The Parliamentary Under-Secretary of State for Business and Trade
(Kevin Hollinrake) I beg to move, That the Committee has considered
the draft National Minimum Wage (Amendment) Regulations 2023. It is
a pleasure to speak with you in the Chair, Mr Hollobone. The
regulations will raise the national living wage and the national
minimum wage on 1 April 2023. We remain proud of the strength of
the UK labour market. There are now 1 million more people on
payrolls...Request free trial
The Parliamentary Under-Secretary of State for Business and Trade
()
I beg to move,
That the Committee has considered the draft National Minimum Wage
(Amendment) Regulations 2023.
It is a pleasure to speak with you in the Chair, Mr Hollobone.
The regulations will raise the national living wage and the
national minimum wage on 1 April 2023. We remain proud of the
strength of the UK labour market. There are now 1 million more
people on payrolls compared with pre-pandemic levels, and demand
for workers remains close to record levels. However, we recognise
the continued impact of the cost of living pressures, which is
why the Government have taken, and will continue to take, robust
action to protect the most vulnerable in society.
The national living wage and the national minimum wage act to put
more money in the pockets of the lowest-paid workers. This year
will be no different, with the largest cash increase in the
24-year history of the minimum wage. We are also increasing
benefit payments by 10.1%, in line with September’s consumer
prices index inflation rate. Almost 12 million pensioners will
benefit from the triple lock, as the state pension will also
increase by 10.1%.
Our package of measures includes the energy price guarantee,
which has saved a typical UK household around £900 since its
introduction in October, and a series of cost of living payments
worth hundreds of pounds for millions of eligible households on a
means-tested basis. Our commitment to a high-skilled,
high-productivity, high-wage economy will further address the
cost of living, as well as level up every part of the UK and
hasten the transition to net zero.
The regulations will increase the national living wage and
national minimum wage rates and will come into force on 1 April.
Following a comprehensive impact assessment, we estimate that
they will give a pay rise to 2.9 million workers across the
United Kingdom. I am pleased to confirm that the Government have
accepted all the rate recommendations made by the Low Pay
Commission in October. I place on the record my gratitude to the
commission; I also gave my thanks personally in a meeting last
week. As ever, it has worked tirelessly to bring together the
views of business and worker stakeholders and remaining informed
by expert research and analysis.
The regulations will increase the national living wage for those
aged 23 or over by 9.7% to £10.42 an hour, which is an increase
of 92p. After this year’s rise, the national living wage will
have increased more than twice as fast as inflation since its
introduction. The regulations will also increase the national
minimum wage rates for younger workers and apprentices, as well
as the accommodation offset. Workers aged 21 and 22 will receive
an increase of £1, or 10.9%, to a minimum hourly rate of £10.18.
Workers aged between 18 and 20 will now be entitled to an extra
66p an hour, taking their rate to £7.49, while the rate for under
18s will reach £5.28, which is a rise of 47p an hour. Those
changes represent an increase of 9.7%.
Apprentices aged under 19 or those in the first year of their
apprenticeship will also receive an increase of 9.7%, as their
rate rises from £4.81 to £5.28. Meanwhile, the accommodation
offset, which is the maximum daily amount that an employer can
charge a worker for accommodation without it affecting their pay
for minimum wage purposes, will increase by 4.6%, from £8.70 to
£9.10.
The Government have continued to take action to fulfil their
manifesto commitment to enhance the rights of workers and support
people to stay in work. We are backing six private Members’ Bills
in this Session to deliver on our commitments. Once passed, those
measures will ensure that all tips, gratuities and service
charges are allocated to workers; create a statutory entitlement
to neonatal care leave for workers with caring responsibilities;
protect workers from redundancy during or after maternity; and
grant workers the right to request flexible working from day
one.
(Middlesbrough) (Lab)
On the right to request flexible working, what happens when the
employer says no?
The employer can say no when they have considered the request
properly, and they need to set out their reasons. It is important
to note that there are eight different business reasons. We want
to ensure that businesses can also cope with the six new key
measures, as well as the £2.5 billion of extra cost for business
organisations throughout the country, of the national living wage
increases. We want to ensure that any burdens that we place on
businesses are proportionate, and a right to request delivers
that balance.
If the answer is no because the business is exempt through the
various ways to get out of it, what is the cost?
I do not quite follow the hon. Gentleman, but according to our
research 83% of flexible working requests are granted. The right
to request flexible working, which is not related to the
regulations, creates the opportunity for a conversation between
an employer and worker about flexible working. That is its
purpose. I understand that the hon. Gentleman would want to put a
burden on business—I suppose he is saying there should be a right
to insist—but we think that would go too far.
We are also looking to grant workers, including agency workers,
the right to request more predictable terms and conditions of
work. The private Members’ Bills will further strengthen our
flexible and dynamic labour market and ensure that businesses
have the confidence to create jobs and invest in their workforce,
which will allow them to generate long-term prosperity and
growth.
The Government set the ambitious target for the national living
wage to equal two thirds of median earnings by 2024, provided
that economic conditions allow. We remain committed to that
target, and this year’s increases keep us on course to reach it.
We also aim to further reduce the age threshold for the national
living wage so that it will apply to those aged 21 and over by
2024.
We recognise that this is a difficult time for many businesses,
workers and consumers, and we know that sustainable rises in the
minimum wage rates depend on the wider economy. In making its
recommendations, the Low Pay Commission will continue to take the
wider picture into account, alongside extensive stakeholder
engagement. I thank the commission for making additional
recommendations relating to the accommodation offset in its
recent report. We are considering them carefully and will respond
in due course.
The regulations aim to protect the lowest-paid workers across all
sectors and regions and reward them for their contribution to our
economy. I commend them to the Committee.
6.08pm
(Ellesmere Port and Neston)
(Lab)
It is a pleasure to see you in the Chair this evening, Mr
Hollobone.
I thank the Minister for setting out the regulations. Their
purpose is to update the National Minimum Wage Regulations 2015
for the various age groups and categories of worker that the
Minister set out, as well as to make adjustments for apprentices
and the daily living accommodation offset rates. To be clear, we
will not oppose the regulations; any rise in the minimum wage is
a welcome step, particularly in the context of the spiralling
inflation of the past year. I am sure that many workers are
anticipating—indeed, counting on—the rises that we have heard
about today.
The Minister said that this is the most generous increase in cash
terms that we have seen. Obviously, that has to be looked at in
the context of an inflation rate at a 40-year high. Last year, I
raised concerns that the increases then were not calibrated to
the cost of living, which had sharply increased in the weeks
before the relevant regulations were announced, so it is welcome
that the Low Pay Commission was able to factor in the high
inflation on this occasion.
However, I am concerned that only the rate for 21 and
22-year-olds has been increased at a level comparable to
inflation, with the 10.9% increase. The other wage categories
have increased by 9.7%, which is actually 0.4% below the 12-month
inflation figures released by the Office for National Statistics
in January. We know that the cost of living for many people is
significantly higher than that. Food, fuel and housing costs have
increased at steeper rates. Food inflation is at about 17.6% and,
according to a House of Commons Library report published two
weeks ago, domestic gas and electricity prices have risen by 129%
and 67% respectively.
On top of all that, private rents have reached a record high,
including through a 16.1% rise in London rents in the last 12
months. On average, monthly mortgage payments have increased by
£500 because of the Budget last autumn. The cost for people of
sustaining the basics of everyday life, be it food in their
stomach, a roof over their head or keeping warm, has skyrocketed.
We agree that the regulations will take some steps to address the
situation, but there is still quite a gap.
The Minister referred to the intention to have the national
living wage reach two thirds of median earnings by 2024; in the
current economic climate, does he still consider that aim to be
achievable? He said that the target is subject to the prevailing
economic conditions; does he consider the outlook over the next
12 months to be conducive, or otherwise, to meeting that
target?
It is disappointing that the Government have once again not
addressed the inequities of the minimum wage age limits. People’s
age should not determine the price of goods and services, and it
certainly should not determine their income. The decision to
retain the different age rates is even more unfair given the cost
of the basics that I have outlined, particularly the cost of
energy, food and fuel. It should be noted that the number of
young people on zero-hours contracts has risen again, with the
proportion of 16 to 24-year-olds on zero hours contracts now at
the highest level since 2013, and with a 4% increase in the last
year of people in that age group looking for additional work. It
seems that the younger generation is once again bearing the brunt
of the current inequities in the workplace.
The Opposition value equally the contribution of people in work.
It does not seem fair that two people who perform the same role
should be paid differently because one is 24 and the other is 21.
It is not fair that the year of someone’s birth will determine
the rate of a wage increase or, as we have seen in respect of
inflation, a real-terms cut in pay. Only 21 and 22-year-olds will
see their pay rise at a rate equivalent to inflation; those on
the national living wage aged between 18 and 20, and 16 and 17,
as well as those on apprentice rates, will see a smaller
increase. I understand that the purpose of giving 21 and
22-year-olds a higher rate of increase is to smooth their
transition to the national living wage, but it means that is the
only group to see a real-terms pay increase this year.
I wonder whether my hon. Friend can help me. Does he find it as
inequitable as I do that there is prejudice against young people
in the workplace? They do not go into supermarkets and find that
goods are priced at a lower level because of their age, so how on
earth can it possibly be justified that they should receive a
lower rate of pay for the work that they do opposite somebody 10
years their senior?
That is exactly the point: the expenses faced by people who live
independently are the same regardless of their age. That is why
the current differences are indefensible.
On the differences in the increase, will the Minister say a few
words about why the accommodation offset is going up by only 4.6%
this year? That is considerably below the other rates. I
understand that there is a review going on in that respect.
The impact assessment states that the tight labour market has
caused nominal wages to increase, particularly among the lowest
paid. It says that many businesses consulted by the Low Pay
Commission said that better wages are used to attract and retain
their workforce. Alongside good working conditions, we believe
that is central to good employment practice. However, I have
heard from representatives of certain sectors that some do not
treat the minimum wage with the importance that others do. When
we met in Committee to discuss the relevant regulations last
year, it was noted that non-compliance was greatest in the
hospitality and care sectors. Will the Minister tell us what
steps have been taken to deal with non-compliance in those
sectors?
There is a particular concern that domiciliary care workers are
not being paid for the time spent travelling between locations,
thus causing their wages to fall below the minimum wage levels. I
hear—a recent Unison survey confirmed this—that about 73% of care
workers are not paid for their travel, and Unison estimates that
that affects between 155,000 and 220,000 workers. The impact
assessment is correct that some sectors use high wages to entice
workers, but it is clear that some in the care sector are not
doing that. The abuse of travel time means that the minimum wage
is not being paid to hundreds of thousands of people.
I understand that, because of the fragmented work patterns,
carers’ pay calculations are highly complex, and hundreds of time
fragments per day are to be accounted for. That means it can be
very difficult for people to ascertain whether they are being
paid the minimum wage. Of course, it is possible under section 10
of the National Minimum Wage Act 1998 to get the pay records and
inspect them, but I am told that those requests are frequently
ignored, and information is often provided in a form that is
difficult to decipher. Even pay experts sometimes find it hard to
understand what pay is being received.
Employers are obliged to keep sufficient records, but there is a
grey area in respect of what the standard constitutes in reality
and, of course, the guidance can be ignored. No employer in the
care sector has been prosecuted for poor record keeping, despite
the high number of compliance failures and the clear evidence
produced in the survey. Will the Minister talk to his officials
about what more can be done to address the widespread abuses in
the care sector, which deserve closer examination?
We should not forget that the minimum wage does not cover
everyone. It does not cover the self-employed, many of whom do
not receive the minimum wage. What is being done to address that?
What is done to address the issue of people who are in bogus
self-employment who do not get the minimum wage but, because the
people who hired them are gaming the system, have no ability to
challenge their pay and do not appear in any statistics? What
steps are being taken to help those who are exploited because
they are engaged on an internship that stretches out for months
without pay? What about those who have to do a trial shift and
work for eight, 10 or 12 hours, only to be told at the end that
they are not required and will not get paid? Those are all abuses
of the minimum wage and I want to hear from the Minister what is
being done to tackle them.
Enforcement is key. If we are to have confidence that the
regulations will benefit all our constituents, we need to be
confident that they will be properly enforced. This year is the
25th anniversary of the Labour party having established the
principle that workers are entitled to a minimum wage in law. It
is important that the Government ensure confidence in the system
by bringing to task unscrupulous bosses who exploit their
workers. The law is positive only if it is enforced. The past 25
years have made a lot more employers consider the law when they
pay their workers, but they have not ended the existence of
unscrupulous bosses altogether.
One of the most crucial elements of the legislation is the need
to tackle businesses that flout minimum wage regulations. The
Minister understands the importance of enforcement because on 23
February he told me in a written answer to one of my questions
that the naming and shaming of employers who fail to pay the
minimum wage is an “important part” of enforcement and
compliance. He is right about that, because companies should
expect to be found out and called out when they underpay their
staff, but given it is such an important part of the Government’s
strategy, why has not a list of shame been released since the
previous time the relevant regulations were debated? Given that
the lists are supposed to be published on a quarterly basis, a
hiatus of a year and a quarter since the last one, with no
explanation, is concerning, so I hope the Minister will address
that point when he responds.
The delays in publication have serious implications. The December
2021 round of naming included only investigations that had
concluded back in 2018, and some of those had looked into
breaches that went back almost a decade. We now have no publicly
accessible register of firms found to be underpaying staff since
before the covid pandemic. We all know that the labour market has
changed drastically in that time, so it really is important that
we get on to round 19 as soon as possible.
Leadership and setting an example are important. Naming and
shaming is one thing; modest fines are another. If transgressors
are allowed to continue to procure lucrative contracts from
Government Departments, it could be said that the consequences of
their actions are light. When handing out work to the private
sector, the Government have billions of pounds at their disposal
to distribute. Whether such reliance on the private sector is a
healthy or wise option for the Government is a matter for another
debate, but at the very least I would hope that those found not
to be paying the minimum wage are at the back of the queue when
it comes to handing out Government contracts, if not removed from
the queue altogether.
It seems the Department for Business and Trade does not even
bother to ask itself the question when contracting with the
private sector. In response to a recent written question on
whether the Department has issued any contracts in the last three
years to companies that had appeared on the list of shame, the
Minister told me that he
“does not hold information about the number of named employers
who have a contract with a Government Department.”
He cannot stand up today and categorically tell us whether his
Department has or has not contracted work with a company found to
be illegally underpaying its workforce. How can the Department
responsible for ensuring that businesses in this country comply
with minimum wage requirements be unable to confirm something so
basic and so important? Is compliance not a question worth asking
of those who receive taxpayers’ money to undertake Government
contracts?
There are concerns about other Departments that have sought to
engage with companies that have appeared on the list of shame. I
will not go through them all now, but it is important that the
Department responsible for enforcing the minimum wage should look
closely at whether the people it engages are paying it.
My hon. Friend makes an important point that speaks to the lack
of commitment from the Government, given their previously
expressed view to create a single enforcement body that could
have embraced the enforcement of the national minimum wage. Is he
as disappointed as I am that we still do not have any clarity
from the Government on whether that single enforcement body will
be formed?
My hon. Friend is absolutely right about the questions in respect
of the level of commitment. When I was preparing for today’s
debate I looked back at previous discussions, and the Minister
has always talked about the single enforcement body. We have not
heard any of that from the Minister today. Perhaps he will
confirm that it is still the Government’s intention to introduce
a single enforcement body. They will have to table legislation to
do that, so we might yet be disappointed. Will the Minister
confirm, in the light of the answers we have received, that he
will undertake a full investigation and ensure that in future
those who do not pay the minimum wage face further scrutiny
before they are given Government contracts?
As I hope to have demonstrated today, legal minimum levels of pay
are not the whole solution to low pay, but they are an important
part of it. Trade unions, as the collective voice of workers,
also play a vital role in securing better working conditions. I
hope that one day we have a Labour Government who will help all
our constituents to receive the pay and conditions that they
deserve.
6.24pm
(Basildon and Billericay)
(Con)
I will not keep the Committee for long. I congratulate my hon.
Friend the Minister, not only on the work that he is doing in his
Department but on his part—and the Government’s—in accepting the
Low Pay Commission’s recommendation and allowing this change to
the two minimum wages. I congratulate the Government on the fact
that benefits have been linked with inflation and the triple lock
has been maintained. A lot of us from across the House lobbied
hard on those issues and I am pleased that the Government
listened.
These regulations will ensure that 2.5 million of the poorest
paid people will be helped; their pay will be kept in line with
inflation, just at the moment when that is most needed because of
the cost of living crisis. This will have a multiplier effect on
the wider economy, because these people will more likely spend
the money because they need to, which can only be a boost to the
wider economy.
I will briefly make two further points, one of which the Minister
raised—but it deserves emphasising. The regulations are another
step towards the achievement of a high-wage, high-tech,
high-employment and high-growth economy, which is what we need to
achieve, particularly when one considers the low, or lowish,
productivity figures in this country. For too long, businesses
have relied on cheap labour from Europe as a substitute for
investment, and that has impacted on our productivity figures.
There is no substitute for investing in research and development,
as that helps to drive the productivity figures over the medium
to long term—there is no short-term fix—but these increases in
the minimum wage will take us a step closer to achieving the
high-wage, high-growth, high-tech economy that we all want.
There will of course be a cost to business, but inward investment
and jobs are decided by what some economists call comparative
advantage. It is about levels of corporation tax, labour market
flexibility, R&D in our universities, and the reputation of
those universities and high-research institutes. It is also about
the English language, the rule of law and all those factors in
combination; there is no one single factor that determines
whether investment moves in and out of a country. That is one
reason that, when one looks at the UK’s comparative advantage and
those factors, we see that—despite all the predictions of doom
about what would happen were we to leave the EU that were made at
the time of the referendum—the litmus test is that inward
investment has stayed up. In fact, there have been years when
this country has attracted more inward investment than France and
Germany together.
For me, one of the key litmus tests of how well an economy is
doing is the unemployment rate. We can all make mad predictions
about growth. Many international economic organisations, such as
the International Monetary Fund, have always got their growth
forecasts and so forth wrong. The litmus test of how well an
economy is doing—or certainly one of the litmus tests—is the
unemployment rate, and we should not forget that our unemployment
rate is nearly half that of the EU.
Having said that, I make a final plea to my hon. Friend the
Minister. Corporation tax is in the mix; it is not the only
determinant of where a business invests and the extent to which
it invests but it is an important determinant. At a point where
corporation tax will be increased by this Government, I ask him
to take this message back to his Department and to the
Chancellor—we are all making our own representations
independently of this Committee, but every little bit helps—and
to ensure that he gets the message across that, with the public
finances improving, the rise in corporation tax and the extent of
that rise needs to be revisited, because it is an important
determinant not just of the extent of inward investment to this
country but of how many people are employed. The more profitable
businesses are, the more we can pay for our public services and
the more people get employed. That is the consideration that I
ask the Minister to take from this Committee.
6.29pm
(Glasgow North) (SNP)
It is a pleasure to serve under your chairmanship, Mr Hollobone.
As the hon. Member for Ellesmere Port and Neston said, nobody is
going to object to any kind of rise in the minimum wage,
especially in these difficult times and given the inflationary
pressures being experienced across the economy, which I hope the
hon. Member for Basildon and Billericay will recognise are at
least in part the result of the extreme hard Brexit forced on
this country by the Conservative party, with the acquiescence of
the Labour party. He might be right that unemployment is low, but
I can show him businesses across the country and in my
constituency that are crying out for labour—for staff—because of
the labour shortages that have happened as a result of that hard
Brexit.
Mr Baron
I say this in the spirit in which the hon. Gentleman made his
point: he needs to see the bigger picture. It is quite
interesting that there is almost a balance between the number of
job vacancies and the number of people who are unemployed. That
actually suggests that the economy is doing quite well. There may
be a mismatch for whatever reason, but those vacancies are there;
we just need to ensure that we encourage people into work
more.
Indeed. There are plenty of asylum seekers in my constituency who
have a huge amount of skills and talent but are unable to deploy
them, because this Government will not give them the right to
work, earn a fair wage and pay tax back into the system. Perhaps
that is a place where we could start or, if the Government want
to make working more attractive, perhaps—getting to the heart of
the debate—people should be paid a fair day’s wage for a fair
day’s work.
We have heard about litmus tests, one of which is the rate of
unemployment. Does the hon. Gentleman agree that one litmus test
is whether workers have enough money to live on and to pay their
bills?
Yes, precisely. That is why the rises today are welcome, but they
are not necessarily sufficient for a lot of people.
The way in which the Government have co-opted the use of the term
“living wage” to describe their statutory minimum wage is
unfortunate. It causes a lot of confusion, and is particularly
unfair to people looking for a real living wage, which the Living
Wage Foundation has calculated since long before this Government
adopted that language and it consistently comes up with higher
rates; its proposals for the coming financial year are £10.90 an
hour for the UK as a whole and £11.95 in London. The £10.90
compared to the £10.42 might not, on paper, sound like a huge
difference but in reality, in a seven-hour day, that is about
£3.36 extra a day or, over a five-day week, £16.80 a week. That
starts to make a significant impact on the pound in people’s
pockets.
Of course, that is only the upper rate for workers aged over 23.
We agree entirely with the arguments being made for the extension
of a real living wage to everyone in employment without
distinction for their age. As other Members have said, people do
not pay differential prices when they go to the supermarket or
use consumer goods or utilities and so on. People should be paid
the same for the same kind of work.
The Government could be doing more, and they could learn from the
Scottish Government in that regard. The Scottish business pledge,
introduced by the Scottish Government, encourages employers to
pay the real living wage, to end zero-hours contracts and to take
action in their businesses to close the gender pay gap. The
Scottish Government also offer a wider social contract to
workers, including free prescriptions, tuition fees for their
children going to university, the Scottish child payment—which is
a real game-changer—the baby box and all the other actions that
show just how much we have been able to do with the powers of
devolution, and point to what we could achieve when Scotland
becomes independent.
As welcome as the rise today might be, it does not go far enough.
I do not think anyone in Scotland will look very much at what is
on offer from the Conservatives or, indeed, the Labour party and
think that this is as good as it gets.
6.34pm
I thank hon. Members for their valuable contributions during
today’s debate. As has been pointed out, these rises are more
important than ever in the context of the continued high
inflation and cost of living pressures. I am glad to see
cross-party agreement—largely—on the issue.
A number of points were raised, principally by the shadow
Minister, the hon. Member for Ellesmere Port and Neston. When the
Low Pay Commission made the recommendation of 9.7%, which we
fully accepted, inflation was at 8.9%, so the rise was greater in
most cases than inflation at the time. As the hon Member for
Ellesmere Port and Neston knows, this Government are committed to
halving inflation by the end of the year, so lots of people who
received those high pay increases, in percentage terms, will
benefit even more as a result of reduced inflation and a growing
economy. Creating more jobs is very important and eventually
leads to high wages, as my hon. Friend the Member for Basildon
and Billericay pointed out.
I am grateful to the Minister for explaining that the Low Pay
Commission recommended an above-inflation pay rate. We often hear
from Ministers that one reason that they cannot accede to pay
demands from various public sector unions is that anything
approaching the inflation rate would boost inflation even higher.
Does that not apply in this situation?
No, because this applies to a much smaller cohort. If the hon.
Gentleman is proposing that we pay everyone across the public
sector an inflation pay increase, which I guess he is from his
comment, he has to explain to the taxpayer how we will raise that
£28 billion a year, because that is what it would cost.
Obviously, the Low Pay Commission works with employer groups, but
it also works with business groups, other stakeholders and other
employers to try to strike a balance between what is affordable
for employers and what is an appropriate rise for those at the
bottom of the income scales.
The hon. Gentleman asked about our ambition to get to two thirds
of the median salary by 2024. That is certainly what we believe
to be attainable, and it remains our target. With the growing
economy that we expect to see by the end of the year, the
economic context will be a lot brighter than it has been over the
last few months.
On age limits, the hon. Gentleman is right; our ambition is to
lower the age limit in terms of access to the national living
wage, as we did from 25 to 23 in 2021, based on the Low Pay
Commission’s recommendation. We are hoping to lower it to 21 by
2024. Part of the reason that it is lower—other Members asked the
same question—is that there is no doubt that there is a greater
vulnerability for young people. Unemployment levels tend to be
higher in these lower age groups and it is important that we do
not price people of low age out of the market. That is probably
why Labour had different rates for 18 to 21-year-olds when it
introduced some of these provisions when it was in
government.
Let me turn to zero-hours contracts. Only 3% of the population is
on a zero-hours contract. Sixty-four per cent. of those people do
not want more hours, so the contracts kind of work for both
sides, but we recognise that there is an issue with exploitation
in some situations and we are trying to create the conditions for
a conversation between employers and employees while not putting
too great a burden on employers. That is why we are legislating
for a right to request predictable hours. We have already
legislated for things such as exclusivity clauses, which are not
allowed for zero-hours contracts. For those below the
lower-earnings limit, there cannot be an exclusivity clause in a
zero-hours contract.
On compliance, the hon. Gentleman was absolutely right. It is
very important to us, which is why we have doubled enforcement
since 2015. I have met His Majesty’s Revenue and Customs team to
discuss that. I welcome the fact that they have put £100 million
back in the pockets of lower-income workers since 2015 through
their excellent work. The care sector is one of the sectors they
look at all the time, and there was no differential between it
and any other sector. As far as employment law is concerned,
travel time to appointments should be covered within employment
law when it comes to calculating the national minimum wage or
national living wage.
We believe that internships should be paid positions and should
be subject to the national minimum wage or national living wage,
and that trial shifts should be no more than a few hours.
I did not quite catch what the Minister said about travel time.
Is he saying that care workers should be paid the same hourly
rate when they are travelling between domiciliary
appointments—paid at the full rate, effectively? Is that his
position?
Travel to appointments certainly should be calculated under
national minimum wage levels. That is our position under
employment regulations.
The hon. Member for Ellesmere Port and Neston was right to point
out that we have not named and shamed for some time. I am very
keen—I have had conversations about it today—to do that as soon
as possible. We hope to have some news very shortly about a list
of people who have not adhered to our national living wage
requirements.
We are still looking at the best way to create a single
enforcement body and whether it is right to do so given
parliamentary time. We also do not want to increase the costs of
enforcement. I work closely with the director of labour market
enforcement to ensure that she has all the measures at her
disposal and that there are no gaps in enforcement between
different areas.
My hon. Friend the Member for Basildon and Billericay is right
that research and development leads to higher productivity,
higher wages and higher growth. I support that 100%. He was the
only speaker other than me to point out the cost to business of
these measures, and it is disappointing that the contributions of
Opposition Members did not point out that business has to bear
this cost, which is about £2.5 billion for employers annually. He
also raised the very important point about corporation tax. Under
the new rules, 70% of businesses will not pay additional
corporation tax, because there is a small profits rate. Indeed,
in my 30 years in business, when corporation tax was at similar
levels, I cannot think of a time when our boardroom considered
not investing. Given a higher level of corporation tax than we
see today, we still felt that we could invest. I understand my
hon. Friend’s points, and I am sure that he will make them to the
relevant Department, which is of course the Treasury.
The hon. Member for Glasgow North talked about whether the rise
is sufficient for low-paid workers, and I understand his point. I
urge him, as I said before, also to consider employers in this
conversation. We have to ensure that we do not raise the national
living wage too quickly, which would cause problems for
employers. That could be detrimental to the labour market
generally and could have difficult consequences for some people
who work in these kinds of jobs.
I am a big fan of the Living Wage Foundation, and it is
absolutely right that we want the national living wage to
increase. The gap between the Living Wage Foundation level and
the national living wage is narrowing, and the Living Wage
Foundation has always been keen to point out that its campaign
for the national living wage is about trying to encourage
employers to pay higher wages on a voluntary rather than a
coercive basis.
From April, a full-time worker on the national living wage will
earn over £6,700 more before tax than in 2015, when the policy
was introduced, while younger workers and apprentices will also
benefit from large rate increases across the board. This package
of measures will have a huge, positive impact on the lives of
millions of people. It should also serve as a reminder of the
progress that can be made when Members across this House work
together. I commend the regulations to the Committee.
Question put and agreed to.
Resolved,
That the Committee has considered the draft National Minimum Wage
(Amendment) Regulations 2023
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