Clause 11
Employment Bill [Lords]
Jonathan Djanogly (Shadow Minister, Business, Enterprise and Regulatory Reform; Huntingdon, Conservative)
I am pleased that I took my papers with me to have a little look at them over lunch; otherwise, matters may have been rather difficult.
Why are we being asked to give Her Majesty’s Revenue and Customs more powers when those that it has have been used so sparsely, or is the Minister implying that the Government miscalculated so badly when they drafted the National Minimum Wage Act 1998? Furthermore, while I may be persuaded of the merits of proceedings in the Crown court where an unlimited fine is appropriate for large-scale and malicious acts of non-compliance, I am not so easily convinced that it has any real application in the usual course of enforcement. Can the hon. Gentleman enlighten us and explain what proportion of current cases would be prosecuted under the new proposed criminal powers and say how many would remain civil? Furthermore, to date in how many cases—successful or not—has HMRC applied for the maximum fine of £5,000? I fear that the Government are trying to hand a howitzer to HMRC, when it has shown itself loth to use even a pop gun.
I sympathise with the Government’s attempt to empower HMRC and give it the ability to prosecute larger scale offenders, as so concisely set out by Lord Jones, the Minister in the other place, who said:
“We do not believe that the sentencing powers available to magistrates would be suitable in the most serious and exceptional cases where employers refuse or contrive not to pay the national minimum wage and do not co-operate with a compliance officer’s investigations.”—[Official Report, House of Lords, 13 March 2008; Vol. 699, c. GC258.]
However, the Government need to show that such a problem actually exists. I am concerned about supporting the clause on the basis of only perceived exceptional circumstances for which there is scant, if any, evidence.
If the Minister can answer the questions that I am about to ask him, I might find myself more able to support the clause. First, how many exceptional cases have occurred, and how many are being investigated? Secondly, how would we prevent HMRC from becoming overly zealous in its pursuit of actions in the Crown court at the expense of the taxpayer? Thirdly, if such gross and serial underpayment is being perpetrated, why has HMRC not heard of it and begun an investigation with a view to nipping it in the bud before it reaches a stage that requires such large-scale, legal involvement? If the Minister can provide me with answers to those questions, he will go a long way towards easing my concerns.