans are. We have heard about the plans for the health service, and the right hon. Member for Oxford East is right; we tend to talk about the health service and neglect social care. I hope that the shadow Minister will not neglect social care and will say what, within Labour’s spending plans, will deal with the funding issues in social care too.

Several hon. Members rose

John Robertson (in the Chair): Order. If Members could keep their contribution to eight minutes, that would be very helpful.

10 am

Jim Shannon (Strangford) (DUP): I will certainly keep to that figure if I can, Mr Robertson. I congratulate the right hon. Member for Oxford East (Mr Smith) on bringing the matter to the House for our consideration. For us in Northern Ireland, the role of care workers is important, as it is across the whole United Kingdom. Every one of us will have personal knowledge from our constituents, and perhaps in some cases from a family point of view, of the good work that care workers do. As the spokesperson for health for the Democratic Unionist party here in Westminster, I am delighted to make a contribution.

There are a great many different kinds of care offered in the UK; a cross-section includes care homes and home care, which we probably all know about as individual MPs. There is also dementia care—we have to recognise that the population is growing older and that there are more cases of dementia and Alzheimer’s—palliative care and care for those with learning or physical disabilities, to name just a few. In the case of palliative care, Britain is the only country in the world where it is a recognised medical specialism with a full four-year training programme. We have the best palliative care in the world, and it is good to recognise that.

In a recent survey by The Economist, Britain was ranked first in the world for quality end-of-life care. The survey took in 40 OECD and non-OECD countries, including the USA, the Netherlands, Germany and France. When we are beating all those countries—many of us look across at them with some awe when we hear some stories about what they can do—and hearing that we are in the front line, that is something we can be proud of, as it is extremely important to provide the best possible care right through a person’s life, and particularly at the end of their life. I stand in awe of how care workers, of every kind, in every type of care, do their jobs. It takes a certain kind of person to be able to do those jobs—I am not sure whether I could do it, but I admire those who can and who do it well.

A variety of organisations throughout the United Kingdom of Great Britain and Northern Ireland offer these vital services. The NHS is, of course, the main one, but Care UK is also one of the leading independent providers of health and social care services across the UK. For those who do not need to go into a respite or care home, home help is available and care workers can help in a number of ways, from domiciliary care to shopping, cooking and cleaning, and driving the person to and from community events.

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Mr Gregory Campbell (East Londonderry) (DUP): Does my hon. Friend agree that there is sometimes a double whammy, in that the standard of care is put at risk because of the often condensed nature of a 15-minute visit, while that also puts stress and pressure on the care worker, because of the severe intensity of trying to ensure that they get there in time knowing that they have a very limited window? That is causing problems doubly, both for the carer and for those for whom they care.

Jim Shannon: I thank my hon. Friend and colleague for mentioning that. Every one of us will adhere to that and will have examples of that as well.

Care workers are responsible for looking after older people, including, as mentioned previously, the provision of dementia care and palliative care, and people with learning disabilities, in order to provide a full and independent life—it is important that we try to make their lives as normal as possible. My hon. Friend highlighted the issue of care workers rushing in for a 15-minute slot, in which they interact with the person verbally and help them physically, or whatever their duties may be. To do that and be out of the house in that time is, I would suggest, impossible.

Care workers also work alongside those with physical or mental health disabilities, as well as people who have acquired a brain injury and are working along the pathway to rehabilitation. On that matter, my brother Keith had a motorbike accident some 10 years ago. He had very serious brain injuries, but care workers gave him attention during their four visits a day. Without those care workers, it is clear that he would not be able to have a normal life at home—as much of a normal life as he could have—so again, everyone is aware of the work that care workers do and the difference that they make.

As was referred to earlier, dementia will affect one in six people over the age of 80. Some 750,000 people in the United Kingdom live with dementia, and having that disease does not always mean that someone goes to a care home. People can stay at home and have a good quality of life at home—that involves not only those who are at home, the family members, but those who call—and undoubtedly, that is due to the fantastic work and support of the care workers who enable men and women with the disease to enjoy an independent and rewarding lifestyle.

Hospice care can run for days, months or years. Most care is provided in people’s homes, but people also visit hospices for day therapy and stay as in-patients. Hospices provide expert care and support for 360,000 people—those are not just figures, they are people. They are individuals and their families, and that is a point I want to hit on as well. The care and support is based on the belief that everyone matters all the way through their life until the moment they die, and that no one should die in avoidable pain, suffering or emotional distress. Such care is very important, as Britain’s older population is set to rise sharply over the next few decades, with the number of people aged 85 and over expected to double in the next few years—some in this room may fit into that category, I suspect, and hope that they will have a good quality of life at that time as well.

Undoubtedly, the job of care workers is not an easy one, and we are deeply indebted to them—people have got to recognise that rather than miss it and not speak

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of it. However, in recent years, they have not always hit the headlines for the right reasons. Abuse is something that we take extremely seriously, but when we hear of it taking place in care and respite homes at the hands of care workers, who are employed to support and care for them, it is truly sickening. We have heard reports of physical, sexual and emotional abuse. Earlier this year, BBC 1’s “Panorama” did a story on some homes where residents were physically beaten, verbally abused and left in their own excrement for hours.

A Government initiative in England was set up in 2000 called “No Secrets”, aiming to set out the ways in which workers were expected to treat patients with dignity, respect and compassion, as well as ensuring that health and social care services work together effectively. It was a great initiative back in 2000, but given what has come to light in recent months, I feel—perhaps the Minister can respond to this point—that much more needs to be done to ensure that what was set out in the “No Secrets” initiative at that time works better.

The majority of care workers do fantastic work. They do their jobs because they are passionate about helping those who are in less fortunate positions than themselves. However, as with every job, there are those who take advantage, and we have to ensure that vulnerable patients are well looked after and that no abuse takes place. We all recognise the great work that care workers do. They are undoubtedly overworked and do a phenomenal job, and for many people, they are the only contact that they have with the world outside their door.

10.7 am

Paul Blomfield (Sheffield Central) (Lab): It is a pleasure to participate in this debate with you in the Chair, Mr Robertson. I join others in commending my right hon. Friend the Member for Oxford East (Mr Smith) not only on securing the debate, but on an incredibly powerful opening contribution.

During the conference recess, I carried out a community consultation. I spoke to about 1,800 constituents in 61 meetings over three weeks. The dominant issue that came out of that consultation was low pay and abusive payment practices, particularly from those who told me some fairly horrendous stories about working in the care sector, and particularly about zero-hours contracts and non-payment of travel time. I accept my right hon. Friend’s point that for some people, zero-hours contracts work, but there are too many abusive zero-hours contracts. I thought that I understood the issues: peoples’ uncertainty about what hours they would work from week to week, and the difficulties of navigating the benefit system on low pay. However, people told me stories of getting a phone call on a Sunday night and being told, “Get on the bus. Travel across the city. We have work for you tomorrow morning at 8 o’clock”, only to arrive and be told, “Sorry, there is no work available”, or, “If you would like to hang around till 2 o’clock this afternoon, we might have some work for you.” We really have to address that sort of abusive employment practice.

Another care worker told me of her experience of non-payment for travelling time. She will get one job on one side of the city, a second on the other side, and a third a considerable distance away again. Paid the minimum

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wage for contact time, she is in effect working eight hours but being paid for four or five—a really abusive practice that we must address.

Mr Anderson: Let me advise my hon. Friend that at a recent meeting with Unison members who work in the care sector, one of them made the point that she worked 27 hours a month travelling between jobs. That was 27 hours a month for which she should have been paid, but was not. That is a disgrace.

Paul Blomfield: I thank my hon. Friend for his intervention. He is absolutely right: it is a disgrace. However, last week on Radio 4’s “Today” programme, I heard a care commissioner and a care provider debating the issue and accepting almost as the norm—indeed, for too many people it is the norm—that travel time is not paid for. That was so accepted in the discussion that I had to check with the House of Commons Library that it is in fact an illegal practice. However, it is accepted across the sector by commissioners and providers. People doing some of the most important work in our society, as my right hon. Friend the Member for Oxford East pointed out, are denied the dignity of being paid even the minimum wage, and it is tough enough to make ends meet from month to month on the minimum wage.

The arguments about the impact on care standards, the increase in hospital admissions because carers are spending less time with people, and the impact on staff turnover are well rehearsed, but we need to get to the bottom line. It is simply wrong that people are being paid an amount that contravenes the law, and too many people are accepting that. Allowing these practices to continue makes a mockery of having a national minimum wage.

Yesterday was the day in 2014 on which women in full-time work in effect stopped being paid—I am referring to women’s wages as a proportion of men’s wages—because of the gender pay gap, which is widening under this Government. Is it any wonder that that gap is widening when abuses such as these in the care sector, in which most workers are female, are just allowed to continue? I use the word “allowed” carefully, because it is not that the Government do not know about the abuses. The Minister’s right hon. Friend the Secretary of State for Business, Innovation and Skills said:

“The problem with domiciliary care is that there is almost certainly an avoidance by companies to pay the minimum wage, and that overlaps with the problem of zero-hours contracts. We recognise that there are some very specific problems for workers in that sector.”—[Official Report, 26 June 2014; Vol. 583, c. 447.]

HMRC, too, knows that that is happening, because an investigation of care providers between 2011 and 2013 found that 50% or half of care providers investigated were guilty of non-compliance with the national minimum wage, yet what are the Government doing to tackle the exploitation of predominantly female carers looking after our frail, vulnerable and disabled relatives? According to the Public Accounts Committee in July 2014, “seemingly little” has been done. I am inclined to agree and, given the nodding heads on both sides of the Chamber, colleagues agree, too.

Having found a 50% non-compliance rate, HMRC has stopped carrying out proactive investigations into minimum wage compliance in the care sector. I hope that the Minister will explain that decision for us today

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and, more importantly, will commit to talking to colleagues across Government about reversing it, because it is simply not acceptable for the Government to say that they are concerned about this issue but remove the resources for addressing it.

In the same vein, given the overlap between non-payment of the minimum wage and the problem of zero-hours contracts, will the Minister look to give bodies such as trade unions and law centres a formal, third-party role, so that reports of national minimum wage breaches can be treated as formal complaints? I ask that because we know that part of the reason for the incredibly low level of reporting of abuses—there were just 11 complaints to the pay and work rights telephone helpline in 2011-12 from home care workers—is the precarious position in which care workers on zero-hours contracts find themselves. If they put their head above the parapet, they will find themselves with no work next month, so I would also like to hear from the Minister what the Government are doing to promote the pay and work rights helpline for those who do feel confident enough to use it.

Will the Minister assure us that when workers do complain, they will be paid what they are owed? I ask that because written answers to my hon. Friend the Member for Stockton North (Alex Cunningham) suggest that the Government are not in a position to say either way. I therefore urge the Minister to talk to colleagues about collecting the data, because how else will we know the success of HMRC’s intervention?

Care workers do one of the most important jobs in society. They look after those whom we are concerned about most—the most vulnerable—and whom we love the most, and they deserve better.

10.15 am

Mrs Emma Lewell-Buck (South Shields) (Lab): It is a pleasure to serve under your chairmanship, Mr Robertson. I congratulate my right hon. Friend the Member for Oxford East (Mr Smith) on bringing the debate to the House today. A number of colleagues have already spoken about the minimum wage, so I will try not to dwell on those issues too long, and will address some of the other significant and worrying challenges that care staff face.

Too many care workers are underpaid for the work that they do. Unison estimates that, altogether, 220,000 are not paid the minimum wage. HMRC found that half of care providers fail to pay the minimum wage and, despite the consequences of that for care workers, their families, the overall quality of the care work force and the standard of care that people receive, the Government have continued to fail to act.

The failure to pay for travel time is a common tactic and should not be difficult to fix. Earlier this year, during the passage of the Bill that became the Care Act 2014, I and Opposition colleagues raised the minimum wage issue time and again. We tabled amendments on Report asking Ministers to look specifically at travel time and travel costs. We were told that that would be addressed in the guidance that was published at the end of last month. I think that it is fair to say that the guidance is nowhere near strong enough. It says:

“Remuneration should be at least sufficient to comply with the national minimum wage legislation”.

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To me, that says that it should be, but it does not have to be. It says that it would be nice if providers paid their staff a decent wage, but that there is no requirement for them to do so.

The Minister of State, Department of Health (Norman Lamb): I just point out to the hon. Lady that this is a criminal offence; it is not an option. I totally agree with the points made by the hon. Member for Sheffield Central (Paul Blomfield). It is a criminal offence, and this is not an optional matter. There is no doubt in the law. Employers have to pay for travel time between appointments at people’s homes.

Mrs Lewell-Buck: I thank the Minister for that intervention. If that is the case, why is the guidance not stronger? What I read out is not the language of the minimum wage. The minimum wage is not a target, but a right.

Mr Andrew Smith: Does my hon. Friend agree that it is not good enough for the Minister simply to say “It is a criminal offence”, as though that solves the problem? It is not solving the problem, because hundreds of thousands of workers are not having their legal rights protected. In his speech, he needs to tell us what he is going to do about that.

Mrs Lewell-Buck: I could not agree more. The guidance should include a proper requirement for compliance with the minimum wage law; otherwise it will simply be ignored, as it currently is. I hope that the Minister will commit to strengthening that requirement when he sums up the debate.

Providers might also be convinced to pay their staff a fair wage if they thought that they might suffer consequences for non-payment, but it seems, sadly, that under this Government there are no consequences. The Government told us that they would “name and shame” companies that failed to pay the minimum wage, but so far only a handful have been named and not one of them has been from the social care sector. That is unbelievable when we consider that HMRC believes that half of providers are non-compliant. The Government’s relaxed attitude lets providers know that they can continue to ignore minimum wage laws with no consequences.

In all this, we have to remember that what affects care staff also affects the people they care for. Quality social care needs well trained, motivated staff who are able to build a strong relationship with those they care for. All the evidence suggests that things are moving in the opposite direction. The care sector is not an attractive place to work right now.

The weak requirements on the minimum wage create an unfair playing field for care providers. With the funding pressures facing councils, the incentive to commission on cost is stronger than ever, and as long as the wage is considered a target and not a requirement, providers that pay a fair wage will be at a disadvantage, compared with those that break the rules. The providers that win contracts will be those that are least able to attract and retain well trained staff, and service users will lose out as a result.

Pay is not the only problem. Care workers have told me horror stories about the way in which they are managed and the effect that that has on the people they

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care for. Timetabling of visits is a disaster. Appointments are booked back to back, so staff do not get to spend the time with clients that they are allocated. If a client needs a little extra help, dedicated care workers often go back in their free time. I have also heard of cases in which incompetent management has meant that multiple staff have been booked to cover the same appointment. After they have all shown up at the client’s home, only one of them has been paid. Not only is that bad for staff, but it means that clients sometimes do not see the same carer twice in a week, and they never get a proper introduction to a new staff member. Clients are expected to let a stranger into their home because they say that they come from an agency. The system owes people better than that.

Staff have told me that the training and supervision offered by some providers is close to non-existent. One employee told me that their training consisted of being given a set of forms to fill in, after which they were given no feedback and no professional advice or support. Not only were they not paid for that training, but they were told that they would be financially penalised if it was not completed in time. Essentially, they were training themselves, and the provider took no responsibility for making sure that its staff were fit to do their jobs.

Even on important matters of safeguarding, some staff received no training, and they were entirely unprepared to deal with situations in which they thought a client was at risk of harm. Worse still, although staff in such a situation should be able to refer the matter to a manager, in some cases even the managers did not appear to understand how safeguarding procedures worked or how to proceed, with the result that at-risk clients were left in serious danger. As many care staff work on zero-hours contracts, they are afraid to speak out. They cannot afford to challenge their employer or properly advocate on behalf of their clients, because if they do, they find that they are denied shifts.

That is why there should be a proper system of oversight, and it is why Opposition colleagues and I tabled amendments to the Care Bill to give the Care Quality Commission responsibility for overseeing the commissioning of services. It is not enough for the CQC simply to inspect services on the ground, because by the time an inspection is carried out, serious failings could have occurred. The CQC should look at the standards on which local authorities commission, to make sure that the providers to which they award contracts can do the job properly.

Between low pay, stressful working conditions and lack of support, it is no wonder that many skilled care staff are leaving the sector as fast as they can. To stand up for vulnerable people in care, we have to stand up for our dedicated and hard-working care staff. If the Government want to show that they value high-quality care, they need to start holding providers to account and making sure that they take their obligations to staff seriously.

10.23 am

Mr David Anderson (Blaydon) (Lab): It is a pleasure to serve under your chairmanship, Mr Robertson. I congratulate my right hon. Friend the Member for

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Oxford East (Mr Smith) on securing the debate. He may not remember, but in 2000 he and I sat in a room in Exeter and negotiated for the Labour party manifesto to contain a policy to protect people at every level where there was a two-tier work force—that is, where people were outsourced. We wanted to ensure that even if a worker was no longer employed by a public body, they would suffer no detriment. Where are we now? For a start, where are the 320 Tory MPs? This is a debate about care, and the fact that they are not here shows how much they care. It is an absolute disgrace.

The debate is about the exploitation of those we rely on to take care of the people who did everything for us, wherever we are and wherever we come from. My parents fought the fascists, and they helped to build the welfare state. Other people here might be younger than that, but whoever we are, we know that home care workers look after the people who gave us everything.

I became a care worker 25 years ago. I took a temporary job for 13 weeks, but I was still there 16 years later, before I came to the House. For most of that time, I was employed by Newcastle city council and I was involved in trade union work. One of the great parts of my job was working with home care workers. In the professional side of my job, I was a key worker looking after a number of elderly people. We used to arrange meetings with everybody from the director downwards, and the truth is that the key people were the home care workers. They were the people—almost always women—who went into people’s houses day in, day out and built up a rapport not only with the client, but with their family. A home care worker knew when their clients were feeling off-colour, when they had problems or when the grandbairns were not very well. They knew those things because they had continuity of care and continuity of access to their clients, and that is how proper public services should work.

Even in those days, in 1992, we were paid paltry wages. In the council, we were paid only £4.85 an hour, which was not very much even then. We were, however, paid more than those who were paid by the privatised agencies that were coming to the council at that time, as a direct result of the former Tory Government’s cuts. Home care workers who worked for an agency were paid £3 an hour. It took a lot of digging, but we found out that the agency was being paid £9 an hour, so it was getting 200% more than the person who was actually doing the work.

In many ways, things have not changed, except that those who run outsourced services have found different ways of exploiting people, whether by failing to pay for travelling time or by saying that people have to use their own car. We have heard a disgraceful example of a care worker being encouraged to drive a car that had failed its MOT test, which is absolutely unbelievable in this day and age. The Minister has said that such things are criminal. They are, and we should start treating those who do them like criminals. If we were talking about someone who was fiddling their benefits, the Government would be on top of them like a ton of bricks. Political parties are letting down those who do the most crucial work in our country.

I do not intend to continue to pick up the points that my right hon. Friend the Member for Oxford East made in his speech, which nobody can argue against. He is right to say that social care problems are not

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confined to councils and the NHS. Later today, there will be a meeting in Committee Room 19 with workers from Care UK, and it would be great if the Minister could come. The hon. Member for Strangford (Jim Shannon), who is no longer here, has mentioned Care UK. Workers in Doncaster have been on strike for three months against Care UK, because they are being transferred to the company and are facing a 40% pay cut. Some of those workers have 30 years’ experience. How on earth can that be right? How on earth can that be fair?

I spoke to a young woman in Gateshead who came to our council to collect money to support her and her family, so that she could try to stay out on strike and make a point against Care UK, which is exploiting its workers. The young woman told me that she was from Newcastle, and she had moved to Doncaster eight years ago to live with her partner. She said that if staff were forced to go back to work under the new conditions, she would have to leave work and come home to live with her mother. That is the sort of thing that was going on 100 years ago. It is a disgrace, in this day and age, that public services are being run by people who have such an attitude towards carers.

I have been advised by Unison that 70 of the workers who were outsourced to Care UK have left the service. We may end up losing people whose experience in the care service totals hundreds, if not thousands, of years. That will be to the detriment of the country, and to the real detriment of those people. Perhaps one reason why the Government have not been very active on the matter is that the chairman of Care UK, John Nash, has given the Tory party some £250,000 over the past few years. Not only has he been awarded contracts, but he is being made a peer along the corridor from where we all work.

We are talking about taking care of people. It is called care, and the Minister will have to show whether he cares for those people or not. If nothing serious comes out of the current situation and the work that was done by my colleagues on the Care Bill, we will have wasted our time. The Minister will not deserve to have any more respect from the people of this country, particularly the carers, whom we need to look to the most.

10.29 am

Helen Jones (Warrington North) (Lab): I rise to make a brief contribution to the debate. The issues have been set out admirably by my right hon. Friend the Member for Oxford East (Mr Smith) and others. I apologise in advance for the fact that I cannot stay for the wind-ups.

We are facing a scandalous situation. The people who do some of the most difficult jobs in our society are not even reaching the minimum wage because of the scams that are being perpetrated in the care sector. They are not paid for travel, they are on zero-hours contracts, and other scams are perpetrated against them. When I talk to care workers in my constituency, I see that they are decent people who just want to do a decent week’s work, and I can see what that means. They have to rush between appointments, and they feel guilty about not being able to spend time with their clients. They believe that the care they are giving is not of the quality that people should receive.

Care is not just about getting somebody washed and dressed, or giving them their breakfast; it is what it says it is. Care is about spending time with people, listening

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to them and talking about the problems they face. It says much about our care workers that, as well as worrying about their own wages, as they are entitled to do, they worry about the impact on their clients of what is, frankly, a rotten system.

Let us consider what really happens. If care workers are on zero-hours contracts, they are paid only for their actual appointments, and not for their travelling time. It is estimated that 220,000 people are not being paid the minimum wage. That has been allowed to happen for far too long—those 220,000 people cannot meet their bills at the end of the week, despite working full time. Does the Minister honestly understand what that means? I do, because I remember it from my earlier life. It means running out of money by the end of the week and relying on friends or family to help out. Friends and family bring things saying, “Well, I got it as a two-for-one offer,” or, “This was on sale,” but people know they were not and that their friends and family are trying to spare their feelings. Zero-hours contracts mean that it is a crisis when a child needs a new pair of shoes or grows out of their coat. That is the position that we inflict on people who do some of the most difficult jobs in our society by caring for the elderly and the disabled—the most vulnerable. I suspect that most of us in this room could never do those jobs, except for my hon. Friend the Member for Blaydon (Mr Anderson), who has actually done it.

Her Majesty’s Revenue and Customs found that nearly half of the firms it inspected in the care sector were not paying the minimum wage. Very few of those firms have even been named and shamed. How many of them have actually been prosecuted? As the Minister said, they are criminals. In what other sector of life would we say to a criminal, “We know you are doing it, and we would like you to stop. We are not actually taking you to court, and we are not prosecuting you. We know you are a burglar, but will you just give it up?” We do that with the minimum wage, which is an absolute disgrace. The Government must take responsibility. Yes, some local councils must take responsibility, too. It is true that local councils do not always monitor the contracts that they give out, do not ensure that people are paid properly and do not check workers’ wages, but that is not surprising given the situation in which they find themselves.

It is all very well for the right hon. Member for Sutton and Cheam (Paul Burstow) to tell us about the duties he imposed on local councils, but if we will the end, we have to will the means. It is a fact that the councils that face the most draconian cuts under the Government’s Local Government Finance Act 2012 are also the councils that have the highest levels of long-term disability and the biggest need for social care.

If the Government want to impose duties on local councils, they have an obligation to ensure that those councils have money available to meet those duties, otherwise councils will simply put the responsibility elsewhere and fail to meet their own. We know what happens when such systems are in place, and we know what happens when care workers cannot spend enough time with their clients: health problems go undetected, and people’s feelings of loneliness and isolation increase, driving up mental health problems. There are more falls and more admissions to hospital. There is a cost to the people concerned, and to the NHS, because a good care system cannot be run on the cheap. It requires properly

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trained, properly paid and properly supervised staff. The most vulnerable people in our society deserve no less. The Government have been trying to run care on the cheap, on the backs of dedicated workers who are being treated shamefully, and it is time that that stopped.

John Robertson (in the Chair): I thank hon. Members for their use of time.

10.36 am

Liz Kendall (Leicester West) (Lab): It is a pleasure to serve under your chairmanship, Mr Robertson. Like all hon. Members who have spoken this morning, I congratulate my right hon. Friend the Member for Oxford East (Mr Smith) on securing this absolutely essential debate, particularly as this is annual living wage week. As Members of Parliament we all get hundreds of e-mails and letters from people calling for us to speak up for issues. I do not get a lot of e-mails from care workers because they are frantically working, but our job is to speak up for people who do not have a voice, which is what he has enabled us to do today. People have spoken passionately about this issue.

Although I do not have the experience of my hon. Friend the Member for Blaydon (Mr Anderson), one of the first things I did after becoming an MP was to do a shift with a care worker in my constituency. My goodness, was it an eye-opener. Amanda, from New Parks, loved her job, and she desperately wanted to care for people. She said that she never thought that she would make anything of her life, and doing that job gave her a real sense of fulfilment, but she was rushed off her feet. She was trying to fill in for staff who were off sick or who had left. She said to me, “The trouble is that girls get more money at Morrisons than they do doing this, and they get their hours set, so why wouldn’t they go and do something like that?” That was the start of my understanding of just what this means to people. From the other side, I have seen constituents and members of my family receive 15-minute home visits, which are not enough to get someone up, washed, dressed and fed. It is barely enough time to have a proper conversation, which causes problems for people who are left isolated in their own home.

Many hon. Members have spoken powerfully about how home carers are undervalued, underpaid and undertrained. Undervalued because they do not even get the dignity of having a decent contract—nationally, there are more than 300,000 care workers on zero-hours contracts. Underpaid because up to 220,000 care workers do not even get the minimum wage, let alone the living wage, when they are doing some of the most vital work in looking after people whom we care for and love, and who brought us into this world. And undertrained because around a third of care workers receive no ongoing training, yet they are doing some of the most vital, intimate and personal tasks.

We are seeing low staff morale and high turnover of around 20% to 30% annually. Vulnerable people do not even know who is going to come in and help to get them out of bed or take them to the toilet. I would want to know who is coming into my bedroom to get me out of bed, yet that is not the experience of many people. It is

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not just that the present situation is not good for care workers; it is not good for the people who use care or for taxpayers, either.

We are seeing ever-increasing numbers of elderly people ending up going into hospital when they do not need to be there, and getting stuck there, too. Delayed discharges from hospital are at their highest ever rate, costing more than £260 million in the past 12 months. That would pay for 37,000 people to have a whole year’s worth of home care. Where on earth is the sense in that?

Like my right hon. and hon. Friends, I believe that the Government are not doing enough to tackle the problem. Many hon. Members spoke about the new guidance for local authorities to look at whether their service providers are paying their staff below the minimum wage. I do not think that that is anywhere near strong enough. “Should” needs to be “must”. If people are not paying what they are legally required to, enforcement should be much tougher. It was a profound mistake for the Government to remove the Care Quality Commission’s role in assessing the quality of council commissioning. If the CQC was able to assess whether local councils were commissioning care properly, that would be a key thing to check them on.

In July, the Public Accounts Committee, chaired by my right hon. Friend the Member for Barking (Margaret Hodge), said that it was

“astonished that...seemingly little has been done to rectify”

the scale of non-payment of the minimum wage in the care sector.

In April this year HMRC replied to a freedom of information request that I submitted. It said that half of all the care providers that it had been investigating—more than 100 employers—had been failing to pay the minimum wage in some form, and that more than £1 million was owed to workers. Imagine that. If anyone had stolen—that is what this is—£1 million, action would be taken. I am disappointed that Ministers and HMRC have not named the providers involved. Despite the Minister saying that providers should be named and shamed, that simply has not happened in the care sector. I hope the Minister will explain why not.

Several hon. Members said we need to make sure that HMRC proactively looks at the underpayment of the minimum wage and not simply wait for care workers to ring the pay and work rights helpline. Only 19 workers did so in 2012-13. We know they are not being paid, but they are busy. They are rushing round. They have lives to live. We should have much more proactive measures.

Mr Anderson: My hon. Friend is absolutely right. People are busy, but they are also frightened. They have no protection. Employers have complete control over their lives with zero-hours contracts. If people complain, they will not get any more work. That is the truth.

Liz Kendall: My hon. Friend is absolutely right. I was going to come to that point. If someone is on a zero-hours contract, they will be too terrified to tell their employer that they are not paying the minimum wage. I am not yet convinced that the Minister is working closely enough with Ministers in the Department for Business, Innovation and Skills. According to an answer to a written question from my hon. Friend the Member for Stockton North (Alex Cunningham), the Minister has had just one

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meeting all year with BIS to discuss underpayment of the national minimum wage in the care sector. That is not good enough. We need more action.

Several of my right hon. and hon. Friends rightly said that £3.5 billion has been cut from local council adult social care budgets. Within that context, the pressures are building.

Paul Burstow: The hon. Lady and her Front-Bench colleagues want to convey the impression that in seven months’ time they will be in government and therefore making decisions about the allocation of resources for adult social care. Will she share her thinking?

Liz Kendall: I will, and I will come on to the extra money that we have committed to putting into health and social care. We are committed to a £2.5 billion transformation fund that will cover both the NHS and social care, and that includes money to pay for 5,000 home care workers. So we have said what we will do in addition to the ring-fenced money to try to kick-start the services in the community that patients and taxpayers need.

We have put care issues and exploitation in the care sector at the heart of our agenda. Baroness Denise Kingsmill conducted an excellent review for us on exploitation in the care sector. I encourage all Members to read it if they have not had a chance to do so already. She has set out tough, credible and realistic proposals, including on how to properly enforce the minimum wage, ban exploitative zero-hours contracts and end inappropriate 15-minute visits. She has called for better training for care workers and also for managers of care providers—that is essential—as well as support for ethical care charters such as that which Unison has promoted.

I want to say a little about what I saw yesterday, which was an inspiring example of a Labour council in Islington putting ethical care into practice. Yesterday I helped to launch and celebrate its new home care service contracts. Those will ensure that all home care staff are paid the London living wage—£8.80 an hour now, rising to £9.15 in January—including for travel time. Exploitative zero-hours contracts have been banned, and people are guaranteed a minimum of 16 hours a week.

The council is also giving far more say to the users of services so that they can decide how and when their hours of care will be provided, and, unless they specifically request a 15-minute visit, such visits will be ended, too. The changes to the contracts will benefit more than 500 home care workers, 9 out of 10 of whom are women. I met one yesterday, called Mary. When I talked to her about the difference the changes will make, she said, “It might not sound a lot for some people, but it means I can pay for my kids’ school lunches and make sure they have a decent hot meal in the evenings.” The changes will also benefit the 900 people whom the home care workers care for.

A Labour Government will back the actions of councils such as the Labour council in Islington. We will increase the fines for non-payment of the minimum wage to £50,000. We will champion the payment of the living wage through “make work pay” contracts, which give a tax break of up to £1,000 per worker to every company that signs up to the living wage. We will end the exploitative use of zero-hours contracts, too. As part of our £2.5 billion

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transformation fund, we will provide extra funding to support changes in the community and the services provided there, including 5,000 more home care workers.

I will end on a point that Islington council made. The changes cost the council more, but we have to think about the cost of not doing it: the cost to the NHS of avoidable emergency admissions and delayed discharges, and the cost to the taxpayer of people having to have their pay topped up when they want to be earning a decent living wage. There is a different way. Islington has shown the way. We will back its efforts and make sure we have a decent care system for those who work in it, those who use it, and all the families that rely on it.

10.48 am

The Minister of State, Department of Health (Norman Lamb): It is a pleasure to serve under your chairmanship, Mr Robertson. I congratulate the right hon. Member for Oxford East (Mr Smith) on securing this debate on an incredibly important subject. I agree with him and the hon. Member for Strangford (Jim Shannon) that there are many great providers of care out there and vast numbers of extraordinarily dedicated care workers. Like the shadow Minister, I went out with a domiciliary care worker in London a while ago. He was from Sardinia, which makes the point that very large numbers of people from other countries, primarily from across the European continent, work in our care system. Without them and the dedicated work of care workers, the system would not survive. We should remember that in our debates about the movement of workers around Europe. Our health and care system depends on those dedicated workers, and the man I saw from Sardinia was a very impressive and dedicated man. He was earning a low income and not being paid for travel time between the stops in his working day, which I totally agree is completely unacceptable and a disgrace. I will come back to that issue a little later.

It is also important that we celebrate great care. I went to the first ever awards ceremony in my county of Norfolk that celebrates examples of fantastic care, and to see care workers who hitherto have never been recognised for the amazing work that they do was inspiring. Every part of the country should have similar exercises to acknowledge and celebrate great care.

Secondly, I wanted to comment on the point made by the right hon. Member for Oxford East that sometimes—indeed, quite often—the only companionship that people receive is from the paid care worker who visits their home once or twice a day. Does that not say that there is something profoundly wrong about our society, and if so, do we not all have to recognise that that must change? I have said this before, but we have inadvertently become a rather neglectful society. As our extended families have been dispersed far and wide, often older people are left rather stranded, living on their own, sometimes many miles—often, indeed, hundreds of miles—away from their loved ones. It is not a good society in which the only people seen by those older people are those who are paid to deliver care to them. The wider community and neighbours need to play a part in addressing this massive challenge that we face, whoever is in Government. There is absolutely a role for the total professionalism of paid staff, but the wider community must play its role, too.

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There are amazing schemes such as the Cornwall pioneer project, in which volunteers work alongside GPs to combat people’s loneliness. There is also a brilliant community organisation called Friends and Neighbours in Sandwell, in the west midlands. That is a network in the poorest community in the west midlands, and yet volunteers give of themselves, and give companionship to people to give them their lives back. Those volunteers play a part in meeting this massive challenge we face.

Thirdly, part of the answer is for care workers to be far more embedded in joined-up and integrated teams of health and care workers. The work in Islington that the shadow Minister referred to is another of the brilliant and inspiring integrated care pioneer projects that join up health and care services and enable care workers to work alongside nurses, so that they recognise that they can possibly go on to become a nurse or a health care worker. Such projects give care workers a status and professionalism that they deserve, which can play an incredibly important part in this process.

Fourthly, I commend to right hon. and hon. Members an example from my county. The GP practice in the village of North Elmham, in the middle of Norfolk, has set up a social enterprise that provides domiciliary care to a widely dispersed rural area. As it is a social enterprise, it is able to pay its staff better. When staff stay and demonstrate reliability, they receive more pay. The consequence is that people know who their care worker is, there is continuity of care, and there is not, as the shadow Minister suggested is too often the case, a situation in which someone different turns up each night. I had a case—indeed, it involved Care UK—of an elderly lady finding a different man turning up each night to shower her, which was an assault on her dignity. The concept of locally based social enterprises, tied in closely to GP practices, seems to be an attractive way forward.

Fifthly, there is the issue of pay. To start with, I will say that Unison is right to campaign on pay; I support it in doing so, and I am very happy to work alongside it. The right hon. Member for Oxford East and others made the point that it appears that 220,000 people in the care sector are being paid below the minimum wage. That situation is completely unacceptable, and I hope that all of us in Westminster Hall today acknowledge that we find that practice to be totally unacceptable.

However, it was this Government who decided that Her Majesty’s Revenue and Customs should carry out a dedicated push in this sector to root out employers who are breaking the law in that respect. Indeed, I can confirm to the shadow Minister that I have specifically asked for a further dedicated focus on the care sector, because it is absolutely needed.

Liz Kendall: I am glad that that work is continuing. However, the Minister has said several times in the newspapers that care companies that do not pay the minimum wage should be named and shamed, and yet that has not happened. Why not?

Norman Lamb: I am grateful to the shadow Minister for raising that issue. When I was a Minister in the Department for Business, Innovation and Skills, I

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specifically pushed for a change in the rules to make it easier to name and shame poor employers. That process was not completed by the time I left BIS to go into the Department of Health, but I continue to push for it. Indeed, the rules were changed, so that whenever there is a notice of underpayment of the minimum wage, the employer is named.

There is a complication in the care sector, in that arrangements are often quite complex and reaching a final decision often requires an investigation to be carried out. However, I can assure right hon. and hon. Members that I anticipate the naming of poor companies within this sector in the relevantly near future. I totally support that process; there should be no hiding places for employers who break the law in that way.

Mr Andrew Smith: What we all want to hear is a commitment that HMRC will proactively go out, uproot and stop these illegal practices. The thought comes to my mind that in other sectors where the Government have been shown to be negligent in regulating areas of activity—such as investment, with Equitable Life and so on—the Government end up having to pay back the victims. Why do the Government not pay back all these care workers who have lost so much money because of the incompetence of HMRC?

Norman Lamb: I thank the right hon. Gentleman for that intervention. However, I repeat the point that it was this Government who arranged for that themed work in the care sector. A substantial sum of money was collected from employers who had broken the law and returned to their employees who had been underpaid. I repeat that I have requested that that themed work should start again. As he will understand, I do not have responsibility for HMRC. However, I have made that request and I will continue to push for that themed work to happen. Where it seems that there is clear evidence that a problem is endemic in a sector, we ought to be prepared to focus on it.

The hon. Member for Blaydon (Mr Anderson) talked about outsourcing. That problem did not start in 2010. Most of the outsourcing—the creation of a predominantly private sector work force—happened before 2010, and we all have to acknowledge that. It is an endemic and deep-rooted problem in the sector, which needs to be challenged effectively.

I will talk briefly about the care certificate, because another issue raised by right hon. and hon. Members is the fact that training standards are often inadequate. I must say that when I came into this job I was rather shocked to discover that there were no proper mechanisms for ensuring that employers were required to provide proper training for their staff. We are changing that situation. We commissioned Camilla Cavendish to produce a report on this issue, and we have now legislated through the Care Act 2014 for a care certificate, which will come into force next April. That certificate will set a national standard for minimum training and competence levels that every employer will have to meet. They will have to ensure that their staff either have the care certificate or something equivalent, and they will have to satisfy the Care Quality Commission that that is the case. If they cannot satisfy the CQC, it can take enforcement action against them. I am proud of the fact that we are taking decisive action to improve training standards.

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Hon. Members have also raised the issue of the role of the CQC. It has the power—and Ministers have the power to request it to use that power—to carry out themed inspections of local authorities where there is evidence that commissioning is falling short, resulting in poor care. Part of poor care can sometimes be the terms and conditions offered by employers. I am determined that, if evidence of poor practice emerges, we use those powers to ensure that local authorities, as well as providers, are held to account, in order to raise the standards in this sector. We all agree that that is necessary, and that the underpayment of wages to care workers is not an acceptable practice.

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Mobile Phone Companies (Ofcom Supervision)

11 am

Siobhain McDonagh (Mitcham and Morden) (Lab): I did not know that today was going to be such a big day for the mobile phone industry and its regulation. I want to address the issues of some of my constituents and the customer service that they have received from a number of providers.

The first case is that of Mr C of Mitcham, who contacted me on 17 May 2013—I am sorry, I will give many dates, but they are important. He described how EE was pursuing him for an outstanding telephone bill for the months of November and December 2012. Mr C had taken out two contracts with Orange in October 2010 in the understanding that both had unlimited landline calls. EE claimed that that was not the case and that he only had unlimited landline calls on one line, so for those two months he owed the company £1,341.99 for calls made to UK landlines.

Mr C was distressed by the situation and asked for my help on 17 May 2013. At that stage, EE had offered a discount of 25% as a good-will gesture, but it did not address Mr C’s central point that he was mis-sold the second line. I met with EE’s David Frank, senior public affairs manager, and Dan Perlet, director of corporate and financial affairs, on 11 June 2013 to discuss Mr C’s issue. As a result, I had a letter from EE, dated 26 June, in which it agreed to waive 75% of the outstanding amount. EE made it clear that if Mr C accepted the offer, both sides could consider the matter closed. Mr C accepted the offer and asked for a final invoice confirming the revised amount outstanding so that he could settle the account.

As I said, the dates are important. On 8 May 2013, nine days before Mr C came to see me and a month before I was buying Mr Frank and Mr Perlet of EE cappuccinos in Portcullis House, EE had issued a default notice against Mr C. Furthermore, on 29 November 2013 EE sold the full debt, without the agreed discount of 75%, to Lowell Group, a debt collecting agency. Again, that was done without Mr C’s knowledge.

When Lowell Group staff contacted Mr C early in 2014, he challenged them and explained that an arrangement had been made with the senior public affairs manager at EE. Lowell Group said that EE denied that any meeting between myself and its senior public affairs manager had ever taken place, even though I have a letter—which I can produce now—confirming the meeting and its outcome. I have been trying to contact EE by letter, e-mail and telephone since the beginning of the year. I was, however, unable to obtain a response until eventually, ahead of the debate, I got a reply dated 3 November.

This is a catalogue of poor communication and miscommunication. EE had not been transparent in its communication with Mr C, and placing a default notice against his name had implications that he was entitled to know about. Other credit providers are obliged to communicate such actions, but the first that Mr C knew of the notice was when he applied for a loan and the application was declined. EE had not communicated internally regarding the case. Whoever decided to sell the debt either ignored the agreed settlement arrangement

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or was unaware of its existence. EE had not communicated all the facts regarding the case to Lowell Group. In selling the full debt and in denying that its representatives had met with me, EE has misled the debt collectors and wasted their time. To cap it all, Mr C is still waiting for the final invoice confirming the reduced balance outstanding, so that he can settle the account and “consider the matter closed”, as stated in the letter from EE to me on 26 June 2013.

That all demonstrates a disregard for the well-being of a customer who has put his trust in a service provider—EE in this instance. The company’s attitude has been relentless and inflexible, with a cavalier disregard for the welfare of a customer who has felt bullied and intimidated for more than 18 months.

In its letter of 3 November 2014, EE apologised unreservedly. It has now called off the debt collection agency and cancelled the debt entirely. It will also take immediate steps to have the default notice removed, although that alone does not repair the damage to Mr C’s credit rating, since he has been declined a loan—which, in the first place, was because of the default notice. It should not have taken the intervention of an MP to resolve the situation.

My second constituency case is that of Ms O of Colliers Wood. Ms O made the mistake of tethering her mobile phone to her new tablet in early July 2014. Her August phone bill showed nothing particularly unusual, but she was hit by a staggering bill of £540 in September. Once aware of it, she was able to avoid a similarly exorbitant bill in October, although it was still £289. As soon as Ms O was aware that a large bill was due in September, after she checked her bill online, she made repeated attempts to speak with someone at Vodafone for advice. Each of the five people she spoke to between 27 August and 9 September, whether in store or over the phone, either referred her to another department or gave her conflicting advice.

As someone who always pays her bill on time, Ms O was concerned about the financial burden of having to pay the whole amount in one go. She wanted to discuss the possibility of remission of some of the bill and the option to pay in instalments. The customer service staff whom she spoke to in the early stages were not entirely helpful. When Ms O asked for an e-mail address for her to contact, she was told to write and post a letter—that was by a mobile phone company!

Not satisfied with the response, Ms O investigated the Vodafone website and was able to deduce the name and e-mail address of the chief executive officer of Vodafone UK—he must have been delighted. She sent him an e-mail on 15 September 2014 and, following her success in contacting the CEO’s office directly, she was more successful in negotiating a partial resolution. Through further dialogue, a “bill shock” reduction of 10% of the data charge, or £70, was agreed, with a further reduction of £106 as a good-will gesture. Ms O’s persistence therefore paid off in the end, but it took just that, persistence, as well as ingenuity and investigation to get through to the right people— people who had authority to make decisions.

That is another example of a large service provider being elusive and difficult to communicate with. Although Vodafone has a variety of ways for customers to track

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data usage, they mainly depend on the proactivity of the customer. I believe, however, that a mobile phone service provider has a responsibility to support customers in managing their accounts.

The third resident of my constituency to approach me, just last week, was Mr B from Morden. He is an Orange customer and frequently calls overseas using a facility offered by Lycatel, whereby he may call a UK landline number from his mobile phone to gain access to an international line. He called Orange to upgrade his contract to an unlimited calls package. When he mentioned the reason for upgrading to the Orange customer service agent, she advised him that Orange monitors the use of such landline numbers and that if it discovers that he is using one of them it will charge more than 30p per minute for calls.

Mr B contacted me because that contradicts the terms of his contract, which states that he has unlimited calls to UK mobiles and landlines. He is worried that he will end up with a huge bill if or when Orange discovers he is using the services of Lycatel. That does not seem to be a fair, open or transparent way for Orange to behave. In fact, it seems underhand.

Given those cases, I want industry standards monitored by Ofcom whereby a requirement is placed on mobile phone companies to be open and transparent with customers. They should behave reasonably in line with regulated credit providers, which are bound to inform customers about action being taken that may affect their credit rating before it happens. They should alert customers if there is unusual activity on their account, similarly to how banks monitor and notify customers of unusual activity.

I would like to see mobile phone companies acting responsibly and in the interests of their customers by offering recommendations about cheaper tariffs based on past and recent usage. That service is already offered to customers by some energy providers. There are examples of best practice in the industry. Will the Minister request that Ofcom be given the authority to ensure that those examples are made universal and to recommend industry standards that will work in the interests of all customers, however able they are to be detectives and look at what their mobile phone companies are doing to them?

11.10 am

The Minister for Culture and the Digital Economy (Mr Edward Vaizey): It is a pleasure to serve under your chairmanship, Mr Robertson. I thank the hon. Member for Mitcham and Morden (Siobhain McDonagh) for bringing this issue to my attention and the attention of the House. Today is not a good day for EE or Vodafone. I will not mention Orange, because it was swallowed up by EE. I am sorry to hear about the huge amount of time that she has had to spend on these constituency cases, and I am very sorry to hear what her constituents have gone through. She put her case incredibly forcefully, and Anne Robinson should be looking over her shoulder in case her job is under threat from the hon. Lady. As a consumer champion and a constituents’ champion, she is second to none.

It is disappointing to hear of occasions when our constituents receive poor service from organisations. I believe—as, I am sure, does the hon. Lady—that providing excellent customer service is one of the hallmarks of an

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effective, efficient and competitive company. Goodness knows the amount of hours that we spend in this day and age listening to those terrible recorded automated voices when we yearn to speak to someone with a real voice giving us a common-sense answer to our problems. I cannot believe that most companies do not realise how important that is.

Be that as it may, we are talking specifically about mobile phone companies, what the experiences of the hon. Lady’s constituents say about how such companies deal with their customers, and the vulnerability of customers when things go wrong. Obviously I cannot comment on the specific details of the cases that she talked about, although I am familiar with the outline from her speech and from her briefing to my Department. I hope that she takes this in the spirit in which it is intended, but neither my Department nor the independent regulator, Ofcom, has the remit to investigate and resolve individual complaints. As she pointed out, the mobile network operator EE, which is involved in the dispute with her constituent, has—clearly because of this debate—written to her to confirm that it has withdrawn her constituent’s debt entirely and cancelled any debt recovery action.

The debate gives us an opportunity to discuss general points, as the hon. Lady indicated at the end of her speech. I will make some general points on when someone is sold the wrong contract or when contract terms are not clear, what happens when a customer complains to a mobile network operator, and Ofcom’s role in all this. I have made it clear that it is not within Ofcom’s remit to take up individual complaints about poor service from MNOs. Ofcom monitors complaint volumes, publishes quarterly statistics reports to compare and contrast the customer service of different MNOs, and takes action to enforce its complaints handling rules where necessary. Publishing complaints data is a key part of the work to provide useful comparative information for consumers and to drive improvements in the quality of service.

I am pleased to tell the hon. Lady that Ofcom is talking to mobile network providers, including the three major ones—EE, O2 and Vodafone—to understand in more detail how their customer service practices work, and I hope that that will result in improvements across the board in the standards of customer service. Already she has made progress, not just on behalf of her constituent, but on behalf of many others.

All communications providers must be members of an Ofcom-approved alternative dispute resolution scheme. There are two schemes, and providers must make it clear that customers have recourse to those schemes if they need them. Providers must, however, also make it straightforward for their customers to make and escalate a complaint with a mobile network operating company. Companies must have in place and follow complaints procedures that they publicise in their written and online material. If a customer makes a complaint that is unresolved eight weeks after they first make it, or if there has been deadlock and the provider has said that it will not do anything further about the complaint, it can be referred to the ADR scheme to which the provider belongs. I would expect every MNO to resolve complaints in a speedy and prompt fashion, and I am happy to put that on the record.

Alternative dispute resolution is a powerful piece of consumer protection that works. Figures show that it often works for the consumer’s benefit. It allows customers

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to take unresolved complaints to an independent body to reach an impartial judgement. The provider has to accept this decision, although the customer does not. It is still open to a customer who believes they have been dealt with wrongly by a service provider to take legal action to seek compensation. ADR does not close off that route, should they choose to use it. Legal action is for many consumers very much a last resort, and often it is difficult for them to follow that path. There is also a mechanism by which a customer who is not satisfied with how a case has been conducted by the ADR ombudsman can have the process by which the ombudsman reached their findings examined independently. Ofcom monitors evidence of compliance with complaints handling rules, and takes enforcement action where necessary to ensure that providers are dealing with customer complaints appropriately and fairly.

I want to cover the mis-selling of services, which is when a customer thinks they have signed a contract for one thing and the MNO claims they have signed up for something else. In 2009, Ofcom introduced a range of measures to combat the mis-selling of mobile services, which included clear requirements about obtaining the consumer’s permission and consent, and specifying the type of information that must be made available at the point of sale. Ofcom monitors and enforces compliance with the rules. That has led to positive results, with an initial sharp reduction in complaint numbers to Ofcom from an average of 600 complaints a month to just over 100 a month. That is still far too many, but the reduction has been sustained ever since the rules were introduced.

Ofcom’s rules on contracts are addressed under general condition 9 of the general conditions of entitlement, which is a regime of rules under which telecoms companies must operate in the UK. It is important for companies to have contracts: they offer certainty about revenue streams and allow companies to offer better value to customers. However, customers must be completely clear from the start of their contracts what terms they are signing up to, and that includes price rises, the minimum length of their commitment to the contract and how they can switch providers, if that is what they want to do. General condition 9.6 provides consumer protection in case the contract is varied while it is running. Under that condition, the telecoms provider must tell the customer that it is changing the contract—normally, that is a price rise—because it is likely to cause material detriment. It must give the customer the right to leave the contract without any penalty in response.

In general, it is Ofcom’s role to ensure that the telecoms market and services work well for citizens and consumers. Looking at the more optimistic side of the picture, competition is delivering a wide choice of competitive tariffs in communications markets. Ofcom works to ensure that consumers are able to take advantage of competition and choice, for example by ensuring that they have clear and accurate information to compare services and can switch providers easily when they want to. Ofcom continues to monitor the market, including compliance with regulatory obligations, price trends and complaints handling. It remains focused on ensuring that consumers can exercise choice to access the best deals.

I was horrified to hear what happened to the hon. Lady’s constituent who was referred to a debt recovery firm. Any reference to a debt collection agency is worrying.

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When a consumer disputes a bill, having the outstanding amount referred to debt collectors can be extremely upsetting. A service provider, like any other company, is of course entitled to go after money that it thinks is owed, but we would expect it to take the dispute into consideration before taking any action. If someone finds that they have been referred to a debt collection agency during a dispute with a mobile network operator, it is important that they continue to follow the complaints procedure, but they should also contact the agency straight away to explain what has happened. That may allow more time for the dispute to be resolved before further action is taken.

The Steering Committee on Reciprocity, with input from the Information Commissioner’s Office, has issued technical guidance to creditors on the conditions under which information about defaults is filed with credit reference agencies. The ICO advises lenders not to file defaults until the consumer has been in arrears for at least three months. The guidance also states that the customer should be given notice of an intention to file a default through a final demand letter. It seems that that was not the case for the hon. Lady’s constituent, which is pretty poor. Customers should also be given a relevant account statement, which should make clear not only the intention to file, but the date of the intended default. The date should allow the customer enough time to respond properly. If the customer fully meets the terms set out in a notice of intention to file a default, the lender should not file the default. Debt collectors must be licensed by the Financial Conduct Authority, a condition of which is that they must obey the FCA’s guidance. Citizens Advice can also advise on problems with debt collectors.

When dealing with large organisations, which may have hundreds of thousands or millions of customers, things may go wrong on occasion. We all live in the real world and will adopt a common-sense approach. I completely agree with the hon. Lady’s bringing the matter to the attention of the House, because what differentiates good companies from those that merely do their job is whether they can deal with mistakes to the satisfaction of their customers. It is appalling that a mobile phone company’s customer should have to turn

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to their Member of Parliament to resolve a dispute. It is essential for customer growth and prosperity that they retain and grow the good will of consumers.

I understand that EE has resolved its dispute with the hon. Lady’s constituent, but I am pleased to tell her that EE has informed my officials that it is reviewing its internal procedures, unilaterally, to see what lessons can be learned from her constituent’s recent complaint. We do not have any plans to legislate in this area.

Siobhain McDonagh: I thank the Minister for his generous response. The debt has now been cancelled and the default notice on my constituent’s credit file may have been removed, but its history is still present and it continues to prevent him from taking out the loan that he needs. I do not know whether the loan is for a business or a home, but even though the matter is now over for EE it is not over for him.

Mr Vaizey: The hon. Lady makes a good case. Many hon. Members have experience of constituents having a black mark, as it were, against their credit rating, which, for example, could be due to their bank not putting through a direct debit, so we need to consider the issue to ensure that the hon. Lady’s constituent’s credit rating is restored to its full capacity. I will personally intervene with EE to ensure that it puts its best people on the case and liaises with the hon. Lady’s constituent to make certain that every effort is made to show that he did not bring this debt upon himself and that this black mark is not down to his own actions.

In conclusion, the hon. Lady began her remarks by saying that this is a big day for the mobile operators. We are indeed consulting on whether to introduce national roaming. We have a good system of mobile networks in this country. We have good coverage and are introducing 4G coverage at the fastest rate in the world with the fastest take-up in the world. We have a competitive, keenly priced environment, with people quickly adopting new technology through mobile operators. There are key issues, however, that mobile operators must continue to address. One is customer service and the other is coverage, particularly in rural areas. I look forward to discussing such issues with them. I thank the hon. Lady once again for bringing the matter to the House’s attention.

11.25 am

Sitting suspended.

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Dairy Industry

[Mrs Linda Riordan in the Chair]

2.30 pm

Simon Hart (Carmarthen West and South Pembrokeshire) (Con): I welcome the Minister to Westminster Hall for the third time in two days. He must be getting used to the warm welcome.

The debate is about one of the most important industries in the UK, the dairy industry, which affects every household in the land. Someone said to me recently, “If we’re lucky, we might need a doctor, an accountant or a lawyer once or twice a year, but we need a farmer three times a day.” That is the background to the debate. The industry has a huge impact on the local economy of constituencies around the land and the health of the industry has a far deeper effect than simply on agriculture. For example, the dairy industry has a huge knock-on effect on the tourism industry in my part of the world in west Wales. The whole UK landscape, in particular in our part of Wales, is heavily and positively influenced by the contribution of dairy farmers and other livestock farmers, often at their own expense.

Agriculture may be a devolved issue—the Minister will come to that—but world markets are not, nor is the role of the groceries code adjudicator or the dairy code of practice. The problem is a UK one, not simply a devolved matter for the Welsh Government. We bring the debate to Westminster Hall this afternoon on behalf of the dairy industry—our friends, our colleagues, our constituents who derive their living from it, our members of the Farmers Union of Wales, the National Farmers Union, the CLA or Country Land and Business Association and Farmers for Action, and many others, some of whom are not members of any union.

Fluctuating prices, tensions between farmers and processors, and criticism of retailers, especially supermarkets, are nothing new in agriculture, but I do not want the debate simply to be a long list of complaints. That is not the purpose of the exercise. We need to understand what is going on in the world market and the relationship between farmers and processors, which has been raised in the House and outside Parliament on many occasions.

Bill Wiggin (North Herefordshire) (Con): My hon. Friend is quite right, and I am looking forward to the rest of his speech, but four pints of milk for 89p cannot be right. Something surely needs to be done.

Simon Hart: I will be coming to that in due course, but it is particularly galling for a producer to see that kind of offer in some retailers.

I also want to go into the role and powers of the groceries code adjudicator and the voluntary code of practice, which is subject to a review at the moment—or I think it is—and into the role of Government, if indeed they have a role at all, which I believe they do. What is completely unsustainable for the dairy industry, however, is the long-term prospect of having to sell its product for less than the cost of generating it in the first place, and the extraordinarily short notice that some producers get of significant price changes, about which they can do nothing but sit back and take the pain.

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Nia Griffith (Llanelli) (Lab): Does the hon. Gentleman agree that that is the very reason why we need the voluntary code to be strengthened—so that farmers cannot be shocked by sudden price drops by big purchasers? Will he ask the Minister to look again at the voluntary code and at making something much stronger?

Simon Hart: I thank the hon. Lady, who is a near neighbour. Yes, I will be making that point. The code and the adjudicator have been in place long enough now for some positive benefit to have been felt. The farming community has not yet convinced me, however, that the powers of the code and the adjudicator have been exercised as satisfactorily as they might have been.

Roger Williams (Brecon and Radnorshire) (LD): Does my hon. Friend agree that it is intolerable that producers have to give the buyers of their milk more notice about a customer change than the buyer of the milk has to give about a change in price?

Simon Hart: My hon. Friend makes a good point. Of course that is right, and it is why we need to look at the relationship between producer and processor and between processor and retailer.

My third point, which I was getting to, is that added confusion is provided by the fact that there are so many different contracts for so many different things, written in so many different ways, making it difficult to find any body of farmers of any significant number who have a consistent contractual relationship.

Neil Parish (Tiverton and Honiton) (Con): It is absolutely right for my hon. Friend to be having this debate. British dairy products and milk are the best in the world, and we need to promote them more. The dairy farmers are paying some £7 million a year in levy, but the money is not getting out there to promote milk properly. Milk, cheese, yoghurt and all other dairy products need to be promoted more. We need to get the money out to the industry to get milk promoted.

Simon Hart: I thank my hon. Friend for his intervention, but I might press on now and not take quite so many interventions, because I will cover many of the points that are being made. I fully accept, however, that people will wish to write their press releases soon, so I will try to be as generous as I can.

The industry recognises that overproduction is a problem and affects price. That is a given. The industry also recognises reduced demand as a result of changing buying habits in China and of Russian sanctions. As a consequence, we are in for what one newspaper described as a long period of low prices, without any indication of what those low prices might bottom out at or of how long is “long”. Analysts are already pointing to considerable uncertainty.

There are those, although not—I am glad to say—many of them, who think that all of that can be dealt with through efficiencies in farmers’ production methods. As we have touched on, however, the short notice that people get about their milk prices cannot necessarily be offset by instant cost reduction measures or alterations to milk production methods. Some such alterations might take one, two, three or even more years to take effect, while the price reduction has an instant effect, so that is a simplistic way of addressing the problem.

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An additional problem, which I suspect many Members who represent more isolated parts of the UK feel, is that there are limits to the diversification programmes that farmers can enter into. It is not always possible for people to open a suite of holiday units or a farm shop, because they might be two or three miles off the beaten track, have significant planning problems to overcome or be on a tenanted holding, the landlord of which may have a different view of the sort of developments that can be undertaken.

Guy Opperman (Hexham) (Con): I congratulate my hon. Friend on securing the debate. I represent the county with the smallest population, where the point that he is making is particularly apposite. Does he agree that it is utterly important for the Government to provide better guidance on how our co-operatives and producers can come together to get a better contractual relationship with the people who are buying their milk?

Simon Hart: I thank my hon. Friend for a contribution that I will add to my list of questions for the Minister. He has put his finger right on a problem that particularly affects the more isolated parts of rural Britain.

That all leads conveniently to the issue of supermarkets. The milk price public battleground always centres on the role of retailers, in particular the better known ones. Some 50% of British milk is not traded globally. We talk about global influences, but we must not forget that the other 50% of our milk is not traded globally and that its price is a straightforward consequence of the relationship between UK-based retailers and the processors. The retailers cannot escape criticism by blaming it on the Chinese or the Russians. A lot of the price is about straightforward UK contractual arrangements between two important parts of the chain.

What can the Government and the processors do? There are some long-term proposals and ideas. They are nothing new, and no one in the Chamber will be unaware of them. We must—this is an easy expression to use—continue to strive for and identify new markets. Of course—that is stating the bleeding obvious, some people might say. It cannot be done in a hurry, and it cannot necessarily be done by Government alone; it has to be done by a combination of processors and Government. Identifying and exploiting new markets is of course critical, but it will not solve the problem facing my constituents in the next few weeks.

Ms Margaret Ritchie (South Down) (SDLP): I congratulate the hon. Gentleman on securing this vital debate on dairy prices. Is he aware that the Dairy Council in Northern Ireland, which is an offshoot of the UK Dairy Council, has been awarded two EU contracts for the export of milk and cheese from Northern Ireland to third-country markets including south-east Asia? Does he agree that that will be a good stimulus to the local economy and will help with milk prices in a world in which they, like beef prices, are slightly depressed?

Simon Hart: The hon. Lady’s contribution is timely. One advantage of debates such as this is that we can bring to the attention of the public and decision makers examples of where things are working and ideas for best

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practice. I suspect that that anecdote will resonate with the Minister, and I hope he will deal with it specifically when he sums up.

The hon. Lady might be interested in my next point, which is about accessing more EU funding to promote dairy products. Again, that is slightly simplistic and will have to be a long-term goal, but I suspect that as a nation we are not accessing those funds quite as effectively as we might be for the dairy industry.

My third point, which is another long-term project, is that there should be greater collaboration between farmers. Even in my part of west Wales I speak to numerous dairy producers, all of whom, it seems, have some slightly differing arrangement with their processors. Having quite so many variations on a theme when it comes to marketing a product does not make for a particularly cohesive industry with real marketing clout.

Tessa Munt (Wells) (LD): Will my hon. Friend give way?

Simon Hart: I am not getting on too well with not taking interventions, am I? I will give up, so I happily give way.

Tessa Munt: I thank my hon. Friend for his generosity. When farmers are asked to open their accounts prior to the arrangement of their contracts, it is no surprise that they are laid bare to the vagaries in behaviour of the people with whom they sign contracts to sell their milk. If they have to expose every single tiny bit of profit, of course the contracts will be screwed right down to the deck.

Simon Hart: My hon. Friend is referring to the cost of production and the guarantee element of contracts between certain producers and supermarkets—I am trying not to name them. That is a unique feature. I am not aware of any other industry that has to expose its accounts to quite that degree of scrutiny. That of course means that the particular customer can set a price that is so marginally advantageous to the producer as to hamper their sustainability. In reality, that arrangement is not as good as it looks or sounds. Perhaps the supermarkets in question, which champion the arrangement and use it as a public relations tool, might emerge from the shadows after the debate and tell us whether they think it is an honourable and moral way forward.

Mr Mark Williams (Ceredigion) (LD): Returning to the issue of producer organisations and what we could almost call collective bargaining between producers and retailers, does my hon. Friend think there is merit in the example of the Scottish Government, who are funding an organisation called Dairy Farmers Together to develop collective agreements between the diverse types of farms that he has mentioned, so that their bargaining power is increased?

Simon Hart: The short answer is yes. This is a matter of the sustainability and the long-term health and vigour of the dairy industry, which at the moment is facing yet another crisis. I take on board my hon. Friend’s comments, and I will cheerfully pass the buck to the Minister so that we can hear what he has to say about that idea.

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Before I sum up, I want to talk about a couple of short-term proposals that could have an instant and positive effect if the Government implemented them. The first is continued improvement of food labelling and procurement policies in the UK. Despite commitment after commitment and promise after promise over a long period, we are probably not where any of us would like to be with procurement and labelling policies. I hope the Minister will concede that we could do better. I know that is his own ambition and an ambition of the Government—I suspect it is an Opposition ambition as well—but there has never been a better time to stop talking and start delivering on procurement and labelling.

The Government should press ahead with implementing the Macdonald review and deregulation. Regulation is simply an added cost to farmers and there are not necessarily any positive benefits. There is layer upon layer of regulation, so the more we can strip away, without compromising food safety or animal welfare, the better.

The Government should continue with measures on the difficult and often controversial issue that we discussed in this Chamber only yesterday, namely wiping out bovine tuberculosis. TB still casts a huge cloud over the dairy farming industry in a few parts of the world, particularly west Wales. I do not want to make a cheap political shot, as that is something that hon. Members will know I am not prone to do, but one or two Members were in here yesterday shedding what seemed to be crocodile tears for the dairy industry over an issue that affects relatively few—albeit a significant few—dairy farmers. Where are those Members today? If they are that committed to the dairy industry, why are they not here today to talk about a subject that affects every dairy farmer and every household? I suspect I know the answer, which is that they are not the slightest bit concerned about dairy farmers; they are concerned about badgers. I do not mind that, but they should at least be honest about it.

Julian Sturdy (York Outer) (Con): I congratulate my hon. Friend on securing a really important debate for our dairy industry. He is absolutely right to focus on short-term measures, which he has set out articulately. Does he agree that we also have to tackle the long-term problems? In the UK dairy industry, those problems stem from the fact that over half the milk produced goes into the fresh liquid market. The Government can help by allowing farmers to diversify into other schemes. I know that it is not always easy, and that some producers and farms do not have the capability, but we have to tackle the problem: we are over-supplying the fresh milk market.

Simon Hart: That point is accepted by the farming unions, but as my hon. Friend rightly points out, offsetting those difficulties through diversification schemes is often easier said than done. The uncertainty of the future of dairy farming gives rise to the issue of whether farmers can obtain the necessary funding to enter diversification schemes or more adventurous marketing schemes on the back of a dangerously fluctuating short-term horizon. However, I take on board his well made point.

Some solutions have been put forward by the retailers themselves, so there are silver linings to one or two clouds that we have referred to. To cite ideas from one

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particular retailer—I am trying to avoid naming individual companies, so that I am not bombarded with rebuttals and the like when I leave the Chamber—those solutions include working with processors to create greater transparency in the supply chain, and enabling farmers to see how prices are set in order to create better trust within the supply chain. That is a new way of working that has not been seen before in the industry, and it will create benefits for farmers, consumers and the industry. For example, the price paid to farmers will be worked out every three months, based on a rolling average of indexed butter and milk powder prices. Those commodity prices are publicly quoted, and in each case there is a futures market, allowing farmers to look ahead and hedge or protect themselves against price movements. That will allow dairy farmers better to predict milk prices and plan accordingly.

That idea comes from an e-mail from somebody who took the trouble to contact me recently. However, if I may use a rather clumsy analogy, it aligns what we are discussing with the principle of a fixed-term mortgage. If the industry is prepared to enter into an arrangement in which it can play the futures market, we can have contracts that are perhaps fixed for a longer period. If contracts can be fixed both between retailer and processor and between processor and farmer, we will be able to look at one-year or two-year contracts, or perhaps—maybe I am being over-optimistic—even further ahead than that.

Yes, of course, there are risks. There are risks to each person in the chain, but surely we can inject a degree of certainly into the industry to eliminate the risks and the downside from which people are suffering, which affects not just farmers, but everyone who relies on farmers in some shape or form.

It is a promising way forward if the retailers are beginning to recognise that there is a need for a transparent contract system based on being able to look ahead and take an average price over a future period. There would then at least be recognition that we are looking at the end of the unacceptable practice of simply sending a text message to a producer to downscale their milk price in two or three weeks.

Andrew George (St Ives) (LD): I assure the hon. Gentleman that there is no press release attached to my intervention. He has got to the nub of a constructive proposal, but at present the groceries code adjudicator is limited in what she can do. Improving the adjudicator’s powers and the code would enhance the solution that the hon. Gentleman is constructively proposing: a direct relationship between the retailer and the producer of the goods coming into the supermarkets.

Simon Hart: The hon. Gentleman plays nicely into the completion of my contribution. I want to quote from a farmer in my constituency, not a particularly large farmer and certainly not a militant one, but someone who has worked hard on his holding for a long time and reinvested every penny in his business:

“The important bit, and the message which we are struggling to get across, is the”

groceries code adjudicator

“needs to use her powers to investigate the relationship between the Retailers & the Processors. If the Adjudicator would look at the paper trail between the likes of”

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x and y,

“she would find millions of pounds, which could result in a minimum of 3p per litre back to the producer. This would turn the job round immediately as it would go to the nonaligned producers. If this was followed up & she had the guts, it would open up the biggest can of worms ever in the dairy industry. The problem is the Retailers & Processors will fight this all the way because it's their extra profit that is cleverly hidden.”

That sounds provocative and it was written with passion, but it highlights a belief and a feeling that is probably replicated throughout the UK dairy industry. We now have an opportunity to correct that, thanks, dare I say it, to the price crisis that most farmers are experiencing. We have a chance to correct it with Government, retailer and processor action, and through greater awareness and willingness to accommodate changes from the producers.

I hope that other hon. Members will produce their own anecdotes and views, so that the Minister can form a view that he can put to us at the end of the debate and that will, above all, encourage all those who are struggling, but on whom we rely to secure a longer-term sustainable business for the benefit of UK agriculture.

Several hon. Members rose

Mrs Linda Riordan(in the Chair): Order. Because of the number of Members wishing to speak, with the authority of the Chairman of Ways and Means, I am imposing a time limit of five minutes on speeches. I remind Members that interventions should be short. Depending on how many Members wish to speak, I may later reduce the time limit.

2.53 pm

Jonathan Edwards (Carmarthen East and Dinefwr) (PC): Diolch, Mrs Riordan. It is a pleasure to serve under your chairmanship. I start by congratulating the hon. Member for Carmarthen West and South Pembrokeshire (Simon Hart) on securing this debate. I associate myself with many of his comments.

The Welsh dairy industry contributes about 10% of the milk produced in the UK, and Carmarthenshire is one of the places in Europe most ideally suited to producing milk, due to the plentiful resources of fresh grass. However, the long-term trends in the industry have not been particularly good. Since 1999, the number of dairy producers in Wales has fallen by 51.3%.

Recently, the price of milk has fallen below 27p a litre, with the cost of production being higher than that. First Milk has announced that it will cut its prices even further in December. In the Baltic states, the price of milk is down to 13p a litre; that shows the fall in milk prices throughout the EU and the world. Milk is a highly nutritious product and a vital component of any healthy diet, but in the supermarkets it is cheaper than water, so something is going wrong somewhere.

During the recess, I visited a local farm, Bremenda Uchaf at Llanarthney, in the middle of the Towy valley, with the Farmers Union of Wales to discuss the emerging situation in the dairy industry. As I said recently during Welsh questions, the most recent crisis has been caused by two main factors: another supermarket price war, in which dairy foods and milk in particular bear the brunt

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as they are gateway products; and reprisal Russian sanctions on EU food products. President Putin introduced a one-year ban in August, and CNN reported that it is worth £1.5 billion to the EU dairy sector. Demand for milk and other products, such as beef, has fallen significantly and over-supply in domestic and EU markets has depressed prices. I read in

The Guardian

today that the situation in the eastern part of Ukraine is still highly volatile, so the sanctions may remain in place.

Guto Bebb (Aberconwy) (Con): On the impact of sanctions from Russia, does the hon. Gentleman believe that the Government should act in the same way as the Polish Government, for example, who have encouraged people there to eat apples to stand up to Putin? Should we not encourage people to eat Welsh cheese to stand up to Putin?

Jonathan Edwards: I would certainly encourage people in Wales to eat Welsh cheese and to drink as much Welsh milk as possible. My daughter is on a pint a day, so I am doing my bit for the cause.

The industry also faces other long-term challenges, in particular the end of milk quotas next year. Competitors in Ireland are preparing for this by increasing milk production, and unless there are strategies in place to help Welsh farmers, we could have a long period of milk price instability. I fear that there is a lack of political direction at Welsh Government level. In a recent evidence session of the Welsh Affairs Committee, the new Secretary of State for Environment, Food and Rural Affairs seemed to indicate to me that the current difficulties were likely to be short-term. I invite her to reconsider her position and to put in place interventionist measures to help the industry before we face another serious crisis, like the one we faced a few years ago.

I want to list a series of interventions that are needed, from the Department but primarily from the Welsh Government. We must ensure that all that can be done is done, and that no one in the supply chain is using the current downward price trend as a convenient excuse to make additional cuts to farm-gate prices. We need retailers who use milk as a loss leader to ensure that they fund those deals from their own profit margins and not from the pockets of farmers. It is vital that those retailers put transparent pricing mechanisms in place and ensure that suppliers are compliant with the voluntary code.

Put simply, milk being sold cheaply devalues the product in the eyes of consumers, and this could have long-term negative ramifications for the sector as a whole. It is extremely worrying to every dairy farmer to see milk being used as a battleground between retailers.

Mr Mark Williams: Before the hon. Gentleman continues his list of remedies for the problem, does he agree that a particular problem, which I am witnessing in Ceredigion, as I am sure he is in Carmarthenshire, is the inability of new entrants to join the industry? What we are experiencing is hardly an advertisement for people to invest in family farms and to keep them going, but it is essential to the fabric of rural Wales.

Jonathan Edwards: That point is especially pertinent to the dairy industry, because entering the market requires a huge investment in milk parlours, and without long-term stability, the investment is too high a risk.

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Plaid Cymru has called for the voluntary dairy code to be made compulsory to protect the interests of dairy farmers. This is the first big test since the voluntary code came into being following the 2012 milk crisis. If the voluntary approach fails, we will need to move to a statutory code. Competence for that lies with the Welsh Government, and I would like the relevant Welsh Minister publicly to declare her willingness to intervene if necessary.

Plaid Cymru has long campaigned to change EU procurement rules to allow sub-state Governments to strengthen domestic supply chains. We have succeeded in achieving that, but the Labour Government in Wales have not taken advantage of it. They could use the rural development programme, but they are not doing so.

I would also like the Welsh Labour Government to consider creating a dedicated promotion body for Welsh dairy produce, like Hybu Cig Cymru, which promotes Welsh red meat. Given that global demand for dairy is likely to increase, and that one reason for the current difficulties is the loss of Russian markets as a result of sanctions, the dairy sector needs a dedicated body to look for new and emerging markets. While I am on this issue, I would like to ask the Minister to look at the red meat levy, which is paid when animals are slaughtered. Hybu Cig Cymru loses out on an estimated £1 million a year because the levy is collected where the animal is slaughtered. Many animals from Wales cross the border, and that money is lost to Wales and the Welsh farming industry.

Mr Gregory Campbell (East Londonderry) (DUP): Just before the hon. Gentleman moves away from that point, on the issue of the UK-wide promotion of the dairy industry, does he agree that what we would like to see—and should see—is the UK Government actively promoting our dairy industries across the United Kingdom internationally to try to counteract the problems, and particularly what is happening in Putin’s Russia?

Jonathan Edwards: The hon. Gentleman makes a valid intervention. There are huge opportunities in developing markets across the world that we should be hoping to access.

Returning to the Welsh levy, there is an issue of fairness here. The previous Minister, the hon. Member for Somerton and Frome (Mr Heath), promised to reform the system, and I am glad to see him in his place today. We need the UK Government to act to ensure that Welsh farmers and our promotion agencies receive the appropriate levy for Welsh produce. If a similar levy was introduced for the dairy sector, this issue would be even more pertinent, because the vast majority of Welsh milk is processed outside our country, regrettably. It is a brilliant food source that we should be doing everything at all political levels to support. Diolch yn fawr.

3.1 pm

Miss Anne McIntosh (Thirsk and Malton) (Con): I welcome you to the Chair, Mrs Riordan, and the Minister to his place, and I congratulate my hon. Friend the Member for Carmarthen West and South Pembrokeshire (Simon Hart) on securing this timely debate. Many dairy farmers in my area are tenant farmers, and they have been acutely affected by the downturn in price. They form the social fabric of the hills and are an integral part of the uplands.

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My hon. Friend referred to the groceries code and the adjudicator; it is a commonly held belief that the groceries code applies to the dairy industry, but I point out to him that it does not. The Select Committee on Environment, Food and Rural Affairs is launching an inquiry at the end of the month, and we are asking for evidence, because there are those who would like to see the remit extended and a review of the remit. It is generally accepted that the groceries code has been working well, and that the adjudicator, created under the last Government but brought in by the present Government, is a great asset, and I absolutely accept that it must apply to the dairy chain. The Government, in their defence, will probably say that a change would open the sluice gates to other products, but I believe that there is a common interest in the Chamber today in such a change.

Tessa Munt: Might that be something one could refer to the Competition and Markets Authority, instead of trying to use powers that are not within the remit of the groceries code adjudicator?

Miss McIntosh: I beg to disagree with my hon. Friend; I believe that the groceries code adjudicator should extend to dairy farmers, but I would go further: I believe that there is a role for the Office of Fair Trading in reviewing increased collaboration on pricing and marketing, and on the whole agreement between farmers.

On a Select Committee visit to Denmark—I will declare an interest: I am half-Danish and very proud of that—we were hugely impressed by the amount of exports and marketing opportunities that there have been through its co-operative movement. Arla was one of the first and most successful dairy co-operatives, and we understand that there are now 1,000 producers in this country under Arla. I yield to no one in my admiration of British and north Yorkshire farmers, particularly those who work on the land in my area. They are fiercely independent and fiercely proud of their tradition, but we must do more to help them co-operate and understand that, if state-aid rules are not deemed to be broken in Denmark, we could apply the same collaboration and co-operative movement in this country.

On exports, my hon. Friend the Member for Carmarthen West and South Pembrokeshire set the scene well. We saw a 3p increase in price about two or three years ago, which was very welcome. We have now seen at least a 1p—and potentially up to a 2p or 3p—decrease. I understand that that is partly because of the global situation, partly because of Russian sanctions and partly because of the milk powder scenario in China, but every time the price goes up, people flock to milk production. We then get a glut of milk and two or three years later, the price goes down. There is a circular situation, and if we are not careful, we will have, at some stage in the long term, a potential food security issue.

Another hon. Friend set the scene for me to say that 40% of leftover liquid milk is used for butter and cheese. We produce Shepherds Purse and Wensleydale cheese in north Yorkshire, and Cheddar cheese is world-renowned. Liquid milk and milk products generally are some of the most nutritious products available. We should be doing more not only to generate growth in this country for this market, which is very popular, but to ensure that we are exporting as much as we possibly can.