National Minimum Wage (Amendment) Regulations 2019

Baroness Burt of Solihull Excerpts

Monday 4th March 2019 Grand Committee

[Baroness Donaghy (Lab)]

My Lords, I welcome this statutory instrument and the increases outlined by the Minister. As he knows, next month will be the 20th anniversary of the introduction of the national minimum wage, and I had the honour of being one of the founding members of the Low Pay Commission at the time. The recommendations we made impacted on and benefited 1 million women—and, incidentally, the world did not come to an end, which some forecasts had said would happen.

I am pleased that successive Governments have upheld the principles laid down by the original committee, and I hope that that will continue. Obviously, this was before the national living wage was introduced. However, one omission from our very first report in 1998, before the implementation, was the issue of accommodation offset. We were asked as a committee to look at that again, because we had not seen the significance of it.

I well remember being taken with the committee down to a convent in the middle of the Devon countryside to be gently lobbied by the Mother Superior and a number of nuns about the importance of having an accommodation offset. The Minister will know that it might have been gentle lobbying, but, my goodness, we were in absolutely no doubt whatever about the strength of feeling involved. The experience we had on the committee is a memory I will take with me for a long time. We were conscious that we were creating history, and I am very glad indeed that this is still here for us to admire.

[Baroness Burt of Solihull (LD)]

My Lords, I will fulfil the promise I made to the Minister on the previous statutory instrument and be brief. It is also a great relief from Brexit to be discussing something that is current and not contingent on anything else happening.

The statutory instrument talks about the national minimum wage amendment regulations, but the table refers to the national living wage. It does not take much to confuse me. I just want to explore that difference for a minute or two. The uplift of 4.9% for over-25s to £8.21 is very welcome and I accept and welcome the comments from the Minister on the progress that the Government are making to get to 60% of median earnings by 2020.

The concept of the national living wage was introduced by the Government in 2015. I appreciate the Minister’s comments on how the amount has increased but my understanding is that it is not a national living wage because it is not based on actual living costs. The Living Wage Foundation currently calculates it—although presumably it is due for an uplift as well—at £9 per hour and £10.55 in London. It says that the living wage is what people need to earn to live. Citizens UK says that there is a moral imperative on employers to pay that if they can and 4,700 businesses and 104 local authorities do.

We know that 20% of all low-paid workers are in the public sector. Can the Minister say what percentage of public sector workers are in receipt of the living wage? It was very good to hear the Minister’s comments on enforcement. Can he tell me how many companies have been found to be paying below the minimum wage and how many of these have actually been prosecuted?

In conclusion, I hope that we will be moving towards the living wage very soon. It is proven to be good for business because it improves staff morale and retention. It is good for society and for the Government’s coffers too, because 35% of those earnings will go to the Treasury.

[Lord Stevenson of Balmacara (Lab)]

My Lords, I declare an interest as one of my children is an apprentice aged over 19. He is in the first year of the apprenticeship and so would benefit from the figures that we have in front of us today. I have not discussed it with him but I am sure he will be delighted to hear that there is more money on its way.

My noble friend Lady Donaghy’s comments were well made and it is astonishing that we are 20 years into what was seen at the time as quite a revolutionary policy and which is now, in the words of the Minister who introduced the order, settled between all parties as a feature of our working environment. It is a good thing as it works for all sections of society, particularly those at the lower end of the pay spectrum.

This is the fourth consecutive year that I have been reviewing this order, so I took the change of looking back to last year’s Statement, when the Minister was also responding, although that was only his first time. I will repeat some of the things that were said then because I think that the issues are still relevant. There are two important points to put on record. The document in front of us is an excellent piece of work. Again, I congratulate the team responsible for it. It reads very well indeed. It is a bit scary to go back to what we learned at university about the economics of wage policy and the impact of living and national wages but, nevertheless, it is important to see it all there. The document itself is good but also it plays back to the work done by the Low Pay Commission, in place for 20 years now, but doing fantastic work. It is very good to see its ability to move from the national minimum wage conditions when it was set up in 1998 to now, with the national living wage, which progressively moves the lower paid on full rates up to 60% of the median wage. The commission has adapted and continues to do its work in a way that is important and effective for society as whole.

Three points were made last year which I think have been picked up in the current document. One concerned whether the approach that has been taken to calculate the impact of the national minimum wage has stood the test of time. It was good that the department decided to take external advice from an expert body, and it is good to read the report and evaluation, which goes some way to answer some of the points I raised last time. That gives us a good basis on which to go forward.