Sentencing (Pre-Consolidation Amendments) Bill [ Lords ]
Tuesday 17th March 2020
(4 years, 7 months ago)
General CommitteesRead Full debate Sentencing (Pre-consolidation Amendments) Act 2020 View all Sentencing (Pre-consolidation Amendments) Act 2020 Debates Read Hansard Text Read Debate Ministerial Extracts
The Chair
Before we begin, I will outline the procedure in Second Reading Committee, as it is an uncommon Committee. This Committee is charged with recommending to the House whether the Sentencing (Pre-consolidation Amendments) [Lords] Bill ought or ought not to be read a Second time. The debate in this Committee replaces a Second Reading debate in the House. After this Committee has made its recommendation, the Question on Second Reading in the House will be decided without further debate. The rules governing a Second Reading debate in the House apply in Second Reading Committees, so that in particular Members may speak more than once only by leave of the Committee, or through interventions. I call the Minister to move the motion.
The Parliamentary Under-Secretary of State for Justice (Chris Philp)
I beg to move,
That the Committee recommends that the Sentencing (Pre-consolidation Amendments) Bill [Lords] ought to be read a Second time.
As always, Dame Rosie, it is a great pleasure to serve under your chairmanship. The purpose of the Bill is to make amendments to existing sentencing legislation in order to facilitate the enactment of the Law Commission’s Sentencing Bill, which will consolidate the law governing sentencing procedure in England and Wales into a single Sentencing Code. Although the may be technical in nature, at its heart this legislation is about legal certainty. Hon. Members will agree that the law must be clear and accessible; unfortunately, it has become difficult to say that with any sincerity about the statute governing sentencing procedure. It is well known and understood in the legal community that this body of law has grown incredibly complex and disparate over the years, even for the most experienced practitioners. Sentencing legislation now runs to over 1,300 pages; judges and barristers alike say it is too complicated and needs to be consolidated. Indeed, it is noticeable in the Court of Appeal that quite a large number of appeals against sentences are successful not on the ground that the sentence is too lenient or too harsh, but on the ground that an error in law has been made, owing, we think, to the complexity of sentencing legislation. This Bill and the sentencing code that will follow it are designed to correct that uncertainty.
The sentencing code will bring together all the procedural provisions on which courts need to rely during the sentencing process, including those detailing the general legislative principles of sentencing and the types of sentence a sentencing court may impose. By bringing these provisions into one place and providing them with a coherent structure, the code will assist judges and legal professionals in identifying and applying sentencing procedural law. That will help to reduce the risk of error, appeals and delay in the sentencing process and improve the transparency of the process for the general public.
I cannot stress enough the significance of this to practitioners. The Law Commission was asked in 2014 to undertake a review, and the sentencing code, which has just been introduced in the House of Lords and which directly follows this Bill, was developed by the commission in the following years. The commission published its report in November 2018; it included a draft of this Bill and the separate Sentencing Bill, which will create the sentencing code. The main recommendation in the report was to enact both pieces of legislation, but before the Sentencing Bill can be enacted, technical changes to existing legislation are needed to facilitate the consolidation of sentencing procedure, and this Bill will make the necessary changes.
Robert Courts (Witney) (Con)
I declare an interest: I am one of those barristers who used to practise in the criminal courts and use the sentencing provisions in the statutes the Ministers refers to. I want to put it on the record that this legislation is long overdue and very welcome to judges, barristers and practitioners alike, and I look forward to scrutinising the detail.
Chris Philp
I am delighted that my hon. Friend feels that way. As we all know, he has a long and distinguished track record practising in the criminal courts, so he has direct experience of the current complexity. As he says, judges, academics, barristers and many others support the measures in the Bill before the Committee.
Andy Slaughter (Hammersmith) (Lab)
It is 20 years since I practised criminal law, but it was pretty confusing even then. I am glad it is was not just me who did not understand. I did not realise the scale of the problem until I read in the Library briefing that the survey conducted by the Law Commission found that sentences in 36% of its sample of cases were unlawful, so I agree that this measure is long overdue. Have the Government considered publishing what they regard as common mistakes made? If that is the level of incorrect sentencing that has been going on, there must be many more wrongly decided cases out there.
Chris Philp
Like my hon. Friend the Member for Witney, the hon. Member for Hammersmith has had a long and distinguished career as a practitioner of of the law, and we are always interested in what he has to say. The idea of identifying common mistakes and drawing them to the judiciary’s attention is a very good one. Perhaps my officials can work with the Judicial College and the Judicial Office to see whether a list of common errors could be compiled and circulated to the judiciary. A couple of studies have been done; the hon. Gentleman referred to one of them, another was done in 2012 looking at Court of Appeal overturns of unlawful sentences, and another by the Criminal Appeal Office in 2018. I am sure we could draw on that work to identify whether there are common themes, and if there are, the idea of drawing them to judges’ attention is an extremely good one. We will investigate the hon. Gentleman’s idea with a view to taking it further.
There are two substantive clauses in the Bill because the Bill does two things. First, clause 1 provides a “clean sweep”. It takes the existing sentencing procedures and ensures that sentences passed are in accordance with the law applicable at the time of the offence. It is not uncommon for sentencing courts to deal with offenders who committed offences several years previously, when a different sentencing regime applied. There are many examples of when this happens, and if the sentencing provisions have changed between the time of the offence and the time of sentencing, it is not immediately clear which provisions apply. As we have heard from two practitioners on this Committee, it is no wonder that barristers and judges are keen on change.
The so-called clean sweep mechanism provided in clause 1 attempts to remedy the anomaly by removing the need for the sentencing court to identify and apply historical versions of sentencing law. Instead it will apply the sentencing law prevailing at the time of sentence rather than at the time of offence. As a result, when an offender is convicted after the start of the new sentencing code, sentencing procedural law as enacted in the code will apply, regardless of when the offence was committed. However, from a common law and human rights point of view—an article 7 point of view—it is important to provide exceptions, to ensure that offenders sentenced under the sentencing code are not subject to a harsher penalty than they would have been had the sentencing law at the time of the offence applied. Although current sentencing law will apply, there is an exception if the minimum sentence or the maximum sentence has increased, to make sure that a harsher penalty is not applied. That respects an important common law principle, as well as an article 7 human right.
Maria Eagle (Garston and Halewood) (Lab)
Of course, when there is a moving target or a snap change is made, as the clean sweep does—it says, “Stop that. We start here.”—exceptions have to be made. However, we already have 12 categories of exception set out in the Bill. Will the Minister undertake to ensure that we do not have 50 or 100 categories by the time we reach the end of this process, thus building in complexity again? I understand the importance of the points he makes about the Human Rights Act and not doing rough justice under the common law, but if our aim is to put things right, we should keep it simple.
Chris Philp
The hon. Lady makes a good point. The aim is to simplify, yet we have these exceptions. A balance has to be struck. We cannot, as responsible legislators, do anything that violates the long-established common law right she refers to, or breaches human rights. We want to keep it as simple as possible. It is worth bearing in mind that sentencing law sets generally the maximum and in some cases the minimum sentences, but it is always up to the independent judiciary to decide exactly what sentence they hand down. I take the hon. Lady’s point about the exceptions, though. I hope we have enunciated those comprehensively, particularly in schedule 1 to the Bill, and that we will not have to add to them as rightly warns against.
The second substantive provision, clause 2, provides for various pre-consolidation amendments, which are listed in schedule 2. They are almost entirely highly technical in nature. They are explained in detail in the explanatory notes, but essentially they tidy up and correct small historical anomalies before the sentencing code is enacted. I will give one example to illustrate:references in schedule 9 to the Criminal Justice Act 2003 to now repealed petty sessions districts in Northern Ireland are replaced with references to their replacements, administrative court divisions. That is the sort of technical amendment we are making via schedule 2. There is a list in the explanatory notes that we can examine in more detail during the Committee stage of the Bill, if required.
Let me be clear: everything we are doing, both in this Bill and in the sentencing code that will follow, is essentially about clarifying and simplifying. In none of these provisions are we changing substantive sentencing law. It is a simplification exercise. Nothing is being changed in the way that sentencing policy operates. It is simply a clarification exercise, which is supported by the judiciary, barristers and academics. It has been scrutinised at some length in the other place, which has among its Members some very distinguished former judges, and it is the culmination of four or five years’ work by the Law Commission. I thank the commission for the extraordinary work it has done, especially the outgoing criminal law commissioner, David Ormerod, who led the work.
The Bill has one simple purpose: to pave the way for the sentencing code. That code will make the sentencing process easier, quicker and more transparent. The Sentencing Bill, which creates the code, was introduced in the House of Lords on 5 March under the special procedure reserved for Law Commission consolidation Bills. I commend the Bill to the Committee as an important and, some have said, long overdue step to simplify a very complicated area of law.
Bambos Charalambous (Enfield, Southgate) (Lab)
It is a pleasure to serve under your chairmanship, Dame Rosie. As the Minister set out, this is a largely technical and, as such, uncontroversial Bill to bring to fruition the Law Commission’s four years long project on consolidating sentencing legislation. The Opposition fully support the Government’s intention to conclude the commission’s work and will not oppose the motion. I too take this opportunity to thank the Law Commission for its work drafting the sentencing code, and the many others who fed into the process through the consulation and outreach work.
We all agree that sentencing legislation is overlong, complex and obscure, even to experienced legal professional and judges. It is clear that urgent change is needed. As the Law Commission pointed out, current sentencing legislation, with its sources in numerous places in legislation, runs to well over 1,300 pages and creates immense difficulties in understanding and access the relevant law. It is also widely disparate in the way in which it can be amended, as the Minister described. Some changes can be made by amending previous enactments, others by introducing their own enactments, and there are even some that modify the effects of other enactments without actually amending the wording of the provisions. The way these amendments are brought into force is just as inconsistent.
The Law Commission also highlighted the number of times that Parliament has amended sentencing legislation and the erratic way in which it has done it, which just compounds existing problems with the complexity of sentencing legislation. As the volume of changes and the pace at which they are made increase, it becomes ever more difficult first to locate the law and then to fully understand it. In fact, I think the only people who oppose the Bill are law librarians, who have the knack of identifying sources of legislation in obscure places.
The result of all this can quite simply be described as a near-dysfunctional mess that is a considerable problem for our legal system. It puts burdens on lawyers and judges, results in wrong sentencing decisions that subsequently need to be appealed, and requires additional court hearings which have a knock-on effect of delaying other hearings. That clogs up a system already straining under nearly a decade of cuts to courts and legal services.
Although those from a legal background who have wrestled with sentencing legislation and its many complexities will probably welcome these long overdue measures, the sentencing code offers substantially greater benefits than just making the lives of lawyers easier—although that is also to be commended. Consolidating legislation in a sentencing code could give the public confidence in sentencing procedure. We accept that it is not possible for the legal system to be infallible all the time; that is why the appeals process exists. But when it is found that more than one in three of the cases assessed by the Law Commission in the criminal division of the Court of Appeal in 2012 involved sentences that the court simply should not have made, it is inevitable that public confidence takes a knock.
The public must feel secure in the belief that sentencing decisions are the correct decisions as often as possible. By addressing the immense complexity and inconsistencies with sentencing legislation, the sentencing code can give them that confidence, but if the public are to properly have confidence in sentencing, they must also have confidence in those handing down the sentences, so the Government must not repeat their reckless encouragement of partisan attacks on our independent judiciary.
Although we accept the need for the sentencing code set out by the Law Commission and we support the Government in bringing it to this House, we are concerned about the time that it has taken to reach us—a point raised by the aptly named Lord Judge, a former Lord Chief Justice who expressed disappointment on its slow progress. The Law Commission published its report on the sentencing code project in November 2018 and the draft Bills that they included are innocuous and uncontroversial pieces of legislation. As a consolidating measure, procedures available allow this Bill to be heard in a Second Reading Committee, as we are doing today, with time not needing to be made available in the Main Chamber. Will the Minister tell us what caused the delay in enacting the Law Commission’s sentencing code? How many offenders since November 2018 have handed sentences that were unlawful, too short or too long as a result of the complexities of the current sentencing legislation?
Broadly speaking, however, we support the Government in bringing forward both this Bill and the Sentencing Bill that will fully enact the sentencing code, which is awaiting its Second Reading in the other place. We also support any measures that will simplify our sentencing system and will benefit the legal process, legal professionals, the judiciary, and ultimately, the public. We support this Bill being given a Second Reading.
Chris Philp
With the permission of the Committee, Dame Rosie, I thank the hon. Member for Enfield, Southgate for his considered support for the Bill. It is very welcome indeed, and I am glad that we can work together in a spirit of co-operation to get it through the House. He mentioned a delay. He is right that the Law Commission report was published in November 2018. In fairness to my predecessors, I should say that 2018 was a rather eventful year in Parliament, with quite a lot going on, including a change of Prime Minister and a general election, along with various other things. As a result, matters progressed through Parliament a little more slowly than they might otherwise have done. The Bill was introduced in May 2019, carried over and then had to be reintroduced after Dissolution. It has suffered from the political turbulence of the past 12 months, but we are here now and want to get it passed as quickly as possible. I am grateful for the Opposition’s support for the Bill and look forward to working with them to get it on to the statute book quickly.
Question put and agreed to.
Draft Electrical Safety Standards in the Private Rented Sector (England) Regulations 2020
(4 years, 7 months ago)
General CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Luke Hall)
I beg to move,
That the Committee has considered the draft Electrical Safety Standards in the Private Rented Sector (England) Regulations 2020.
It is a pleasure to serve under your chairmanship, Ms Nokes. This Government are committed to ensuring that private tenants live in safe, secure and high-quality properties. We truly value the contribution that responsible private landlords make to the housing market and the private rented sector. The majority of private rented houses and flats are well maintained and offer safe accommodation to tenants. However, there are still unscrupulous landlords who wilfully flout their responsibilities and put their tenants at significant risk of harm. At present, only 60% of privately rented homes have all the recommended electrical safety features installed—modern PVC wiring, modern earthing, modern consumer units, miniature circuit breakers and residual current devices—compared with 75% of social housing. That is why these regulations are so important.
The regulations will require all landlords to do what good landlords are already doing: make sure that electrical installations in their rented properties are safe. The regulations form part of the Government’s work to improve safety in all buildings. They will drive up standards, reduce deaths and injuries caused by electrical faults, make tenants safer and help to level the playing field for the majority of good landlords who already provide decent rented properties. Landlords who choose to not comply with the vital safety measures in these regulations will have to improve or leave the business.
These regulations will apply to all new tenancies from July 2020 and to all existing tenancies from April 2021. They will require landlords to have the electrical installations in their properties inspected and tested at least every five years by a person who is qualified and competent. Landlords will have to provide a copy of the electrical safety report to their tenants and to their local authority if requested. If a report requires investigative or remedial works, landlords will have to carry those out. In practice, if a report does not require investigative or remedial works, the landlord will not be required to carry out any further work. Some landlords may already be complying with the requirements in the regulations—for example, where they have already had an inspection, where the electrical safety standards are being met and where no remedial work is required. Those proactive and responsible landlords may not need to take any further action when the regulations come into force.
In addition to requiring remedial work, reports can recommend improvements. If a report only recommends improvements but does not require any further investigative or remedial work to be carried out, although it would be good practice to carry out that work, it will not be required in order to comply with the regulations. In this way, we have ensured that the requirements are proportionate.
Because these regulations are so important, local authorities will have strong legal enforcement powers. They will have the power to require landlords to carry out remedial works, or even arrange the works themselves and recover the cost from the landlord. They will be able to decide on the appropriate penalty for landlords who do not comply, with the power to issue a financial penalty of up to £30,000. This is because those local authorities know their areas best and can make serious decisions about the unscrupulous landlords who are undercutting those who already provide safe and secure accommodation. Local authorities can see the severity of the issue and will know best how to tackle irresponsible landlords in their areas. Landlords will, of course, have a right of appeal against enforcement action. Local authorities will be able to keep the proceedings of financial penalties for enforcement purposes, allowing them to keep up the good work, driving up standards and contributing to their long-term financial stability.
The majority of landlords are proactive when it comes to ensuring the safety of their tenants, so the requirements in these regulations will not put an additional burden on those landlords, who make a welcome contribution to the housing market. However, it is of course reasonable to expect all landlords to make sure their tenants are safe from the risk of electrocution or fire. These regulations are important, because they will increase tenant safety and make the private rented sector fairer for those good landlords who are already concerned with tenant safety. Accordingly, I hope the Committee will support them.
Sarah Jones (Croydon Central) (Lab)
It is a pleasure to serve under your chairmanship, Ms Nokes. The Opposition welcome these regulations, which are an example of good regulation that will protect tenants in their homes and landlords’ properties and is not overly burdensome. I am grateful to the Minister for laying out the Government’s case, and we will not be contesting this measure. However, I want to seek clarity on a number of points.
First, it is four years, almost to the day, since the measure was tabled as an amendment to the Housing and Planning Act 2016. That seems astonishing when we consider the fact that it has cross-party support, having first been tabled by Labour’s Baroness Hayter and Lib Dem Lord Tope, and later adopted by the Government. One of the reasons for the Government accepting it was the evidence showing the huge gulf between the number of gas and electrical fires in properties.
A private renter is 10 times more likely to experience an electrical fire than a gas one. Data from the London Fire Brigade compiled by the campaign group Electrical Safety First shows that in London alone there have been at least 1,169 fires caused by electrics since 2010, compared with just 131 caused by gas. We also know from the data that since 2016, when the measure could have been enacted, there have been more than 400 fires in private rented properties in London alone.
Those fires could have been avoided had the draft regulations been introduced more quickly. Such fires not only result in avoidable costs for tenants and landlords, but could involve injury or even death. Electrical Safety First has found that around 350,000 people are injured and 70 killed in the UK by electrical accidents every year. It would be good to understand why we have had such a delay. It might be, in part, because today’s Minister is, with respect, the 10th in 10 years. The lack of continuity has meant that the measure has fallen by the wayside when we could have implemented it much sooner.
All Members present will agree that regulations are not worth the paper on which they are written unless they can be properly enforced. Our councils have suffered billions in cuts under this Government, losing 60p in every pound that they used to receive from the Government to spend on services. It is disappointing that the Government are placing the burden of enforcement solely on local authorities, without any additional funding for that enforcement. Scotland and Wales have successfully implemented a system that uses first-tier tribunals rather than council environmental health teams. Did the Minister assess the success of those systems before deciding to place the burden on councils? Can he confirm the number of cases brought to the first-tier tribunal in Scotland since the Housing (Scotland) Act 2014?
An investigation by Unison last year found that environmental health budgets have more than halved in the last decade, as have visits from environmental health officers. We have heard a lot about public health in the last few weeks, and we will hear more as coronavirus spreads. It is worth bearing in mind that environmental health teams cover a wide spectrum of health and safety in our communities, not just housing.
I was the shadow Minister for the Tenant Fees Act 2019, and concerns were raised on Report about the ability of councils to fund enforcement, particularly in the first year. The Government eventually agreed to provide £500,000 of funding for local authorities for enforcement in the first year, with fines funding enforcement from year two. Has similar funding been considered or agreed for councils this year?
In my borough in Croydon, and elsewhere, borough-wide landlord licensing has meant that the council can already require electrical safety checks as a condition of the licence, with enforcement funded through the licence fee, but the Government have indicated that they will not continue to support borough-wide licensing, meaning that funding for that enforcement will decline in such places as Croydon. How does the Minister intend to plug that funding gap?
Unlike similar regulations in Scotland, the draft regulations do not include the portable appliance testing of electrical appliances included as part of the let, such as white goods. Although the Government have chosen not to make it mandatory, would the Minister consider adding a recommendation for landlords to PAT test their goods, as well as guidance for both landlords and tenants to check for product recalls on any of the electrical appliances in their properties?
Homes in the private rented sector are more likely to have a higher proportion of second-hand white goods, and we know the dangers that faulty white goods can create. A fire in a Shepherd’s Bush tower block in 2016 was caused by a Whirlpool tumble dryer, and the Grenfell Tower inquiry is looking at a Hotpoint fridge-freezer as a potential cause of the fire that killed 72 people. Whirlpool commenced a series of product recalls last year, but many tenants could be left with faulty, dangerous products in their properties that were bought by the landlord and forgotten about. Tenants could be entitled to a new, safe replacement. Surely it makes sense for the Government to take the opportunity to remind them of that if they will not enforce the PAT testing of appliances.
I will make a few final brief points, which I hope the Minister will respond to—if not today, then perhaps in writing. I mentioned the Grenfell Tower, which was, of course, a social housing block. Electrical Safety First has pointed out that the draft regulations will not apply to social housing. Although many councils and housing associations will already be doing the right thing and requiring the checks, it seems unfair to yet again treat social housing tenants as if deserving of a lower standard of safety. Will the Government consider extending the measure to social housing?
On enforcement, section 40 of the Housing and Planning Act 2016 makes provision for rent repayments in certain cases, including failure to comply with an enforcement notice. Regulation 3 refers to “remedial action”. Will failure to take remedial action constitute grounds for rent repayment?
Although we wholeheartedly support the regulations, we would go further to help the 4.5 million households in the private rented sector who, for too long, have not had the support they deserve. We need to face up to the fact that support for private renters has been sparse under this Government. It has taken four years to enact this relatively minor and non-contentious measure, and there have been a series of promises from the last Secretary of State that we are yet to see progress on, including the promise, almost a year ago, to abolish no-fault evictions.
During the general election, the Opposition set out plans for a new property MOT for landlords. It would have brought together existing requirements for gas and electrical safety with new checks to ensure homes are fit for habitation. Under our proposals, like with a vehicle, landlords who failed the check would not be allowed to let their property. Non-compliance is a really serious issue. Will the Minister consider going beyond fines as a penalty and consider banning landlords from letting properties?
Those most affected by rogue landlords are those who have borne the brunt of Government policy decisions since 2010—those on the lowest incomes. We support the regulations, but we would go much further to ensure everyone gets the basic right of access to a safe, secure home.
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
It is a pleasure to serve under your chairmanship, Ms Nokes. Like my hon. Friend the Member for Croydon Central, I warmly welcome the regulations. They are long overdue; it has taken a very long time to get here. It is shocking that in this country, tenants can still rent a property without any assurance about electrical safety.
My hon. Friend discussed the 400 fires that have occurred in private rented properties. I am particularly concerned about electric fan heaters. They are a major cause of fires, although they are not covered directly here. A few years ago, of 11 fires in the London area, three were down to fan heaters. That was not necessarily down to the landlord—I do not have the detail—but it goes to show what can happen if something goes badly wrong with an electrical appliance.
That brings me to the issue of PAT tests, which my hon. Friend raised. It is all very well having good wiring in a property—that is vital, of course—but if a single appliance has a problem, there can be a serious issue. In parts of the country where young professionals are passing through on short-term lets in single rooms in a property with shared electrical facilities, landlords are probably not checking every appliance. They are certainly not doing PAT tests; they are not required to. I urge the Minister—I know he is new in his post; I hope he stays a bit longer than any of his predecessors, which will not be difficult to achieve—to look at that issue and to respond to that serious point.
John Spellar (Warley) (Lab)
The missing part in this is who is actually doing the testing. There seems to be a serious gap in the regulations on the requirement for that person to be professionally competent. There is talk about issuing guidelines and all the rest of it, but there is precious little detail.
Meg Hillier
I thank my right hon. Friend for that intervention. He has read my mind—that is one of my other concerns. It is a really long-awaited measure and yet it is full of holes.
I am sorry, Ms Nokes—I should declare an interest. I let a property so I know a bit of what I speak. It is in the register of interests. I mentioned PAT tests. Good landlords should maintain high standards but, as my hon. Friend highlighted, finding someone with the right qualification to do this work and knowing that the recommendations they make are the right ones is a challenge. It is important. I hope the Minister, in guidance if not in the regulations at this late stage, will be able to look at the standards that electricians should be maintaining.
Even where someone has an electrician to visit a property or their home to have something done, standards change over time. Standards have changed even in the last decade or so. Perhaps the fuse box or other elements of electrical equipment may need to be altered. If that work is done piecemeal or by somebody with a lower qualification, there is a real concern.
The law did change—all electrical installations in any property, rented or otherwise, need to be done by a qualified electrician. For landlords, there is a public safety interest as well. It is not the same as in a private home. A landlord is acting to keep a place safe for a third party. It is important that we have slightly higher standards of inspection at that point.
The other issue I am concerned about is enforcement. In part 2, regulation 3(3)(c) says that the landlord is to
“supply a copy of the report”—
the one that my right hon. Friend and I were discussing—
“to the local housing authority within 7 days of receiving a request in writing for it from that authority”.
That is all very well, but given the squeeze on local authorities, highlighted by my hon. Friend the Member for Croydon Central, and on environmental health, I cannot envisage that councils will have the resources to run around trying to find where landlords are and ask them whether their properties are safe. Of all the things that landlords do for tenants’ safety, electrical safety will be at the top of the list of importance.
Does the tenant therefore alert the local authority? In an ideal world, yes, but we all know that there are unscrupulous landlords who will inflict punishment on tenants for making a single complaint to the local authority—and anyway, that is reliant on the local authority having the resources to act in time and do something about it if it does not receive a report within seven days or considers it to be in some way inadequate. The enforcement element of the regulations is very light.
My hon. Friend also mentioned new burdens. I am sure the Minister will have done a new burdens assessment or required to see one on local government. This paragraph alone will provide a significant new burden, let alone the overall responsibility for ensuring that properties in an area are safe. At the same time, the Government have clamped down on local licensing regimes and refused to set in place even a basic national licensing programme.
Licensing can be another burden on local government, but basic modern safety standards for private rented housing are long overdue. I urge the Minister, early in his career with responsibility for housing—hopefully his career will be longer than his predecessors’—to look seriously at this issue. We have individual licensing schemes around the country that vary greatly, with no basic minimum standards other than those required by other parts of the law. We keep adding bits to legislation, like on a Christmas tree, without seeing coherently what should be at front and centre. A private let property is a home for the tenant living there, and they should be safe and secure at all times in the home in which they live. There are so many holes in the system.
I turn to the fine of up to £30,000. Is that how local government is expected to fund this measure? That will require local government to find some very bad transgressors quite quickly to get the money in to pay for staff time alone to ensure its implementation. We can all talk warm words about how vital it is to have this measure on the statute book, but how will it be delivered?
Finally, we are in the grip of a deadly killer in coronavirus, where households will self-isolate and professionals—however well qualified—will struggle to manage their workload; indeed, they may not want to leave their own homes. In part 3, regulation 5(2), on the duty of a private landlord to comply with a remedial notice, says:
“A private landlord is not to be taken to be in breach of the duty under paragraph (1) if the private landlord can show they have taken all reasonable steps to comply with that duty.”
Nothing should let an irresponsible landlord off the hook. However, given the timeframe involved, with the regulations coming into force in June for all new tenancies from July, and the severe restrictions on British society because of the coronavirus situation, it might be challenging for some good landlords—possibly bad ones, too—to comply. Will the Minister be crystal clear about whether “reasonable steps” will cover the serious state we are in now? Will he also make clear how he will ensure that unscrupulous landlords do not use that as a get-out clause for doing what is proper and right in the interests of private tenants?
John Spellar
May I probe the Minister a bit further about who will do inspections? I hope he may intervene to satisfy me on that. The regulations talk about a “qualified person” but the explanatory memorandum says that the Department decided
“not to introduce a mandatory competent person scheme”.
I would not argue that the Department should set up its own mandatory competence scheme, but they are already out there in the industry, in the same way as they are in the gas industry. It is not necessarily for the Department and the Minister to identify one particular qualifying organisation, but what I find slightly odd is the fact that they are not requiring that someone qualified under part P must have a qualification from the National Inspection Council for Electrical Installation Contracting or whoever in order to be able to undertake such work—as far as I recall, it is already required for certifying a new electrical installation. That is also a protection for the landlord against people who might purport to have such qualifications—unless they produce a fraudulent certificate, but that is a different danger and another issue. It would surely benefit the tenants and local authorities to have somebody sign off and give their registration number, which can be checked if there are subsequent problems.
Meg Hillier
My right hon. Friend raises a really important point. If we are trying to reduce the burden on local authorities while protecting tenants, a trusted trader scheme or a trusted inspection scheme can cut through some of the bureaucracy that local government may otherwise feel the need to introduce. Actually, local government does not have the resources to do that. Surely he would agree that that would be cost-effective to the taxpayer all round.
John Spellar
Very much so; it makes the local authorities’ job much easier. We already have a well-regulated scheme for training and for testing the competence of people working in the industry—for very good reasons, given the inherent dangers of electricity. As I said, I understand that people might produce fraudulent certificates and so on, but that can be dealt with in a different way. This approach would make it much easier for local authorities to say to a landlord, “Where’s your certificate?” and, if they have their suspicions, to check back on that or even to check on the individual. It cuts out a huge amount and does not require the Department, local authorities or consortiums of local authorities to pull that together.
If I may say bluntly to the Minister, this process seems to have a bit of a feel of, “We’re against the big state and bureaucracy.” This would cut bureaucracy, but we still have to cut through to the idea that having proper qualifications, regulation and checking is enormously important. It facilitates commerce, rather than inhibits it, but it also provides a lot of reassurance to all the parties involved.
Luke Hall
I am grateful for the contributions to the debate. I am certainly grateful for what sounds like support for the principle of introducing the regulations but, understandably, a number of questions have been raised.
All Opposition colleagues asked why this has taken so long. We wanted to introduce them early in this Parliament, having announced in July 2018 that we would introduce mandatory requirements. I hope all Members will appreciate that there have been parliamentary challenges on time over the past couple of years, but we have been using this time to work closely with experts in the sector, carefully considering some of the complex issues that we have talked about in the debate to ensure that what we are introducing is proportionate. Delivering the regulations early in this Parliament has been a priority.
We have heard a couple of questions about how landlords will know that an electrician is a qualified and competent person. We will ensure that landlords know that an electrician is a qualified and competent person. Before the regulations come into force, guidance on this specific issue will be published for landlords. I will make a note to ensure that the Members who have spoken in the debate are notified when that guidance is published.
Meg Hillier
I thank the Minister for alerting colleagues in the room—presumably others will pick this up—but we are now in mid-March. The regulations come into force in June, but landlords will want to make plans to get the tests done. When will the Minister provide that information? Will it be in time for landlords to know exactly who they should ask to do such work?
Luke Hall
I cannot give the hon. Member a specific date, but I will respond to her in writing on a number of the issues that she and others have raised. I will do my best to provide a date as soon as possible.
The right hon. Member for Warley mentioned the idea of competent person schemes and the principle of trusted trader schemes. We will be encouraging industry to establish competent person schemes but membership of them will not be compulsory, to ensure that there is no further pressure placed on industry nor burdens placed on inspectors or customers.
John Spellar
That is not necessary. Electricians are already highly regulated under all sorts of electrical legislation. They also have to be trained and to pass competency tests. They get certificates indicating their level of competency: some are competent to install, some to supervise and some to test. The industry already has this, and there is no need to create a new structure. Why does the Minister not just say that there are long-established regulatory bodies, and we will use their certification and schemes to establish competency? I honestly do not see the logical problem he is facing.
Luke Hall
As I say, before the regulations come into force we will be publishing guidance. I will look closely at the issues, but the guidance can be used before employing inspectors and testers to ensure that the person is competent. Of course, I will take the right hon. Gentleman’s point away.
A number of Members raised the issue of PAT testing. They are right to point out that that has not been included in the draft regulations because of the variety of electrical appliances and because the use of one single mandated approach has not been considered practical. The Chair of the Public Accounts Committee has asked to me to look at that issue, which I am happy to do. I will report back to her on that point.
The Opposition Front-Bench spokesperson talked about the importance of not only considering the private rented sector in our work, but considering the social sector as well. She is right to make that point. We all acknowledge that the standards in the private rented sectors are significantly lower in some incidences than in the social sector, so the draft regulations target that sector, but we will be separately considering measures for social rented properties. I am happy to work with the hon. Lady and continue discussions as we move through this Parliament about how we can best achieve that.
Hon. Members also talked about how the regulations will be funded. Local authority environmental health departments are already responsible for enforcing electrical safety standards in the private rented sector. The new regulations will make it simpler for local authorities to do this because landlords will now have to provide them with proof that their electrics are safe. Local authorities will also be able to keep any money raised from financial penalties to fund those activities.
There was also a question about the first-tier tribunal, instead of enforcement, and about the system in Scotland and the number of cases. I do not have that information to hand, but I will find it and make sure it is reported back to the hon. Member for Croydon Central after the debate.
I am pleased that we have general support for the regulations and for our work to improve the private rented sector. I think we all agree that this is timely and overdue, and it is right we are bringing it forward this morning. We rightly heard that 871 people were injured in England in electrical fires in the home in 2016-17, and 16 people died. In a five-year period, the London Fire Brigade dealt with 748 fires caused by electrics. In the same period, only 97 fires it dealt with in London were caused by gas.
We have heard the discrepancies and disparities between the social rented sector and the private rented sector. Although there is a compelling case for change, it is right that we put on record the important contribution that private landlords make to the housing market. The majority of landlords in England provide well-maintained and safe accommodation for their tenants, allowing them to put down roots and thrive in their communities. However, we must ensure that all landlords, not just the good ones, are meeting standards of electrical safety. We want irresponsible and unscrupulous landlords who wilfully disregard their responsibilities and rent out dangerous properties to change their behaviour or leave the business. That will help level the playing field and helps support good landlords to deliver the homes that our country needs. The regulations are an important part of our wider reform programme, which seeks to level up the private rented sector, making it fairer, safer and more secure.
Meg Hillier
I thank the Minister for giving way again. I raised the issue of new burdens. We recognise that in certain parts of the country there are clusters of poor landlords, who need to be driven out. The challenge, though, is for local authorities, because they are going to have to pay up front for the inspections for the work before they get any money from the fines. Some of those landlords may well be the sort of fly-by-night people from whom it is very difficult to extract the fine at all, because they will find a way of dodging it by going bankrupt or whatever, or they often have properties in the name of other family members. How is the Minister going to make sure that local government can afford to get on with this job, and has he considered the new burdens?
Luke Hall
I thank the hon. Lady for making that point. The House has secured the most positive local government finance settlement for 10 years, a £2.9 billion increase in funding for local authorities. We are quite clear that that will not resolve all of the pressures on local authorities, but that settlement—a 4.4% real-terms increase in support for local government—has been welcomed by the sector, and we think they do have the resources they need. We accept that they are—
Meg Hillier
I apologise for intervening on the Minister again, but the new burdens rules are very clear. If there is a new requirement for local government to act, the Department has to make sure that the Treasury provides the necessary money to local government for at least 12 months after the new burden is introduced. If he cannot answer now, perhaps he could write to us with that information, but this is vitally important, particularly in areas with large swathes of unscrupulous landlords where it will be costly for the local authority to act when, quite rightly, they will want to do so.
As Chair of the Public Accounts Committee, I must pick the Minister up on the fact that Minister after Minister stands at the Dispatch Box and tells us that local government has had its biggest financial settlement in cash terms for the past decade. That is because local authority funding has been cut back so ruthlessly over the past decade—by 40%, in my own local authority’s case—so that does not go anywhere near filling the gap. There is still a huge squeeze on local authorities, and they certainly do not have money swilling around to deal with this as a huge priority above everything else. Although it is vital that they deal with it, they are having to face Hobson’s choice, so will the Minister undertake to look at those new burden issues? I am sure it has been done already, but if he cannot tell me now, perhaps he could write to me.
Luke Hall
I will write to the hon. Lady with that information. She is right, by the way, that we do not think this latest settlement solves all the pressures that local government is facing. The Secretary of State made that very clear when we brought the settlement before the House a couple of weeks ago, so we completely appreciate that point. We do think, though, that it is the most positive settlement for a few years, and are pleased that it has been welcomed and supported by the whole House for the first time in a number of years. We will absolutely consider the points that the hon. Lady has made.
I am grateful that the Committee seems to support these vital regulations, and I will pick up on the points that have been raised. They will drive up standards and reduce injuries in the private rented sector, so I am grateful for the Committee’s support.
Question put and agreed to.
Resolved,
That the Committee has considered the draft Electrical Safety Standards in the Private Rented Sector (England) Regulations 2020.
Draft Buckinghamshire (Structural Changes) (Supplementary Provision and Amendment) Order 2020
(4 years, 7 months ago)
General CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Luke Hall)
I beg to move,
That the Committee has considered the draft Buckinghamshire (Structural Changes) (Supplementary Provision and Amendment) Order 2020.
This order was laid before the House on 24 February 2020. If approved and made, it will update the membership arrangements for the conservation board of the Chilterns area of outstanding natural beauty to take account of the restructuring of local government in Buckinghamshire. We expect this to be the final statutory instrument connected to local government restructuring in Buckinghamshire.
The order bringing about local government reorganisation in Buckinghamshire came into force on 23 May 2019. It provided for a reorganisation date of 1 April 2020, when the new Buckinghamshire Council will assume the full range of local authority responsibilities and the five existing councils—the county council and four district councils—will be wound up and abolished.
That order established a shadow authority and shadow executive, which has been managing the transition to the new council. I am very pleased that all the councils have been working closely together to deliver the new unitary council, and I take this opportunity to thank them for their hard work and dedication during this period. We look forward to seeing the new Buckinghamshire Council flourish and deliver the high-quality services that its residents deserve.
The conservation board of the Chilterns area of outstanding natural beauty is made up of members appointed by the relevant local councils, parish council representatives and members nominated by the Secretary of State for Environment, Food and Rural Affairs, following open national competition. The board’s composition is set out in the Chilterns Area of Outstanding Natural Beauty (Establishment of Conservation Board) Order 2004. The board is responsible for conserving and enhancing the natural beauty of the Chilterns and increasing the understanding and enjoyment of their special qualities.
Local government restructuring in Buckinghamshire will abolish all five of the Buckinghamshire councils that nominate a member of the Chiltern AONB conservation board, and some changes are needed to the membership arrangements to take account of those changes to local government. The Chilterns AONB conservation board currently has a total membership of 27: one representative for each of the 13 councils specified in schedule 1 to the 2004 order; two parish council members for each of Buckinghamshire, Hertfordshire and Oxfordshire; and eight members nominated by the Secretary of State for Environment, Food and Rural Affairs.
Without this order, the new Buckinghamshire Council would be able to appoint only one member to the conservation board. However, 50% of the area of the Chilterns AONB falls within Buckinghamshire Council’s boundaries. The shadow executive of Buckinghamshire Council has requested that the status quo be maintained so that the new council will nominate five members to the board, to provide adequate representation for the area. It considers that the current membership arrangements, with five board members for the area of Buckinghamshire as a whole, better reflect the extent of the AONB that falls within the new council area.
The Countryside and Rights of Way Act 2000 specifies that at least 40% of the AONB board membership must be from local authorities and at least 20% from parish councils. These changes ensure that that requirement continues to be met. There are no other changes to membership of the board.
In conclusion, this order will amend the membership arrangements for the board of the Chilterns AONB to retain a total of 13 members nominated by local councils, five of which are nominated from the Buckinghamshire area. There are no changes to membership of the board otherwise. This ensures that the new Buckinghamshire Council is able to nominate a number of members that is commensurate with having 50% of the AONB within its borders and that local authority membership complies with the requirements of the 2000 Act. The order delivers on that objective and I commend it to the Committee.
Jim McMahon (Oldham West and Royton) (Lab/Co-op)
I appreciate that the Minister has a number of more pressing issues to deal with at the moment, so I do not intend to speak other than to confirm that the Opposition do not intend to divide the Committee on this issue.
The Chair
Right. Well, this has been a very long and difficult debate.
Question put and agreed to.
Draft National Minimum Wage (Amendment) Regulations 2020
Draft National Minimum Wage (Amendment) (No. 2) Regulations 2020
(4 years, 7 months ago)
General CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Paul Scully)
I beg to move,
That the Committee has considered the draft National Minimum Wage (Amendment) Regulations 2020.
The Chair
With this it will be convenient to consider the draft National Minimum Wage (Amendment) (No. 2) Regulations 2020.
The Minister will speak to both instruments. At the end of the debate, I will ask him to move the second motion formally.
Paul Scully
It is a pleasure to serve under your chairmanship, Mr Paisley. One of the Government’s proudest achievements is creating millions more jobs since 2010. We are determined to make the UK the best place in the world to work. As announced in the Queen’s Speech, we will bring forward an employment Bill to deliver the greatest reform of workers’ rights in more than 20 years. Our approach is to balance the needs of workers and employers. These regulations, concerning the national minimum wage and the national living wage, are crucial to that approach.
We are helping to protect low-paid workers while supporting employers to comply with the legislation. We have a labour market to be proud of. Our employment rate is at 76.5%, a record high, and unemployment is 3.8%, which is lower than this time last year. Since 2010, the national minimum wage has increased faster than average wages and inflation, meaning more money for the lowest paid workers. The regulations will increase the rates of the national minimum wage and the national living wage from 1 April, which we estimate will lead to a pay rise for about 2.4 million workers.
I am delighted to say that we have accepted all the recommendations made by the Low Pay Commission. That independent expert body brings together the views of businesses and workers and, informed by research and analysis, reaches a consensus on that advice. I place on record my gratitude for its work.
The regulations will increase the national living wage for those aged 25 and over by 51p to £8.72 an hour. That increase of 6.2% means that the national living wage is projected to meet the Government’s target of reaching 60% of median earnings in 2020. A full-time worker on that rate will be more than £930 better off over the course of the year.
The regulations also increase the rates for younger workers and apprentices. Those aged between 21 and 24 will be entitled to a minimum hourly rate of £8.20, a 50p increase. Workers aged between 18 and 20 will receive an extra 30p an hour, taking their rate to £6.45. Under-18s will earn at least £4.55 an hour—a 20p increase. Apprentices aged under 19 or in the first year of their apprenticeship will receive an increase of 6.5%, meaning an hourly rate of £4.15.
The regulations also change the amount that employers can charge workers for accommodation without it affecting their pay for national minimum wage purposes. From April, that will increase to £8.20 a day.
Looking ahead, the Government have pledged to raise minimum wages further. In our manifesto, we set a new target for the national living wage of two thirds of median earnings by 2024. The Low Pay Commission will continue to have a central role in taking economic conditions into account and advising the Government on this ambitious target, ensuring that the lowest paid benefit from the increases. To improve fairness for younger workers, we will apply the national living wage to workers aged 23 and over by 2021, and to those aged 21 and over by 2024.
The first step was changing the law. We need to ensure that all workers know they are entitled to the minimum wage and that all employers know that they must pay it. The Government run an annual campaign to increase awareness. Last year, we spent £1.1 million reaching workers and employers through posters and billboards, as well as digital and online channels.
We know that most businesses pay at least the statutory minimum wage, but we take tough action against the minority of employers who underpay their workers. Since 2015, we have more than doubled our investment in minimum wage compliance and enforcement activities to £27.4 million. Such an increase in the budget allows Her Majesty’s Revenue and Customs to focus on tackling the most serious cases of non-compliance while educating employers to comply. HMRC follows up every worker complaint it receives, even those that are anonymous. It conducts proactive enforcement in sectors or areas where there is a higher risk of workers not being paid the legal minimum wage. In 2018-19, HMRC identified a record £24.4 million in pay arrears for more than 220,000 workers, and issued more than £17 million in penalties for non-compliant employers.
In February, we announced the recommencement of the national minimum wage naming scheme. Publicly naming employers who do not adhere to the rules remains an important part of our enforcement and compliance toolkit for the minimum wage. From now on, any firm that owes minimum wage arrears of more than £500 to its workforce can be named. To help educate employers, future naming rounds will be supported by a quarterly educational bulletin to highlight details of common compliance issues.
We are also acutely aware of the burden that regulations, including the minimum wage, place on business. As the level of the national living wage enters new territory, we want to make sure that the rules are as straightforward as possible. So long as workers are getting the wages they are entitled to, we want to make it easier for businesses to comply with the law. That is why I am also presenting regulations that will aid business compliance.
We have worked closely with stakeholders to identify areas of the national minimum wage rules that add complexity for employers, without providing clear protections or benefits to workers. Employers, particularly in the retail sector, told us that some aspects of the rules can be particularly and unnecessarily difficult to comply with. We have listened to those views. Following a review of evidence from the consultation on salaried workers and salary sacrifice schemes, the changes to the regulations will support businesses who employ salaried hours workers. Changes have been considered only where they maintain or enhance protections or benefits to workers.
Currently, low-paid salaried workers cannot be paid in fortnightly or four-weekly cycles without their employer risking a breach of regulations. Similarly, if companies were to pay such salaried staff extra for working a bank holiday shift, there is a risk of breaching regulations. The amended regulations widen the range of pay arrangements that are compatible with workers being treated as salaried hours workers from 6 April 2020. That will help preserve certain pay arrangements that are valued by many workers.
The regulations also make a small change to the rules on workers making purchases from their employer—for example, where a clothing retail worker buys a uniform from their employer. The change ensures that employers get credit for reimbursing the worker as they currently do when the purchase is from a third party.
As well as making changes to the regulations, the Government have announced further support for businesses to comply with the minimum wage rules. For instance, we are offering tailored support to new, small businesses. HMRC is proactively visiting selected employers to educate them on the national minimum wage and to help them get their practices right from the start.
To further improve understanding of the rules, we will soon be publishing an improved guidance offer through gov.uk. Our new offer will include thematic guides on topics where breaches are common, such as pay deductions, apprentices and unpaid work. We have convened a guidance readership panel of employer groups, unions and relevant experts, to make sure that we get these products right.
The regulations ensure that the lowest paid workers are fairly rewarded for their valuable contribution to the economy. They also provide greater flexibility to employers to help them comply with the rules, while maintaining our world-leading employment rights. Our commitment to raising the national living wage to two thirds of median earnings makes the UK the first major economy to set such an ambition. I commend the regulations to the House.
Chris Stephens (Glasgow South West) (SNP)
I apologise for being slightly late for the Committee, Mr Paisley. I was in the advertised room, where they were discussing Buckinghamshire, but I managed to avoid that—
Chris Stephens
Indeed, Mr Paisley.
I have a couple of questions for the Minister. I am looking at the percentages that the Low Pay Commission has recommended. It is welcome that an increase of 6.5% is going to 21 to 24-year-olds. Is there an explanation as to why there is a lower increase for the development rate and the youth rate, for example, which are going up by only 4.9% and 4.6%? I am sure I am not the only Member of the House who has some issues with the age rates. Should people who are 21 really be getting the same rate as someone who is 25?
Secondly, the Government may describe this as the national living wage, but it is not the real living wage as far as we are concerned. The real living wage is £9.30 an hour. When does the Minister envisage the Government’s living wage being equal to the living wage applied and calculated by other organisations?
The Minister mentioned compliance. Do the Government have any plans to increase the number of employees employed by the national minimum wage compliance unit? It is important that there is strict compliance and regulation.
Another question relates to the current covid-19 pandemic. The Minister will be aware that the Government are discouraging citizens from going to pubs, nightclubs and so on. A lot of employees in the sector will be paid the national minimum wage. Are the Government encouraging the payment of the national living wage for people employed in pubs and nightclubs, which might very well close?
On Government contractors, are the Government encouraging the living wage to be paid, and are they ensuring that, when they issue contracts, the living wage applies? Can the Minister also tell us how he will make sure that employers do not use tips to qualify for the national minimum wage? That is still an issue in the hospitality sector, and it needs to be tackled.
Justin Madders
It is a pleasure to see you in the Chair again today, Mr Paisley. I am grateful to the Minister for his introduction. There was a glaring omission from his speech: he failed to mention that it was a Labour Government who introduced the national minimum wage. I am sure the next time he speaks he will acknowledge that it was the Labour party that introduced that groundbreaking policy.
That said, we will not oppose these statutory instruments; we recognise that any increase in people’s income is welcome, especially at this most uncertain time. However, there are areas where we would like more progress to be made. Millions of people are in work and struggling to make ends meet. Having a job is no longer a guarantor of a decent standard of living; indeed, work and poverty often go hand in hand. The current crisis has put a spotlight on certain parts of the economy, and the extremely precarious nature of many working people’s lives is coming to the fore. Millions of people are trapped in low pay or insecure employment, and the above-inflation increase presented still falls short of the promise made by former Chancellor George Osborne that it would reach £9 an hour by 2020. If the Minister wishes to clarify that there will be a further increase later this year to take us up to that level and honour that promise, that would be most welcome, although that would still fall short of Labour’s own plans.
An increase in the minimum wage will provide some help to the lowest paid, but it will not be the transformative change that we need. It will not end the growing levels of in-work poverty faced by millions. As we have discussed in recent weeks, it does not cover everyone in work. With the growing gig economy forcing more and more workers into sham self-employment, it is more important than ever that every worker is paid a decent living wage.
The minimum wage does not cover self-employment. According to the TUC, almost half of self-employed people do not earn the minimum wage. That means that around 2 million self-employed workers are now stuck on poverty pay. Does the Minister think that is acceptable? What is being done to address poverty pay among the self-employed? It may be that later announcements offer some temporary respite for people in this category, but I suspect they will not tackle the chronic low pay many in the gig economy or in self-employment face.
As the hon. Member for Glasgow South West mentioned, there is a huge discrepancy in the minimum wage for people over 21 and those aged 18 to 20, which is exacerbated by the differential percentage increases presented today. Will the Minister set out why the Government believe that workers aged 18 to 20 should be paid a far lower rate than those aged 21 for exactly the same work, and even less than those under 25?
I declare an interest: I have two sons in the lower age bracket. They previously both worked in the same establishment, and would regularly complain to me that they worked just as hard as their colleagues over 25, did all the same duties and performed just as well, but those colleagues got a much higher pay rate. I have never been able to provide them with a satisfactory answer as to why that is the case. Hopefully, the Minister can make my home life a little easier by giving me a good answer for them. It goes without saying that not everyone under the age of 25 can benefit from staying with their parents. For them, the daily cost of living is no different than it is for those over the age of 25, in terms of rent, council tax, utility bills or whatever.
In representations to the Low Pay Commission, the TUC highlighted some of the areas where it is apparent that further Government action is required. In its submissions, the TUC said that there should be greater use of labour market enforcement orders and undertakings, recognising that those tools form an important bridge between informal action and official prosecutions. It would be good to know how many enforcement orders have been issued so far and how many undertakings have been given by employers. Of the undertakings that have been given, how many have gone on to be breached? Of those occasions where undertakings and orders have not worked, how many prosecutions have followed?
We agree with the TUC that the current fines imposed following prosecutions, which are typically only a few thousand pounds, do not act as a sufficient deterrent, particularly when the employer has been found to have engaged in what would be considered aggravating activities, such as falsifying records. The fines need to be substantially increased. As the TUC suggests, £75,000 would be reasonable. The fact that there have been relatively few prosecutions suggests that the resources, and possibly the appetite, for enforcement are not there.
The TUC submission also raised the routine evasion of the national minimum wage regulations by such devices as false self-employment, work trials and unpaid internships. I touched on false self-employment and the gig economy, but will the Minister enlighten us on how many of the 50-plus recommendations made in the good work plan have been implemented? Although it only scratches the surface of the multiple problems of exploitation and insecurity in the gig economy, the last time I checked, I could count on the fingers of one hand the number of recommendations that had been implemented, so I would be grateful for an update on any progress.
Wearing my hat as the chair of the all-party parliamentary group on social mobility, we called some time ago for a ban on unpaid internships, recognising that to access certain professions they had become an almost compulsory rite of passage, including for jobs in the media, fashion and drama. Sadly, they are quite often used in politics, even in this place. Some people are expected to work for up to a year free of charge. In some places, of course, there is no guarantee of a job at the end.
I am aware that several private Members’ Bills are floating around that seek to put an end to that shameful practice. If the Minister were to indicate whether the Government intend to support any of those Bills, that would also be welcome. One further minor point from the TUC submission was the difficulty that third parties have in reporting national minimum wage infringements. Such people are often trade union officials who have in-depth knowledge and expertise in certain sectors. It seems sensible to make the most of that knowledge and experience with a workable protocol for referrals.
The Committee will be relieved to hear that I do not propose to go through every TUC recommendation, but one final important point that I wish to draw to the Committee’s attention is the proposal for public sector bodies to make it a requirement of any tendering or work outsourced that those providing the service ensure that all workers are paid at least the minimum wage. That does not require a change in legislation by the Government; it requires leadership. I would be grateful if the Minister advised on what efforts have been undertaken to encourage all those who contract with Government to pay the minimum wage and, for those who work in London, the London living wage?
The second instrument deals mainly with responses to a Government consultation on salaried hours and salary sacrifice. As the Minister explained, they are broadly technical changes to the rules around how minimum wage rates are calculated. The changes broadly afford the employer a greater degree of flexibility when determining the payments to be included within the regulations and the reference periods from which they are to be calculated.
We recognise that the regulations have been introduced as a result of responses made to the consultation by employers, but it is far from clear how significant and widespread the practices are. As the TUC said in its consultation response, there appears to be little evidence of that issue being raised regularly. We will therefore not oppose the regulations, but we urge the Minister to keep a close eye on how they work in practice because we would not want them to be used as a convenient way to game the system. One can envisage payments and reference periods being manipulated to create a certain outcome, which might well be within the letter, but not necessarily the spirit of the regulations,.
I would say the same about the reimbursement rules: on the face of it, they could be used as a Trojan horse to find even more matters to undermine the intended effect of the minimum wage. Care also needs to be taken to ensure that reimbursement takes place in a timely fashion. Although it is far from apparent that these changes will have any dramatic impact in one way or another, it is important that there are regular reviews of their implementation.
In conclusion, the Opposition believe it is important that the state sets minimum rates, but they are just part of the solution to low pay. We strongly believe that trade unions, as the collective voice of workers, are in the best place to negotiate with workers and employers about getting good pay and good terms and conditions for every sector in the country. We hope that one day we will see a Government that deliver that.
Paul Scully
I thank hon. Members for their valuable contributions to the debate. The national minimum wage and the national living wage make a real difference to the lives of millions of workers in the country. I am glad that there is agreement—notwithstanding some questions, which I will try to answer to the best of my ability—that the lowest paid workers deserve an inflation-busting pay rise, which the regulations will provide.
The regulations mean that, from 1 April, workers on the national living wage will be over £3,700 better off over the year compared with 2015, when the policy was announced. That marks a 21% increase in the national living wage since 2015. Younger workers will also get more money through the increases to the national minimum wage rates. We know that most businesses support increases to the minimum wage rates. Through the regulations, we are reducing burdens on employers in meeting minimum wage obligations while maintaining worker protections.
The hon. Member for Ellesmere Port and Neston mentioned the technical changes to the second set of regulations. He is right to say that we will continue to review the situation. Part of the reason for the changes to the regulations is that there were some unintended consequences when the national minimum wage and national living wage were introduced—for example, the four-weekly cycles and the fortnightly cycles. Regardless of how extensive they are, smoothing out those problems is a sensible measure. Of course, we will continue to see how that works in practice, as we will with all those sorts of things.
In no particular order—I have papers strewn absolutely everywhere—I will try to cover some of the points raised. The hon. Member for Glasgow South West talked about Government contractors paying a real living wage. The national minimum wage is a minimum wage, as is the national living wage. Good employers should always seek to go beyond that. The Department ensures that all contractor staff receive a minimum wage equivalent to the annual survey of hours and earnings median rate for their occupation or to the Living Wage Foundation rate, whichever is higher. It means that from April 2020 contractor staff will receive no less than £10.75 in London, or £9.30 outside London.
The hon. Member for Glasgow South West also asked why the national living wage is not higher. Right from the conception of the national living wage and the national minimum wage, we have been trying to work with businesses to ensure that employers and workers get the right balance. That goes to the question from the hon. Members for Glasgow South West and for Ellesmere Port and Neston about younger people. Again, we hope to rectify the situation so that, by 2024, 21-year-olds will be able to benefit from the higher amount. The Government took the decision to ensure that we get the right balance for younger people in the employment market. Our 16 to 21-year-olds’ unemployment rate is four times higher than that of people aged 25 and over. It is about having a balance between ensuring that they are paid a fair wage and that there are jobs and opportunities for them in the first place.
We are at the forefront on enforcement, and are significantly increasing the amount of money paid to HMRC for that purpose. HMRC will enforce in a proactive way, through education and visits to employers in the sectors that are most at risk. HMRC will have the financial resources to put where it considers best to tackle non-compliance. We have closed 770 investigations into employers between 2016-17 and 2018-19 that were opened with a potential apprenticeship risk. More than half those cases were closed with arrears found for the worker.
Several projects over the last few years have targeted apprentices and the sectors in which non-compliance is most prevalent, such as hairdressing and childcare. HMRC has undertaken many communication campaigns, including webinars and targeted projects, communicating rights and responsibilities to apprentices and their employers, to ensure that people know their rights, so that they can call out non-compliance, and that employers adhere to the rules.
HMRC also send text messages to nearly 350,000 apprentices when the annual rate increase comes into effect. We ensure that we have that communications campaign as soon as the increase is approved because it is so important that those who are the most vulnerable and the lowest paid understand their rights and how to complain. As I said in my opening remarks, HMRC also investigates anonymous complaints.
Clearly, unpaid internships are a concern, in terms of their being a barrier to social mobility. The hon. Member for Ellesmere Port and Neston is right to identify that they are often used in this place. In terms of tax and worker rights, the term “internship” does not mean anything. If someone is on work experience, just looking and learning, they are not working day to day and adding value to the company. If they are adding value to the company, and doing what could be seen as a worker’s job, the national minimum wage and national living wage legislation applies to them. Employers should look at that, and we will come down heavily on those who fail to adhere to it.
HMRC has contacted more than 2,000 employers found to be advertising unpaid internships online to ensure that they are compliant with the law. We have sent 35,690 letters to employers in those sectors that tend to use interns: publishing, media, the arts, marketing and fashion, as the hon. Gentleman said.
Justin Madders
I appreciate what the Minister says about how the nature of the work determines whether someone should be paid the minimum wage, but is it not a slightly artificial situation to expect someone at the very bottom of the ladder, in a very precarious situation in an internship, to report their employer to the national minimum wage helpline?
Paul Scully
By contacting 2,000 employers, we are reminding them of their legal responsibilities. I understand the hon. Gentleman’s concern about vulnerability and whistleblowing in those situations, but that is why it is important that we give HMRC the resource that it needs to have proactive oversight, and to go to those companies that are most likely to offer and advertise unpaid internships, so that we can nip it in the bud. To build our understanding, so that HMRC can follow the matter up properly, we have incorporated a question into the Department for Education’s employer skills survey, asking 90,000 UK employers whether they have used unpaid interns. Results are expected in late spring 2020, and we will follow up on that.
On the protection of the low-paid self-employed, we will introduce the Employment Bill, which covers a couple of the questions that were raised. That is a result of the good work plan published by Matthew Taylor and his colleagues. We hope to tackle a number of the issues raised in that report and will publish the Bill as soon as we can to ensure that it gets scrutiny from, and involvement of, all parties in its development. I look forward to introducing the Bill and having debates on it so that we continue to lead on workers’ rights.
Gareth Thomas (Harrow West) (Lab/Co-op)
I apologise for missing the Minister’s opening remarks. He will understand the particular concern among the low-paid and self-employed about their situation during the coronavirus crisis, as my hon. Friend the Member for Ellesmere Port and Neston mentioned. Can the Minister give us a hint about Government announcements in that area, as part of the process of reassuring constituents who are in that employment bracket?
Paul Scully
Unfortunately, I am not the Chancellor, but I look forward to the statement this evening. At this time, it is important that we continue to speak out daily for businesses and, as the hon. Gentleman rightly points out, for the self-employed, for workers and for people who are worried not just about their jobs and the viability of the business, but about shifts in those areas. Make no mistake, we have all seen in our inboxes the amount of concern out there, so it is so important that we continue to address the concerns of self-employed workers, employees and businesses. The Chancellor introduced a timely and targeted package last week in his Budget, but things are clearly moving at pace, and we will see what he says during his statement at 7 o’clock.
On the future of the national living wage, although we are increasing it and getting through the technicalities now, it is really important to reiterate the point about younger workers. We are planning to extend the reach of the national living wage to workers aged 23 and over from April 2021, and to workers aged 21 and over by 2024. Unfortunately, I suspect that the children of the hon. Member for Ellesmere Port and Neston will have already reached that higher level by that time.
A UK-wide minimum wage, recommended by the independent expert Low Pay Commission, ensures that the pay of the lowest paid in society is protected, and means that businesses compete on a level playing field. In 2016, the Government committed to raising the national living wage to 60% of median earnings, and we have stayed true to that commitment. We have the highest employment rate since comparable records began. The strength of our labour market shows that a higher minimum wage can go hand in hand with strong employment growth.
Chris Stephens
Before the Minister continues, he did not answer my question about employers using tips to reach the national living wage. That is a form of cheating that happens in the hospitality sector in particular. Will he respond to that specific point?
Paul Scully
Forgive me, I missed that one. The current rules are clear that tips do not count towards pay for national living wage purposes. That is part of the education that we need to ensure that the hospitality sector adheres to and does not fall foul of those rules, whether or not employers know about them. That is an area of possible exploitation and can be an area of ignorance, which is no excuse. We will shortly introduce legislation to ensure that 100% of tips go to workers, which I am sure will be welcomed in the hospitality industry.
Our pledge to raise the national living wage to two thirds of median earnings by 2024, taking economic conditions into account, makes the UK the first major economy in the world to set such an ambition. We will soon publish the remit for the Low Pay Commission, which will include recommending the national living wage rate to apply from April 2021—that is the first step on the path to two thirds of median earnings. We will continue to come down hard on employers who fail to pay the minimum wage.
The regulations and accompanying non-legislative measures show that we are committed to helping employers get the rules right at the first time of asking and without the need for enforcement. 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 2020.
draft national minimum wage (Amendment) (No. 2) Regulations 2020
Resolved,
That the Committee has considered the draft National Minimum Wage (Amendment) (No. 2) Regulations 2020.—(Paul Scully.)