HC Deb 11 January 1977 vol 923 cc1395-406

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Shape.]

10.35 p.m.

Mr. Bruce George (Walsall, South)

Since being elected to the House in February 1974 I have been concerned about the plight of the low paid. Regrettably, a considerable army of men and women fall into this category. In a previous Adjournment debate I had the opportunity of raising the problems of low pay in the hotel and catering industry. I am pleased to say that, after three months of submitting my name every week to Mr. Speaker, I have been fortunate enough to secure this Adjournment debate and am able to raise the subject of low pay in the contract cleaning industry.

I am pleased that it is my hon. Friend the Under-Secretary of State for Employment who is responding for the Government tonight, because I am well aware of his long-standing and deep sympathy with the lower-paid worker.

My involvement with the problems of the contract cleaning industry stems directly from a letter passed to me last summer by the Secretary of the Walsall and District Trades Council, a Mr. Bill Fisher. The letter was written by Mr. Cooke, Secretary of the Walsall No. 4 (Gas) Branch of the General and Municipal Workers' Union.

I can do no better than read the letter. Mr. Cooke stated: Recently I have enrolled six female cleaners at Walsall Gas depot in Prince Street, Pleck. They do not work directly for West Midlands Gas but are employed by MCC Office Cleaning, Cleveland Street, Wolverhampton … who sub-contract to West Midlands Gas. Inquiries have revealed that they are paid £5.85 per week for 12½ hours, giving an hourly rate of 46.8p. This compares very unfavourably with what West Midlands Gas would pay for office cleaners, which is 81.525p per hour and would give these ladies £10.19 per week. As a trade unionist I am not willing to stand by and see cut price labour used within our industry and I have already reported this matter to my own union. Added to this they have only recently received their first pay rise in two years, which was £0.80 per week. I would be very much obliged if you would pass this information to Mr. Bruce George, MP. Ultimately I received partial satisfaction from West Midlands Gas, but I began further researches. I have tabled a number of Parliamentary Questions, written dozens of letters, held a public meeting for cleaners in the West Midlands area—the meeting was attended by over 150 cleaners employed by contract cleaning companies—and I have liaised with those whose concern predates mine, namely, trade unionists and the Low Paid Unit.

I have been particularly fortunate in securing the co-operation of the Low Paid Unit, to whose work I am happy to pay tribute. The Minister will be pleased to know that the Low Paid Unit will shortly be producing another report on the contract cleaning industry. That report, when published in a few weeks' time, will add greatly to the literature on the subject of the contract cleaning industry. Up to the present we have the report published in 1971 of the National Board for Prices and Incomes "Pay and Conditions in the Contract Cleaning Trade", and the incomes data study entitled "Cleaners' Pay", published in 1974. There is little else. I believe that the new report will shed a great deal of light on the plight of the estimated 100,000 cleaners—mostly female, and mostly part-time—who work in the contract cleaning industry.

The contract cleaning industry is large and has expanded considerably in the last decade. Its turnover is in excess of £155 million a year. There are some giant companies, but the majority of companies employ fewer than 50 women, many of whom work part-time and do short stints of about three hours per day either early in the morning or late in the evening.

Many establishments, which formerly employed cleaning staff directly, now hire contract cleaning companies—presumably to save costs. Indubitably, the pay and working conditions of those employed in the contract cleaning industry are inferior to those enjoyed by workers who are directly employed by companies employing their own cleaners. That is borne out by the research which has been done so far.

It is dangerous to generalise. There are many good contract cleaning companies which pay reasonable wages. But my researches reveal that many companies do not pay reasonable wages, and this I deplore.

The incomes data study and the NBPI were unhappy about conditions of employment in the industry. They were not satisfied with holidays and holiday pay. In many cases none was given. They were not satisfied with the sick pay provision. In many cases there was little provision for sick pay.

We must remember that women in this industry work in uncongenial surroundings, often in cold premises in which the central heating has been turned off. Night workers might be locked in the premises. These women work unsocial hours. In many cases their family life suffers. One wonders why these women are prepared to work for the pittance that they receive. In times of high unemployment there is an incentive for these women to remain in work, even though the wage rates are low. These women are working not for pin money but because they may be single parents or desperately need to supplement their husbands' low incomes. Therefore, in most cases these women have to work even though conditions of work are poor and wages are low. So far, protection against unfair dismissal has not applied to them because most of them do not work the minimum number of hours required under the legislation. Thankfully, that will change.

There are some disagreements about pay. Exact figures for pay are difficult to come by, because companies naturally, in a fiercely competitive industry, are not forthcoming in revealing how much they pay their workers.

The NPBI report noted: There are pockets of low pay, mainly associated with certain regions, and night workers in particular are poorly paid … But it cannot be said this is a low paid trade as a whole". I disagree. This concept of pockets of low pay was reinforced this morning on the radio by the secretary of the Contract Cleaning and Maintenance Association, who said that the rate of pay in the provinces was between 70p and 80p per hour. That will cause howls of derision and anguish from the 150 women who attended my public meeting, because most of them are earning between 45p and 60p per hour. The majority earn less than 56p per hour and 20 per cent. of them earn 50p per hour or less.

I shall quote a few examples from evidence I have been given of companies which are paying less than 60p per hour. These emanate from the West Midlands. They are ISC Cleaners, King Pin Contract Cleaners, Cleaners Contractors Ltd., Midland Contract Cleaners, Cleanswift, MIC, Ofliclean, Commercial Cleaning Services, and many more. These are examples of companies which to my mind are paying poverty wages.

It may be that the Contract Cleaning and Maintenance Association believes that the rates are higher, but I have incontrovertible evidence from the women who attended my meeting and from others throughout the country who have written over 100 letters to me that this complacent attitude of there being pockets of low pay in the contract cleaning industry is open to criticism.

I have here a letter from several ladies—written on official notepaper which had probably allen to the floor—saying: I am writing to you on behalf of the cleaners of —a well-known bank in my constituency— concerning your recent letter in the Press. We work for a certain company We do 15 hours a week and receive £6.50 a week. That works out at 43p per hour. Out of this we pay 80p per week bus fare. Hoping you will look into this matter for us". If that major bank, whose profits are in tens of millions of pounds a year, is aware that women clean its offices for 43p an hour, it should be ashamed.

Another bank in my constituency is also involved in the issue. I quote from a letter: I and three other cleaners work at this bank and we are seeking your advice on how to get a rise. Our bank wage is £7.50 per week, which is 50p per hour. We have asked for a rise about three months ago but we are no further about it". The letter then names the bank and states that cleaners have to pay £1.40 a week in fares.

Another constituent writes: I am writing this letter on behalf of my wife, who is afraid of dismissal if she writes it. The letter names the company and continues: There are eight other cleaners and one supervisor … the wife and the other cleaners get £7 a week or 56p an hour. I could continue at length. Another letter states that cleaners' current income is £8.50 per week, paid fortnightly. The letter states: The working week is 15 hours so at fractionally over 56p per hour it is well below the standard you say is desired. A request for a rise on this paltry amount usually brings first vague promises of near future rises and then abuse on the lines that more money will be paid when the standard of work is improved. The promises therefore never become an accomplished fact. The ladies simply back down under the threat of mass sackings. The glaring inconsistency in the attitude of the contractor is that the management do not complain about the efficiency of the work done. On the contrary they seem quite pleased with the cleaners. I have, of course, omitted names of companies, but I shall supply them to the Minister.

There are many examples of low pay, not only in the Black Country but in the whole of the West Midlands. If proper research were conducted it would reveal more than pockets of low pay and many instances throughout the country. If public corporations, banks, newspapers and other respected organisations were aware that they indirectly employed slave labour—I use that phrase advisedly—I hope that they would be prepared to renegotiate these contracts or no longer to employ cleaning companies which pay such low wages.

Low pay is not illegal. These companies are doing nothing illegal, but they are acting in a morally reprehensible manner and give a bad name to those paying reasonable wages.

Any contract cleaning company that is prepared to pay low wages will, because of the unemployment situation, hopelessly undercut a reputable company when tendering.

What can be done? The Government have attempted to put their own house in order where they employ cleaners directly. Where they employ indirectly, they have inserted a fair wages clause in contracts. The Minister for the Civil Service seems to be satisfied with the situation, accord- ing to a Written Answer to me. He said: I have, however, no reason to believe that contractors employed to clean Government offices are not observing the minimum rate of pay clause now included in the contract."—[Official Report, 26th October, 1976; Vol. 918, c. 185.] Despite that assurance I am attracted to the idea, put forward by Jim Skinner in a Fabian research pamphlet, of a survey within the Civil Service Department to monitor pay levels and vet contracts to ensure that they comply with legal requirements.

I am not satisfied with the response that I received from certain public corporations. I have evidence of indirectly-employed cleaners receiving less than 55p an hour in public corporation offices—of course indirectly employed—and getting a wage rate much less than their sisters who are directly employed by that public corporation.

The public corporations may have a fair wages clause in contracts that they negotiate, but I have lots of evidence to show that this fair wage clause, in very many cases, merely adorns the contract. It is not enforced. There may be a fair wages clause but there is a lot of evidence to show that it is simply not observed. There is no follow-up.

I was told by one senior officer of a public corporation in the West Midlands: Whilst there is legislation or directives to this effect for Government premises, there is no similar provision for non-Government premises. He went on to say, Even though a fair wage clause is included in contracts, the corporation is not bound to do this. I hope that the Minister will invite the chairmen of public corporations and other public bodies to employ the same standards that the Government employ in relation to cleaners either directly employed or, more importantly in this respect, indirectly employed. This would give a very good lead to the private sector.

Indeed, I have heard complacency expressed about the contract cleaning companies employed by local authorities. I have evidence of contract cleaning companies being employed by a local authority at a rate just over half that paid to cleaners directly employed by that local authority. Thus the cleaners who clean the civic centre of the town in question receive a wage rate of just under £1 an hour but those who happen to clean a block of fiats owned by the local authority are getting infinitely less.

Looking at the private sector, I hope that a number of developments will combine to remedy the situation that I have been describing. I hope that the trade unions—the National Union of General and Municipal Workers, the Transport and General Workers' Union, the National Union of Public Employees and the Civil Service union—will be able to make a much bigger impact in this industry than hitherto they have been able to do.

The problems of unionisation are immense. The vast majority of the workers are women, who are not as susceptible as males to trade union blandishments and desires to join. The work force is scattered, with perhaps two or three people per site. One must not forget that there are some employers who still exhibit hostility to trade union membership. As I have said, these women are subject to instant dismissal and they have no recourse, up to the present, to the industrial relations tribunals for unfair dismissal.

I hope that the unions will be able to make a bigger impact. Research has shown that women who are members of a trade union are better paid than those who are not. I am pleased that the follow-up to my public meeting in December by the National Union of General and Municipal Workers has had a lot of success.

Secondly, I hope that the Contract Cleaning and Maintenance Association will get its members to agree to a minimum rate for the job. However, one must remember, in fairness to them, the difficulties of companies that are not members of the association.

Thirdly, I hope that Schedule 11 to the Employment Protection Act will be used to the advantage of the low paid. I shall be interested to hear what the Minister has to say about that schedule.

I should like to hear the Minister's analysis of the impact of the Equal Pay Act and the sex discrimination legislation. I hope that the Minister knows, as I know, of the cases in which women cleaners have received less from recent pay legislation than they should have received.

However, surely the solution does not rest entirely with legislation alone or in direct action by cleaners or the action of trade unions. Surely it rests in a great deal of persuasion and co-operation. I am proud of what the Government have done in relation to the low paid. I hope that these low-paid women, who definitely exist in my interpretation and in the analysis of the Low Pay Unit, working within the contract cleaning industry will hear something this evening or in the near future that will give them some hope. These are the low paid and the neglected sector of the work force. I hope that their plight will be recognised by the Government and that there will be some action. When I meet my constituents and those who have written to me, I hope that I shall be able to offer them considerable hope for the future.

10.55 p.m.

The Under-Secretary of State for Employment (Mr. John Grant)

The House will need no reminding from me of the continued interest which my hon. Friend the Member for Walsall, South (Mr. George) has shown in the question of low pay and the situation of those who work in what are traditionally regarded as low-paying industries. I have listened with great interest to the points which he has made.

The findings of the National Board for Prices and Incomes and its recommendations are important because they have had a decisive influence on the shape of subsequent developments. I hope, therefore, that my hon. Friend will bear with me while I refer to some of the more salient of those conclusions and recommendations.

The report found that the hourly earnings of the vast majority of contract cleaners were comparable with the earnings of manual workers generally, taking men and women separately. Though there were problems of low pay, and holiday provisions and fringe benefits were on the whole poor, the report concluded that contract cleaning could not be said to be a low-paid trade as a whole. An important point was that if weekly earnings were low it was because working hours were short rather than because hourly earnings were low by standards found elsewhere.

I understand that in a radio interview this morning my hon. Friend said that far too many workers in the contract cleaning industry are receiving poverty wages, by which I understand he means less than 55p an hour. I should like to set this in perspective if I may. The New Earnings Survey for April 1975 gives information about the earnings of part-time cleaners and shows that women working slightly less than 20 hours a week were receiving £14.80 a week on average. This is equivalent to an hourly rate of nearly 75p. This compares with average hourly earnings for all part-time women manual workers of about 77p an hour. Ninety per cent. of all part-time cleaners were receiving more than 52p an hour.

I would add that these figures cover both directly-employed and contract cleaners; separate earnings information for contract ceaners alone is not available from the NES. Nevertheless, these figures tend to suggest that one of the main conclusions of the NBPI study in 1971 still stands, namely, that contract cleaning is not a low-paid trade, taken as a whole. It is clear, however, from the impressive evidence which my hon. Friend gave that there is a problem here which is glossed over, and even some conflict of evidence. No one would deny that pockets of low pay exist in this country, that less than a decent living wage is sometimes paid and that this situation should be swiftly eliminated wherever it exists. My hon. Friends seems to have uncovered a sizeable pocket in his area, to put it mildly.

There are means available for resolving some of these difficulties—in particular the means of seeking redress under Schedule 11 to the Employment Protection Act, available from the beginning of this year. Nevertheless, the most important factor in improving the overall situation lies in the achievement of more effective and more widespread collective bargaining arrangements for the industry as a whole. Despite the difficulties, I hope that progress can be made in this direction.

The NBPI concluded that the contract cleaning industry taken as a whole was not low paid but that there was a case for developing a closer relationship between both sides of industry to settle pay and conditions.

Officials of my Department initiated talks between both sides of the industry as recommended, but it was concluded that there was little scope for real progress until the unions had improved their membership within the industry. Nevertheless, discussions continued and departmental officials chaired meetings between some of the larger employers in the trade and the unions concerned. I am sure that the talking is not over yet, but one of the major themes which emerged in the talks was the rôle of the Government as a major user of contract cleaning services. In this connection the Government introduced in April 1975 special clauses in contracts for the cleaning of Government offices which require successful contractors to pay wages and to grant holidays with pay to their employees at rates no less favourable than those agreed for local authority staff engaged on similar work.

The rate of pay of local authority manual workers which employers of contract cleaners working in Government offices have agreed to observe is £36 for a 40-hour week, equivalent to an hourly rate of 90p. It has now gone up to £38.50 a week, equivalent to an hourly rate of 96p. I am sure my hon. Friend will agree that that is an important step in the right direction.

As my hon. Friend has pointed out, workers in the contract cleaning industry enjoy some measure of protection from the Fair Wages Resolution. The resolution in its present form was passed by the House of Commons in 1946 and is incorporated in all contracts for the supply of goods and services to Government Departments. The Government have also encouraged local authorities and nationalised industries to include a fair wages clause in their contracts.

The Fair Wages Resolution provides that contractors should pay rates of wages and observe hours and conditions of labour not less favourable than those established for the industry—that is to say, the employer should observe any terms and conditions of employment laid down in a national or district collective agreement for his industry. If there are no such established rates, the contractor must observe terms and conditions of employment not less favourable than the general level observed by other employers whose general circumstances in the trade or industry are similar. All this applies to contractors for Government Departments.

While most other public authorities also incorporate a fair wages clause in their contracts, the provisions are not always identical, and need not be identical, to those laid down in the resolution passed by this House. In particular, some authorities have their own machinery for resolving complaints and do not make provision for the Secretary of State to refer cases to the Central Arbitration Committee.

I would now like to turn to two of the points raised by my hon. Friend. He is quite right to criticise public authorities which, in spite of advice from the Government, have not put a fair wages clause in their contracts with cleaning companies. If it were not for the existence of a new legislative provision, this is a matter which I would want to investigate thoroughly. However, in Schedule 11 to the Employment Protection Act the Government have now given to everyone the rights that were previously enjoyed only by those working on contracts containing a fair wages clause. Schedule 11, which was brought into force on 1st January this year, will give to all workers protection very similar to that contained in the Fair Wages Resolution, with similar mechanism for dealing with complaints. Workers in the contract cleaning industry need no longer depend for this protection on the existence of a fair wages clause in their company's contract, and, of course, the provisions of the schedule are available to those whose companies work for the private sector as well as for companies holding contracts with public authorities. I have already mentioned the rates which must be paid to those carrying out contract cleaning in Government offices, and I think that the use of Schedule 11 will represent a considerable step forward for workers in the industry. Indeed, it was for the benefit of groups of generally low-paid workers that Schedule 11 was brought into force, in spite of the opposition of the official Opposition.

Having spoken about the operation of the Fair Wages Resolution and Schedule 11, I ought to add a footnote about their purpose. These provisions cannot provide those in the contract cleaning industry with a mechanism which will allow them to obtain a general uplift of pay for the industry. Their purpose is to catch the employer who is paying less than the general level in the industry—to deal with pockets of low pay within an industry. The purpose is therefore limited. Nevertheless, I am sure that there is scope for workers in the industry, and their trade unions, to make considerable use of Schedule 11 and the Fair Wages Resolution to deal with the worst cases of exploitation which undoubtedly occur.

I would not wish to give the impression that the Government are complacent about the low paid. Indeed, nothing could be further from the truth. Only today I expressed my alarm at the findings of the low pay blitz that we have carried out in certain wages councils. One of our major preoccupations has been to adopt measures which will help not only those who are low paid but all those on low incomes.

My hon. Friend the Member for Walsall, South has made a number of detailed suggestions, and in the few moments now left to me I cannot deal with them in detail. I can, however, promise to give careful consideration to the specific points he has raised about the inclusion and monitoring of fair wages clauses in contracts entered into by nationalised industries, local authorities and other public bodies. I shall be interested to receive any further informamation that my hon. Friend may want to pass on to me.

This debates has provided a valuable opportunity to explore some of the problems of low pay in a particular industry, and I am grateful to my hon. Friend for initiating and pursuing the matter in his usual courteous and helpful way.

Question put and agreed to.

Adjourned accordingly at five minutes past Eleven o'clock.