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National Living Wage

Business, Energy and Industrial Strategy – in the House of Commons on 21st January 2020.

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Photo of Emma Hardy Emma Hardy Labour, Kingston upon Hull West and Hessle

What recent assessment she has made of the level of compliance of businesses with payment of the national living wage.

Photo of Kelly Tolhurst Kelly Tolhurst Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy)

The vast majority of jobs that are eligible to receive the national living wage are in compliance with the law, with only 1.5% of eligible jobs paid below in April 2019. Anyone entitled to be paid the national minimum wage should receive it. Last year, we ordered employers to pay a record £24.4 million in arrears and issued £17 million in penalties to non-compliant employers.

Photo of Emma Hardy Emma Hardy Labour, Kingston upon Hull West and Hessle

I thank the Minister for her answer but, as she is aware, the enforcement system is not working effectively at the moment, and hundreds of well-known companies are still getting away with not paying their workers the national living wage. I welcome the steps that the Government have already taken, but I hope that the Minister will respond by setting out additional actions that the Government will take to ensure that nobody gets away with paying their workers less than they are owed.

Photo of Kelly Tolhurst Kelly Tolhurst Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy)

I want to make it clear to the hon. Lady that this Government will enforce the national minimum wage and make sure that employers that are meant to be paying it do so. I think that is shown by the penalties and arrears that were recovered last year. We have doubled the enforcement budget. I remain committed to making sure that employers are able to easily comply with the law, but where there is any sign of breach, we are enforcing and making sure that people get the pay they are entitled to.

Photo of Andrew Bridgen Andrew Bridgen Conservative, North West Leicestershire

Will the Minister agree to meet me to discuss the situation in Leicester, where I believe that approximately 10,000 people in the clothing industry are being paid £3 to £4 an hour in conditions of modern slavery?

Photo of Kelly Tolhurst Kelly Tolhurst Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy)

I thank my hon. Friend for raising the subject; yes, I would be very happy to meet him. The sector has been the subject of focus. Her Majesty’s Revenue and Customs, which is responsible for enforcing the national living wage, and cross-border agencies have been doing extensive work, but any details that my hon. Friend may supply would be helpful.

Photo of Rachel Reeves Rachel Reeves Labour, Leeds West

We hear warm words from the Minister, but the truth is that in the last 10 years, just nine firms have been prosecuted and fined for non-payment of the minimum wage. When those fines are levied, they are at only half the level that they could be. Why is that the case if this is such an important area for the Government?

Photo of Kelly Tolhurst Kelly Tolhurst Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy)

I note the hon. Lady’s interest in this area, but I would just correct her: there have actually been 14 prosecutions for non-payment of the national minimum wage. I would also make it clear to the House that there are ways other than just bringing prosecutions to ensure that employers pay. Ultimately, we should focus on ensuring that businesses understand their obligations to their employees, that they pay the minimum wage, and that when they do not, we enforce correctly. I am determined to make sure that that continues to happen.

Photo of Stephen Crabb Stephen Crabb Conservative, Preseli Pembrokeshire

Pembrokeshire is one of those parts of the country where the substantial increases to the minimum wage have had a transformative impact on people with low incomes. Will the Minister join me in saluting the great many small businesses and microbusinesses across the county of Pembrokeshire that choose to do the right thing, because they support the aim of the policy, by implementing and enforcing the minimum wage?

Photo of Kelly Tolhurst Kelly Tolhurst Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy)

Absolutely. I thank my right hon. Friend for his comments and I very much recognise the role of the SME market in ensuring that some of the lowest paid workers get the minimum wage, and in happily sometimes paying higher than that. As the small business Minister, my priority is to ensure not only that we enforce the national minimum wage, but that we create the right environment in which SMEs can thrive so that they continue to meet pay requirements.

Photo of Rachael Maskell Rachael Maskell Shadow Secretary of State for Employment Rights

It is simply not good enough: a decade—a decade, Mr Speaker—of workers being exploited under this Government’s watch. So why has the Minister let the 87% of firms that break the law and fail to pay the minimum wage get away with it? What is she going to do about it and by when? One thing is clear: we, the Labour party, are the only party that will ever stand up for working people.

Photo of Kelly Tolhurst Kelly Tolhurst Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy)

I would thank the hon. Lady for her comments, but I wonder whether she is living in a land of fiction. It is the Conservative party that is standing up for workers. It is this party that has given the largest increase in the national minimum wage, rising to £8.72—an increase of 6.2%. As I have already outlined, our enforcement has doubled. We remain committed to enforcement, and it is a complete misrepresentation to say that in the past 10 years this Government have not enforced the national minimum wage. We remain committed to doing so, and for all the time that I am responsible, we will continue to do so.