HC Deb 09 February 1978 vol 943 cc1812-22

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

10.0 p.m.

Mr. Jack Ashley (Stoke-on-Trent, South)

The scandal of sweated labour—never eliminated in Britain—is quietly hidden behind the faded curtains of the poor, whose homes are their sweat-shops. These prisoners of poverty are mainly women with young children, disabled people or immigrants. They are the under-privileged of our society who should be generously assisted, whereas they are ruthlessly exploited.

It has been estimated that there are at least 250,000 such people, although the statistical information is inadequate and the real figure may be much higher. They are part of a growing problem which bedevils not only Britain but Western Europe. It has been claimed in the European Parliament that the problem of homeworkers has reached alarming proportions in all countries. Great concern has been expressed about the political, social and human consequences that will follow if we fail to deal with the problem.

In Britain, we have to face the unpleasant fact that thousands of our home-workers are deliberately downtrodden. Earnings vary considerably, but rates of pay have been described by the TUC as "astonishingly low". In some cases, the actual rates paid are a national disgrace reflecting both the frightening vulnerability of homeworkers and the shameless determination of some employers to exploit them.

I have here two wage packets, both from women workers who have been folding income tax returns notices and inserting tax change notifications. They reckon that it takes at least an hour to do 1,000. One of them received £6.65 for 25 hours' work. The other received £2.95 for 12 hours' work. That is a rate of about 25p an hour, which would just about buy a loaf of bread—but no butter, margarine or even dripping. Yet the firm concerned receives £1.92 for each 1,000 forms from Her Majesty's Stationery Office. The Minister can draw his own conclusions about the morality of those figures, but I put it to him that this is a practice which cannot be condoned and which requires immediate Government action.

An even more glaring case has been brought to my attention by a home-worker living in Devon. I have her letter here. She makes gloves, and her rate of pay is 10p an hour, which is reminiscent of the cool system abroad which we used to deplore so self-righteously.

One of the basic reasons for the vulnerability of homeworkers is their status as self-employed. They are thereby denied the benefits of the Employment Protection Act and other legislation. A few tribunals have decided that individual homeworkers are to be deemed employees for the purpose of the Employment Protection Act, but this case by case approach is both confusing and unsatisfactory. One woman who wrote to me—a homeworker in footwear—said that, although a tribunal had decided that she was an employee of the company, she issue may be subject to an appeal. She was therefore in some considerable doubt as to whether she would be protected or not.

The basic requirement, therefore, is for a new statute which classifies all home-workers as employees so that they can secure the legislative protection accorded to workers in industry. They would then benefit from the Employment Protection Act, Redundancy Payments Act, Contracts of Employment Act and Trade Union and Labour Relations Act.

Some homeworkers have a degree of protection from the Wages Council Act, but only 25,000 out of the estimated 250,000 are covered. Even so, the inspectorate is woefully inadequate because in 1975, only 3,440 out of these 25,000 homeworkers had their wages examined—and in 1976 the number had actually fallen to 1,134. The meshes of a very loose net are allowing bigger sharks to slip through.

A further weakness is that if employers infringe wages council regulations the maximum fine is a mere £100. This means that employers can flout the regulations with only the risk of a financial slap on the wrist. It is therefore not surprising that thousands of pounds have been filched from homeworkers by crooked employers in recent years. Far heavier maximum penalties are necessary to deter employers from disregarding wages council regulations, with fines of £500 for each offence.

Employers in specified trades have an obligation, under the Factories Act 1961, to send lists of their homeworkers to local authorities twice a year. This is of little value since the list of trades is a restricted one and in any case local authorities do not publish their lists. Perhaps this is because many employers do not bother to notify them of the lists.

The Health and Safety Commission is currently considering proposals for new registration provisions and it is important that effective methods should be devised and implemented.

I believe that a duty should be imposed on all employers to notify local authorities. the Department of Employment and trade unions of full lists of all their homeworkers, rates of pay, the materials they use and the type of jobs allocated. These lists should also be open to inspection by homeworkers themselves.

It will ultimately be the homeworkers themselves who will transform their own standards, but they will need all the assistance they can get. Already the TUC has acted with a powerful, well documented report which will be very influential. Various individual trade unions have been making bold efforts to organise homeworkers and I am particularly glad that my own union, the General and Municipal Workers Union, has played such an active role—one which has been fuelled by the enthusiasm of one of its officials, Mrs. Helen Eadie.

I think all of them would want to express appreciation to the pioneering work of the Low Pay Unit and the London Homeworking Campaign. Together they have dug out much valuable evidence.

However, all of these efforts must be supplemented by strong Government action. I know that the Under-Secretary has been actively concerned about these problems for some time and I should like to pay tribute to his work—although the pace at which he can move on this complex issue is probably not as fast as the one at which he would wish to go. I know that he has been looking abroad at the way other countries deal with homeworkers, and I personally believe we have a lot to learn from the Germans, although obviously we could not simply graft their legislation on to ours.

Nevertheless, comprehensive Government action is needed and I want to suggest the following 10-point plan as a basis of a charter for homeworkers.

First, a special Select Committee should be set up to investigate the wages and conditions of all homeworkers, and to make recommendations for their improvements. Secondly, a minimum rate of pay for all homeworkers should be statu torily established, and it should be linked to the index of average wage rates. Thirdly, the numbers of homeworkers should be established by the Office of Population Census and Surveys. Fourthly, a standing committee of Government, TUC and CBI should be established to scrutinise and evaluate the wages and conditions of homeworkers.

Fifthly, the Government should make legal provision for all homeworkers to be classified as "employees" so that they benefit from the legislative provisions made for factory workers. Sixthly, all employers should be required to provide Government, local authorities, trade unions and homeworkers themselves with rates of pay and types of job. Seventhly, special inspectors, should be appointed by the Health and Safety Commission to ensure that the provisions of the Health and Safety at Work, etc. Act are consistently applied to all homeworkers. Eightly, a special group of wages council inspectors, specialising in homeworkers, conditions, should be appointed to investigate the problems of homeworkers. Ninthly, a permanent working party of Department of Employment, Department of Health and Social Security and home-workers themselves be set up to keep under continuous review the relationship between rates of pay of homeworkers and matters of social security, because they are all interlinked. Tenth, that a special training scheme be established for home-workers to assist them to find more skilled employment.

I appreciate that this plan cannot be implemented overnight and that many difficulties will have to be overcome by the Government. Nevertheless, I know that my hon. Friend the Under-Secretary will give it careful consideration, and I hope that the Government will act as speedily and comprehensively as possible.

10.14 p.m.

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

I am grateful to my hon. Friend the Member for Stoke-on-Trent, South (Mr. Ashley) for drawing attention to this serious problem, and for the thoughtful way in which he has dealt with it. There need be no doubt that we are 100 per cent. together in our concern to ensure that home-workers should not be exploited. We should have reached the end of the era of cheap, sweated labour.

I am grateful for what my hon. Friend said about me. I hope that he will not think me churlish if I say that I am a little ahead of him, although I regard him as valuable and vigorous ally. Although I do not rule it out, I do not think that I want to see a committee of inquiry, as my hon. Friend suggests, into home working. I think that it might add to our knowledge of the problem. There are considerable gaps, but that knowledge is steadily, if slowly, increasing. What I want now is action rather than words. The first steps have been taken.

My hon. Friend the Member for Stoke on Trent, South rightly said that I cannot move too fast. In particular, I cannot move until I have received the two reports of the inquiries conducted by ACAS into two particular industries with a high incidence of home working. I have already had the first of those reports, on button manufacturing, and I expect the second, on toy manufacturing, quite soon. But I am not waiting for those reports before I get down to serious discussion.

A week ago I received the TUC statement on home working that my hon. Friend mentioned. It contained valuable proposals and information. I have already written to Len Murray, the TUC general secretary, to indicate that I welcome early talks on the basis of that document.

I have also arranged for an analysis of overseas practice in this field, and because of the relevance of health and safety requirements I have asked the Chairman of the Health and Safety Commission to discuss with me what might be done to speed up consideration by the commission of that aspect. There are real problems to overcome. I remind my hon. Friend that in a foreword to the TUC statement Mr. Murray pointed out that the problem had been with us for over a century but little has been done to remedy it". I do not think that it is unfair to suggest that there is now more recognition of the problem, not least by me but also in my Department generally, and more activity on this front than there has been probably since 1910 when the first trade boards—predecessors of the wages councils—were set up to combat sweated labour in industries which were predominantly those in which outworking and subcontracting work were common.

Since then successive Governments, the trade unions and employers have all largely ignored the problems except for the development of the wages council system, which has taken in a good many homeworkers. It may well be that the very protection given in that way has tended to obscure the needs of those still outside wages councils in a whole miscellany of trades.

The way that the problem has been overlooked is underlined again by the statement of the TUC accepting that one of the major difficulties in tackling the problem is the complete lack of information on the subject. During the passage of the Employment Protection Bill a general inquiry by ACAS into home working was considered. But ACAS did not see an overall inquiry of this kind as just an industrial relations matter. Instead, in late 1976, ACAS was asked by the Government to consider specifically toy and button manufacturing.

The report on button manufacturing does not help very much, but I understand that in toy manufacturing the ACAS investigators have managed to interview a considerable number of homewkorkers. That is no easy achievement. I hope that this report will come up with useful evidence.

It is worth while remembering that the general policy of successive Governments has been to work towards the replacement of statutory wage regulation by voluntary arrangements but always to keep the wages councils where their continued existence was necessary. Therefore, it is appropriate that the TUC proposes a number of courses of action for trade unions on homeworking as well as some sort of legal protection.

Trade unions have been understandably cool towards homeworkers because they take work out of the factory, they are a potential, if not an actual, source of cheap labour and are notoriously difficult to organise. The experience of the General and Municipal Workers Union in Torrington, referred to in the TUC report, which I very much applaud—incidentally, may I join with my hon. Friend in paying a tribute to the work of Mrs. Eadie—shows that, given the will on both sides, something can be done.

That brings me to a brief mention of the income tax forms raised by my hon. Friend tonight and on an earlier occasion. The procedure followed by Departments for many years is to get an undertaking that a contractor has complied with the requirements of the Fair Wages Resolution for at least the previous three months before putting the contractor on the list of firms who may be invited to tender for Government contracts. When a contract is awarded, the terms of the resolution are incorporated in the contract. There is then a contractual obligation to observe the requirements of the resolution. In the particular case of the two firms on Her Majesty's Stationery Office contracts, both are on the Stationery Office list of approved contractors and have signed declarations that they observe the Fair Wages Resolution. Their current contracts contain the resolution and now a claim is being made under that resolution on behalf of these homeworkers by the General and Municipal Workers Union which has some members among those home-workers. Claims under the Fair Wages Resolution are not too common, so my Department has advised the union about the making of the claim and has offered advice about the finer points of the Fair Wages Resolution. The claim will test whether there has been a breach of the Fair Wages Resolution provisions and, if there has been, it will be dealt with. I am very pleased that we have been able to help in that way.

As I said, I shall be discussing the TUC document with the TUC, and sooner than later, because it contains, as well as the proposals I mentioned as regards the trade unions, a number of proposals for Government action. These are primarily the enforcement of the Health and Safety at Work, etc. Act, the strengthening of the Wages Inspectorate, giving home-workers employee status and giving them some form of legal protection on pay. I shall say a few words on each of those subjects in that order.

I am satisfied that the current legislation is generally adequate to deal with any hazards faced by these workers and that the enforcing authorities, principally at present the Factory Inspectorate, have sufficient powers to deal with any breaches of the law or with any danger ous situations which come to their attention. I am not, however, satisfied with the current arrangements for bringing hazards to the notice of the authorities. The major problem that we face in this area is inadequate information. At present, we simply do not know how many homeworkers exist, the nature of their work, or the hazards involved. The need for change is not to improve the legislation which protects homeworkers—because that is satisfactory—but to detect any breaches so that the legislation can be enforced and to acquire sufficient information to identify problem areas.

At present, under the Factories Act, anyone giving out work in a number of specified trades has to send lists of home-workers to local authorities twice a year. This requirement is not well observed and no longer provides an adequate source of information. The list of trades covered has not been significantly changed for more then 60 years and no longer reflects accurately the sort of work currently put out to homeworkers. It was these problems that the Health and Safety Commission considered in its consultative document published in 1976.

The commission's proposals in that document were generally welcomed, although differences of view emerged on a number of issues, especially over the routine provision of names and addresses and over access to those names and addresses by bodies like the trade unions and local authorities for reasons not connected directly with health and safety. These problems are not proving easy to resolve, partly because conflicting arguments are put forward on the merits of the issues and partly because of some legal complexities which have yet to be unravelled.

But the commission has these issues under consideration, and I think that it is right to await its proposals before deciding what action to take. But, as I said, we want to deal with this matter without undue delay.

Secondly, it is often put to me that the Wages Inspectorate is under-staffed. I think that it is and, although I do not accept that more inspection would solve all the problems of low pay in wages councils trades, I have always acknowledged that more wages inspectors are needed, especially if we intend to ask the inspectorate to undertake more investigations into homeworkers' earnings. I am currently arguing for an increase in the Wages Inspectorate, not for the first time. There are public expenditure constraints here. There can be no huge increase, but there has already been some additional help. The Manpower Services Commission took over the responsibility for enforcing the disablement quota regulations from the Wages Inspectorate in January 1977, and this released some inspectors for wages council work. Additional staff have been authorised for implementing Section 95 of the Employment Protection Act where the inspectorate sends questionnaires to employers so that wages inspectors' visits are directed to establishments where they are most needed.

My hon. Friend referred to the reduction in inspections, especially in 1976. I have already explained this to him in reply to a parliamentary Question. Briefly, the reasons are connected with the blitz which our inspectorate carried out in selective trades and, in the main, in trades where home working was not very much involved. That is the explanation for the drop in figures.

I now want to say a word on protection and status. There are no easy answers to how homeworkers can be given protection. Declaring that all home workers should be treated as employees would conflict with the common law of contract. Again, I have not time to deal with this now. It is an extremely complex matter. The discussions that I intend to have with the TUC and other interested organisations should clarify the need for legislation in this area. Certainly I am not ruling out anything. The TUC states that there is a strong argument that homeworkers generally should have some form of legal minimum terms and conditions of employment.

I have also mentioned overseas practice in this field. We are looking particularly at West Germany and there is a good deal of information on the position in Italy, Japan and France. We are analysing that information to see what we can gain from it.

We shall want to discuss all this not only with the TUC but with the trade unions most closely concerned. The co-operation of trade unions is essential, with or without any form of legal protection for homeworkers, first, because the greater the extent to which homeworkers are included in collective agreements the less will be the need for coverage by a statutory system, and, secondly, because I shall need to look to trade unions to represent homeworkers on whatever form of wage fixing is arranged.

My hon. Friend raised the question of statistics on homeworking. I understand that the information obtained from the 1971 census does not distinguish the type of homeworkers we are talking about from other workers who work at home. but the suggestion that information could be obtained from the 1981 census is under consideration.

I shall certainly look carefully at all my hon. Friend's suggestions, many of which, as I am sure he knows, relate closely to those of the TUC. I hope that I have said enough in the short time available to me to demonstrate the Government's concern and my concern, because of my responsibilities for the area of low pay, for what is certainly a very live issue and one on which we, like my hon. Friend. are genuinely anxious to make progress.

Question put and agreed to.

Adjourned accordingly at twenty-seven minutes past Ten o'clock.

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