§ Mr. Jonathan Shaw (Chatham and Aylesford)The purpose of securing a debate on the employment conditions of construction workers is to add oxygen to the efforts and discussions that were kickstarted by my right hon. Friend the Deputy Prime Minister when he commissioned the Egan inquiry two years ago. He has demonstrated his concern about this group of workers, which arises principally from the appalling safety record within the industry. That record is getting worse and worse. It is an outrage that there has been a rise of 22 per cent. in fatalities in 1999 and the figure for 2000 is likely to be even higher. Thirty builders have died on sites in the first four months of this year alone.
The Health and Safety Executive needs to take a tougher line. Of the 41 successful prosecutions involving fatalities in 1999, the average fine was just over £15,500. That amounts to crumbs when we are talking about people's lives and contractors are dealing with multi-million pound awards. Only two of the fines imposed last year amounted to six figure sums and 11 prosecutions for breaches of safety regulation resulted in fines of less than £1,000. The HSE has shown that it is prepared to take a tougher line, but not often enough. A clear warning needs to be sent to the industry. The HSE must tell it to wake up because it kills and maims its workers. It must stress that breaches of safety regulation will not be tolerated and will incur serious penalties.
It would be completely wrong to assume that this appalling safety record somehow operates in isolation to an otherwise trouble-free industry. The safety record is a symptom, a manifestation of fundamental and structural problems in the way that workers are employed. I shall argue that, if we tackle the employment conditions, not only will we begin to see a downward trend in the fatalities and serious accidents, but we will begin to address other areas of concern. We will see improved productivity, and we will be better placed to attract people into the industry and to encourage higher-quality workmanship.
The importance of bringing about employment changes in the industry was emphasised by the Prime Minister's announcement last week that the Government would double public capital investment. That was a welcome announcement for all involved in the construction industry. If we are to maximise that investment, we need a skilled, safe and secure work force. Skilled many of them are, yet safe and secure within their jobs many are not. Increased capital investment will provide great opportunities. However, while we want the new bypasses, new rail infrastructure, improved schools and new hospitals, we do not want our construction workers to end up as patients inside them because of inadequate safety measures on the site.
In our White Paper "Fairness at Work", the Prime Minister spoke of steering a course between the absence of minimum standards of protection at the workplace and a return to the laws of the past. He said in the foreword:
There will be no going back. The days of strikes without ballots. mass picketing, closed shops and secondary action are over. But it cannot be just to deny British citizens basic canons of fairness—rights to claim unfair dismissal, rights against discrimination for making a free choice of being a union member.189WH I spoke on Second Reading of the Bill that became the Employment Relations Act 1999. That legislation was deeply opposed by the Tories, but many of us believed that it heralded a new era in industrial relations—an end to "hire and fire". Combined with the working time directive, it was to bring greater security to the workplace, encourage partnership and ultimately increase productivity. The Act has made a great difference for many people yet, for construction workers, there has sadly been little improvement. The safety record of that industry alone highlights the need for a new culture of partnership and rights.A recent report from the IMC emphasised the productivity gap in the UK. In the construction industry, we will not close that gap, nor fill the skill shortages, if we do not recognise the need for important changes to the way in which it employs people. We will not encourage young people into an industry with such an appalling safety record and variable employment conditions. The central issue surrounding conditions of employment is that of bogus self-employment—a system that enables contractors, and more commonly sub-contractors, to fiddle tax and prevent workers enjoying basic rights such as paid leave, paid breaks and representation by a trade union. That system is costing the Exchequer billions in unpaid national insurance. I am in the unusual position, for a Back Bencher in an Adjournment debate, of not asking for any money. Back Benchers usually come to such debates wanting more money from the Government, but I want to help the Chancellor by offering him ways to add to the healthy state of public finances.
In 1999, we saw the introduction of the CIS4 card, a construction industry scheme which was part and parcel of changes proposed by the former Tory Chancellor, the right hon. and learned Member for Rushcliffe (Mr. Clarke). While the intention of the scheme was to claw back some of the lost billions of unpaid taxes, it has had only a limited success in terms of recouped revenue. More worryingly, it has led to ten of thousands of workers being incorrectly categorised as self-employed when they should be treated as workers and, as such, enjoy the better employment laws that the Government have rightly introduced. Bogus self-employment imposed on building operatives acts as a subsidy to the building industry by allowing employers to avoid paying national insurance contributions.
Since its inception, some 800,000 CIS4 cards have been issued, with little monitoring or checking by the Inland Revenue—indeed, they seem to be given out like confetti. A new practice has consequently emerged. Sub-contractors will tell a building operative that work is available only for the self-employed—who have no rights and to whom immediate notice can be given. However, in practice, such workers are controlled and directed, required to turn up at a site at a given time, instructed to take training, have to clock on, and may not seek to be replaced during the period of work. To all intents and purposes, therefore, they are workers and do not enjoy the flexibility of self-employed individuals. They should therefore be classed as workers and entitled to employment rights.
190WH Trade unions have successfully brought cases to employment tribunals, yet the practice still continues. Even where workers are employed, disregard for the working time directive is commonplace, because people cannot afford to lose their jobs. They can go to an employment tribunal to demand holiday pay—and can, in the main, expect to win—but that takes time and puts individuals' livelihood at risk. If an individual has a family to support, he simply will not take that risk. The question is whether someone in such circumstances, who has been denied basic employment rights, will feel secure enough to challenge dangerous working practices. The statistics on that speak for themselves.
Many construction workers are employed by labour supply firms. That means that they are direct employees of the agency, pay tax and PAYE and have their national insurance contributions met. However, holiday pay and other benefits are avoided by engaging people on a contract of just short of the 13-week qualifying period and then offering them another contract, again for just short of 13 weeks. Such practice occurs where the client is the taxpayer, for example in the Government procurement of new hospitals. Bromley hospital is an instance of that. The contractor, Taylor Woodrow, engaged a sub-contractor, Buildstone, and accepted no responsibility for that sub-contractor's behaviour. Despite being found at an employment tribunal to have broken the law by denying workers holiday pay, sick pay and notice, Taylor Woodrow washed its hands of responsibility. So did the Bromley Hospitals national health service trust, the regional executive and, ultimately, my right hon. Friend the Secretary of State and the Government. The heart of the problem is fragmentation, with no one prepared to take responsibility.
What is especially galling is that costs are built in to take account of the working time directive when a contract is awarded for any public procurement. Taylor Woodrow would then have built in costs to its sub-contractor. Clearly, contractors are not only fiddling workers out of their holiday pay, but ultimately fiddling the public purse. The taxpayer says yes to the directive within the price of a new hospital, but the workers do not get what is intended. Where is the money? It is kept by the contractor or sub-contractor.
Another example is the channel tunnel rail link. It winds its way through Kent—our finest county, I am sure that you agree, Mr. Gale—including through my constituency and employs up to 1,000 construction workers. Some £4.2 billion of public investment is being poured into the project, which I welcome. However, is it not reasonable to expect people working on the project to enjoy basic employment rights? In case after case, sub-contractors ignore those basic rights. AMEC, McAlpine, Hochtief, Norwest Holst and Skanska all engage sub-contractors that have been found by employment tribunals to have broken the law by ignoring the working time directive and using bogus, self-employed labour.
Encouragingly, Balfour Beatty, which has contract No. 440 in east Kent, insists that its sub-contractors comply with the directive. If one sub-contractor can comply, why cannot others? The good contractor is being undermined by the poor one. We can apply the same principle as we did when arguing for the minimum 191WH wage. The client, Union Railways, should take some responsibility for tackling the problem, as should the Government.
I hope that my hon. Friend the Minister will join me in sending a clear message from the House to those who have public contracts, for the channel tunnel, hospitals or roads, to put their houses in order. They must ensure that people receive their basic rights. The issue cuts across Government. My right hon. Friend the Deputy Prime Minister is considering the matter seriously, as I said, but we must drill down to see the relationship between the client, the contractor and the operative. If the situation improves, people will enjoy better working relationships and we shall have improved productivity. We might also save a few people's lives.
§ Ms Joan Walley (Stoke-on-Trent, North)I congratulate my hon. Friend on securing the debate. I am sure that many hon. Members have heard of terrible tragedies in their constituencies of people being killed in construction work.
My hon. Friend talked about employment rights and the issue of the bogus self-employed. Does he agree that it is vital for the Government to consider carefully the Safety Representatives and Safety Committees Regulations 1977, to see whether they could make provision for roving safety representatives? That would give us much greater confidence about safety checks on-site by trade union members.
§ Mr. ShawThere is always a queue of issues to be included in the Queen's Speech, but I hope that there will be new health and safety legislation to begin to tackle my hon. Friend's sensible suggestion.
There are several ways forward already. I think that it was the first brief of the Department of the Environment, Transport and the Regions to insist that all public procurement contracts demonstrate that construction workers receive their entitlement to basic employment rights.
§ Mr. Michael Clapham (Barnsley, West and Penistone)A year ago I attended a Union of Construction, Allied Trades and Technicians health and safety conference. I heard horrific tales of intimidation of safety representatives by companies. My hon. Friend is right to draw attention to the fact that sub-contracting has created a real danger. He mentioned drilling down. Does he believe that, if the main contractor and the sub-contractor were under a legal obligation to have the main contractor's safety policy written into their contracts and those of each worker, that might lead to a safer environment on building sites?
§ Mr. ShawI was coming to that very point. I agree with my hon. Friend wholeheartedly. The health and safety policy of the main contractor should apply to all workers on the site. That is not the case at the moment. Construction workers can work alongside one another and be subject to completely different sets of health and safety guidelines from their different companies. Some of those guidelines are good, others appalling.
192WH Finally, we need a review of the CIS4 card. The onus should be on the employer or the contractor to demonstrate to the Inland Revenue that the worker is genuinely self-employed, otherwise no card should be issued.
§ Mr. Robert Marshall-Andrews (Medway)Will my hon. Friend, at the end of his fine speech, reflect for a moment on the legal ramifications of the matter that he is bringing to the Government's attention? Workers often have difficulty in establishing liability when they are injured but do not have a contract of employment. The legal liabilities become diffuse. Does my hon. Friend agree that one of the ways in which the Government can deal with that problem is by a simple Bill that reverses the burden of proof in situations such as those? Where a relationship is claimed to be one of employment, the burden of proving that it is not so should rest with the defendant and not with the plaintiff.
§ Mr. ShawI will not argue with my hon. and learned Friend's legal expertise. I know that he takes a great deal of interest in the issue, and his remarks highlight the fact that we have a fragmented, casualised work force who are experiencing something unique: an increase in recorded accidents and fatalities in a particular industry. We cannot tolerate that, and I am sure that my hon. Friend the Minister listened to my hon. and learned Friend's suggestion.
It is time to stop people dying in the construction industry. It is time to stop the tax fiddling, and the intimidation that goes on in the industry. It is time that we faced the fact that employment conditions hold the key to a safer, more secure and more productive construction industry. I recognise that I have painted with a broad brush in presenting my argument. There are many complex issues to tackle, because the matter cuts right across Government, involving the DETR, the Department of Trade and Industry and the Treasury, but they must be tackled and not placed in the tray marked "Too difficult".
§ The Parliamentary Under-Secretary of State for the Environment, Transport and the Regions (Ms Beverley Hughes)I welcome this opportunity to debate employment conditions in the construction industry. It is customary to congratulate hon. Members when they secure an Adjournment debate, but I warmly and genuinely congratulate my hon. Friend the Member for Chatham and Aylesford (Mr. Shaw) on securing this particular debate on an issue that has been of immense importance to me and my Department during the past two years.
I also congratulate my hon. Friend on his sense of timing, because the Minister for Housing and Planning, my hon. Friend the Member for Greenwich and Woolwich (Mr. Raynsford), and I, launched the publication of a report yesterday evening, entitled "A Commitment to People: Our Biggest Asset". It is the report of an industry working group set up under the umbrella of the rethinking construction initiative to examine respect for people issues in the construction industry. That follows the initiative taken by my hon. Friend the Minister about 18 months ago, when he chaired a meeting of leading representatives of the 193WH industry and trade unions to discuss what might be done to improve the way in which the industry treats its own people.
In July 1999, at the rethinking construction conference, my hon. Friend the Minister challenged the industry in strong terms to suggest some practical proposals for improving its performance in that respect. Alan Crane, the chairman of the board of Movement for Innovation, set up a working group drawn from all quarters of industry and from trade unions, whose report was published yesterday.
My hon. Friend the Member for Chatham and Aylesford made some important points about the employment status of construction workers and the consequential working terms and conditions, to which I shall return, but at the outset I make it clear that the construction industry deals with a complex set of circumstances, all of which impact on working conditions. The excessive number of hours worked and some of the other employment issues to which my hon. Friend referred are important factors, but we must discuss those in the context of the industry's poor record on all areas of employment, including training, health and safety and site conditions. The industry's culture and attitude is often adversarial and aggressive, and for too long it has paid too little attention to the position of workers and the conditions in which they work.
We should note some key statistics. The age of people working in the construction industry is increasing. Ten years ago, one third of the work force was under 30; today, that age group accounts for only about 25 per cent. The work force tends to be made up of white males, the proportion of women is less than 9 per cent., and less than 2 per cent. are from minority ethnic groups. Construction workers work longer hours than those in other industries, and are more likely to be involved in an accident, as my hon. Friend the Member for Chatham and Aylesford has graphically pointed out.
Safety is an issue about which we are especially concerned. As my hon. Friend said, the number of fatalities declined for several years but rose to 85 last year, and in the first half of this year 62 people have been killed in construction accidents. That is an appalling figure and totally unacceptable, as is the fact that the trend is rising instead of continuing to decrease. Every year, many thousands of people leave the industry as a result of a work-related injury. Twice as many people as in any other industry suffer ill health as a result of their work, one in 20 suffers from serious muscular-skeletal damage, and 600 die every year from past exposure to asbestos. Those statistics, taken together, represent an unacceptable record of fatal accidents and attention to health, to which we must put an end.
Two weeks ago, my hon. Friend the Minister for Housing and Planning and I met leaders from all sectors of the industry, and we put it to them in the strongest possible terms that no change is not negotiable. We are also meeting trade union leaders and the Health and Safety Commission is inviting a wide range of leaders to a safety summit in February, which my right hon. Friend the Deputy Prime Minister initiated. We have not only the respect for people report but the "Revitalising Health and Safety" report drafted by the Health and Safety Executive. Because of the lack of 194WH time, I shall not dwell on statistics, but I make it clear to my hon. Friend the Member for Chatham and Aylesford that we are determined to ensure that there is progress throughout the construction industry, not only in relation to site conditions. The attention to health and safety must start right at the beginning of the construction process. There are many means by which safer conditions can be adopted at the point of design and specification. Too little attention has been paid to the potential of design for increasing safety.
§ Ms WalleyMay I press my hon. Friend on the Safety Representatives and Safety Committees Regulations 1977? Does she envisage that the review will include a close examination of the amendments that would be necessary to provide roving safety representatives?
§ Ms HughesNothing is excluded from the review, which will examine a range of measures. Working with industry, trade unions and the Health and Safety Executive, the aim is to improve the record. My right hon. Friend the Deputy Prime Minister is also committed to taking further action, but we shall have to wait for the Queen's Speech and further legislative proposals before we know exactly what is proposed. However, my right hon. Friend's commitment is clear.
The case for change is not just about health and safety. The industry's record needs to be improved across the board. The ethical case for improvements is important, but there is also a strong business case. The industry now faces severe skill shortages as a result of inadequate training and poor management. The case for radical change is powerful: not only is the construction work force ageing, but not enough talented young people are applying. In short, the reputation and the history of the industry in respect of its workers does not attract young people, who do not want to work in the poor conditions with poor prospects that have been the experience of so many people in the industry to date.
Civil engineering applications are drastically down and several courses that provide proper professional training in the construction industry are experiencing difficulties because young people are not attracted to it. It is an issue for the industry itself to tackle. In many respects the industry has a proud history, but it is facing serious difficulties as a result of its lack of attention to people.
The Government's report "A Commitment to People" proposes some practical suggestions for improving the industry's performance. I do not have enough time to explain it fully, but it deals with diversity issues, site facilities, the working environment, off-site health, safety, career development and lifelong learning.
I must deal with the issues raised by my hon. Friend the Member for Chatham and Aylesford about bogus self-employed people and general employment conditions. The construction industry scheme is designed to stop tax evasion; it is not addressed specifically at shifting the balance in the employment status of individuals. I am pleased that my hon. Friend recognised the good practice evident in the industry in that regard. Some contractors are moving in the direction of employment. Over the past four years since 1996, the proportion of people working in the industry was initially broadly balanced between self-employed 195WH and employed, but the trend is now shifting. Now the proportion of employed to self-employed is almost double. Despite my hon. Friend's concern about the impact of the scheme, we are starting to see a shift.
One mechanism for promoting that shift is the Government's efforts on rethinking the construction agenda, which will promote good conditions, training and a long-term partner relationship between contractors and clients. Many improvements in the conditions of workers require investment in training, health and safety, and so forth. It makes sense for contractors who make that investment—and they are—to base their relationship with their work force on employment, rather than self-employment. If the best-trained people stay with the company, that is a return on investment.
My hon. Friend pointed out the importance of the role of clients. Central and local government have a key role in this context. I thank my hon. Friend for raising this important issue, and reassure him about the Government's commitment to make progress in the direction that he outlined.