National Minimum Wage (Amendment) (No. 2) Regulations 2016 — House of Lords, 2016-09-08
Topic: Education
Robert Stevenson (Labour, Centre-left): My Lords, first, I express my apologies to the House for not being present at the start of the discussions. I looked at the Annunciator and thought that I had about 10 minutes to spare, because the last speaker in the debate had only just started, but apparently he cut his speech very short. I was entranced by a debate going on in the Moses Room on access arrangements for going into secondary education, which was so good that I have completely lost my place. I am sorry that I was late However, I have heard the Minister speak on many of these issues before. Indeed, we debated them as recently as the end of last term. I am fairly aware of the issues and I will certainly read what she said carefully, in case I have missed anything. I have no objections at all in principle to the proposal that is being brought forward. For all the arguments made by the Minister, this process is now well-entrenched. The increases are very modest, but they are done in accordance with the procedure set out. I have absolutely no doubt that it is appropriate and good that wages will be lifted, which will benefit a large number of people on lower pay. Women in particular will see these benefits in their pay packets I have four small points that I want to raise and to which I would be happy to hear the Minister respond, but if there are complications I am happy to receive a letter in due course. The first is a technical one, which was that the paper supplied by the Printed Paper Office includes an impact assessment. It is extremely well-written and I compliment officials on that. I enjoyed reading it and I felt that it dealt with all the issues well. However, it said that the RPC opinion was awaiting scrutiny and I have not been sent that. I would be grateful if it could be provided. I am sure that there is no difficulty around it, but it would be nice to have a complete set of papers when we are considering these issues. On technical issues, I again congratulate the Minister on living the life that she promised, which was to bring these things in on the common commencement date of 1 October. She will have expected me to say that Secondly, the evidence base for many issues, but particularly for non-compliance and to some extent apprenticeships, depends on a rather oddly named survey called ASHE—a survey of employees completed by employers, which can be used to identify jobs paid below the national minimum wage. Clearly non-compliance is important here. Two points arise from it: is that the best we can do, and does the department have any plans to improve it? A survey of employees completed by employers aimed at establishing whether the national minimum wage is being paid at the correct rate may not be the most appropriate and independent way of checking whether it is happening in practice. Having said that, we note that some 209,000 employees’ jobs were paid less than the national minimum wage in April 2015. That is a significant number and ought to be of some concern, even though the individual amounts are small. It is the methodology that I pick up on. I would be interested to know whether the Minister has plans to improve it, because, as she said, it is important to ensure that the national minimum wage and, as we get to it, the national living wage are paid. If we do not have an adequate means of checking, I do not see how we will do so My third small point raises a similar issue. Quite an important part of some people’s pay packets is the accommodation offset rate. Accommodation is the only benefit in kind that can be offset against minimum wage pay. It is only up to the limit. I suspect that it is therefore quite an important element for quite a large number of the people involved, but the trouble is that we do not know how many that is, since apparently no statistics are available that give any details around it. The increase this year is 12%. It is a substantial amount of additional money, which goes up to £6 per week, but because of the uncertainty in knowing how many employees in scope of the national minimum wage offset rate receive it, it is not counted in analysing what the benefits, costs and disbenefits would be of any increase. I do not wish to delay consideration but, in the need to improve the quality of the public administration, surely we could do a bit more to survey and get accurate information. If it does not lie in BEIS, perhaps it lies in DWP—I am sure that the noble Lord, Lord Freud, is taking note of the points that I make, because I am sure it is relevant to what he will say Finally, in a week where we have been given a lot of information about the activities of a particular sportswear manufacturing and delivering firm, it seemed a little ironic to read about the enforcement regime and the relatively small number of firms that have been reported on and investigated. Sports Direct—it may as well be named—clearly has a large problem on its plate in what it has been paying, or not paying, its employees. The situation with Sports Direct arose from a private investigation by a newspaper, not from the additional money available to HMRC. Has that taught the department any lessons about how this is to be taken forward? Might it wish to investigate other firms as a result? Its approach seems to be one of responding to complaints. That might miss some of the most obvious cases where not enough action is taking place What sort of approach would be better? Is there not a suggestion to be made of a tougher approach to large employers employing large numbers of people on zero-hours contracts, where it is clear that the combination of that arrangement, particularly in companies controlled perhaps by an original owner, might suggest that there will be some difficulty in ensuring that these things happen? Will the Minister confirm that in the case of Sports Direct, since it is fairly clear that there has been failure to comply with the arrangements, the doubled penalties to which we agreed in the then Enterprise Bill and the additional more difficult approach—not in numbers of employees, but in the amount per employee—will be applied in full in this case?