National Minimum Wage

Oral Answers to Questions — Business, Enterprise and Regulatory Reform – in the House of Commons at 10:30 am on 3rd July 2008.

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Photo of Jim Cunningham Jim Cunningham PPS (Mr Mike O'Brien, Minister of State), Department for Work and Pensions 10:30 am, 3rd July 2008

What steps the Government have taken to increase awareness of the minimum wage since its introduction.

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Photo of John Hutton John Hutton Secretary of State, Department for Business, Enterprise & Regulatory Reform, Secretary of State for Business, Enterprise and Regulatory Reform

Last year, the Government ran a major advertising and awareness campaign to highlight entitlement to the national minimum wage. The campaign produced some very positive results, including a 400 per cent. increase in calls to our language and help lines, more than 170,000 hits on the online guidance, and an increased number of enforcement requests to Her Majesty's Revenue and Customs.

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Photo of Jim Cunningham Jim Cunningham PPS (Mr Mike O'Brien, Minister of State), Department for Work and Pensions

I thank my right hon. Friend for that answer, but further to it, what is he doing to enforce the minimum wage, in particular in respect of employers who exploit migrant workers by paying them below the minimum wage and apportioning unrealistic costs on them?

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Photo of John Hutton John Hutton Secretary of State, Department for Business, Enterprise & Regulatory Reform, Secretary of State for Business, Enterprise and Regulatory Reform

We are taking two steps to address those concerns. First, the Employment Bill, which is currently going through the other place, will significantly change the way in which we recover arrears of unpaid wages and make it clear that it is the will of this House that every worker should be entitled to a proper national minimum wage that is properly enforced, and that there will be a consequence for employers who do not pay it. Secondly, we have provided significant additional resources to help enforcement of the national minimum wage. I hope that that addresses the concerns that my hon. Friend and many others have expressed to Ministers in recent weeks.

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Photo of Brian Binley Brian Binley Conservative, Northampton South

The national minimum wage has increased by 53.3 per cent., while average earnings have increased by only 39.9 per cent. The British Retail Consortium has stated that members' costs increased by £1.7 billion in 2006, which was 13 per cent. more than they expected. The strain on small businesses is ever growing and increasingly causing problems. Recognising the Chancellor's call for inflation-related pay increases, will the Government now ensure that the minimum wage will no longer increase at levels above inflation?

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Photo of John Hutton John Hutton Secretary of State, Department for Business, Enterprise & Regulatory Reform, Secretary of State for Business, Enterprise and Regulatory Reform

As the hon. Gentleman will know, the latter point is a matter for the Low Pay Commission, which will make recommendations to Ministers. I know that he is a fair-minded man, and I would have thought that he would welcome the fact that the wages of the poorest workers in Britain have been rising at a faster rate than those of others; I would have thought that that would be welcomed in all parts of the House. On the point about small businesses, let me rehearse the following argument with him. Almost 0.75 million more small businesses are now trading in the United Kingdom than 10 years ago, so he cannot portray the national minimum wage as in any way inhibiting the growth of small businesses. That would be unreasonable, and it is not borne out by the evidence, which it is always important for us to keep in mind. Also, 3 million more people are now in work, going to work every day, than in 1997. If we had listened to the advice of the many Opposition Members who argued that the national minimum wage would destroy jobs, we would not have seen the progress that we have seen so far.

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Photo of Michael Clapham Michael Clapham Labour, Barnsley West and Penistone

My right hon. Friend may be aware of a case in Nottingham in which an immigrant worker was paid £8.80 after a week's work. That is total abuse. Is he also aware that 42 per cent. of the construction labour force in London is immigrant labour? That labour needs protecting. I hear what he says about the Employment Bill that is currently in the other place, but does he agree that further protection is needed, and will he consider working with his colleagues in the Department for Work and Pensions in order to extend the gangmasters regulation to construction?

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Photo of John Hutton John Hutton Secretary of State, Department for Business, Enterprise & Regulatory Reform, Secretary of State for Business, Enterprise and Regulatory Reform

Obviously, we look at a number of these issues, because it is important that proper protections are in place. I hear what my hon. Friend says about the Nottingham case and his concerns about what is happening in the construction industry. We have enacted legislation to protect workers and to ensure that they are entitled to a proper national minimum wage. It is our responsibility as Ministers to make sure that that legislation is properly and fully enforced. Our current focus is on improving enforcement. We are willing to listen to, and consider carefully, any further requests for additional legislation, but the case for such legislation has to be fully and squarely met.

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Photo of Philip Hollobone Philip Hollobone Conservative, Kettering

What has been the regional variation in the number of complaints regarding non-payment of the minimum wage?

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Photo of Mark Lazarowicz Mark Lazarowicz PPS (David Cairns, Minister of State), Scotland Office

In a recent debate that I secured in Westminster Hall on the national minimum wage, my right hon. Friend Mr. McCartney, who has some knowledge of these matters, suggested that the legislation now going through Parliament could require wage slips to include details of the national minimum wage currently in force and of the national minimum wage hotline number. That simple measure could provide greater awareness of the minimum wage and of enforcement. Will my right hon. Friend the Secretary of State consider making such provision as that legislation goes through Parliament?

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Photo of John Hutton John Hutton Secretary of State, Department for Business, Enterprise & Regulatory Reform, Secretary of State for Business, Enterprise and Regulatory Reform

I am a great admirer of my right hon. Friend Mr. McCartney, who did a sterling job in introducing the legislation. We will obviously look seriously at any such proposal, and I am happy to discuss in more detail later with my hon. Friend this and any other concerns that he has.

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