National Minimum Wage (Amendment) Regulations 2020

Debate between Baroness Burt of Solihull and Lord Stevenson of Balmacara

Tuesday 3rd March 2020 Grand Committee

[Baroness Burt of Solihull (LD)]

My Lords, it would be churlish not to congratulate the Government on achieving their target of 60% of median earnings this year. I also welcome the increased funding for enforcement.

The increase in the national living wage will provide a considerable uplift for the working poor in our country. A top rate of £8.72 is getting closer to the Living Wage Foundation’s recommended £9.30—I presume that it will be further uprated in due course—but it is still a way off the London living wage of £10.75. I should probably know this, but can the Minister explain why there is no Low Pay Commission London minimum wage, when clearly it is more expensive to live in London than anywhere else?

The difference between the minimum wage and the living wage is that the living wage is based on a basket of goods and services which should give a basic but acceptable standard of living. It therefore follows that the national minimum wage is not sufficient for someone to live on. Instead, it has to be subsidised by the Government through universal credit and various other benefits.

I can see that different individual and family circumstances will need a different underpinning level of help. The idea of always making work pay was quite a genius move on the part of the Government when it came in, but implementation was, and still is, another story. Fortunately, that does not come within our remit today. We are where we are and there is something to celebrate.

The adult rate for 21 to 24 year-olds received the greatest percentage uplift, at 6.5%, but the youth rate for under-18s has fared proportionately worse, at 4.6%, or the princely sum of 20p an hour. I know that it is argued that these youngsters enter the world of work with very little knowledge, but it cannot help their self-esteem to give them a 20p rise, especially if they and their families need that money.

I wish I had a crystal ball to see whether, in a time of full employment and even greater skills shortages, not helped by this Government’s immigration policies, wage rates will rise above and beyond the minimum. Unfortunately, I do not have a crystal ball, except to predict that we are all likely to meet here next March. Who knows what state the country and wage rates will be in then?

[Lord Stevenson of Balmacara (Lab)]

My Lords, I welcome the SI before us. As has been said, it is interesting to see every year the amount of work that goes into providing the analysis and evidence for it. It is of a very high standard and one enjoys reading the recent literature on these areas. I know that it has been updated this time, although I am afraid that I have not gone to the original texts.

I should have declared my interests. I am the father of a child who is receiving the apprentice wage, being over 19 and still in the first year of his apprenticeship—although I think that comes to an end next week.

Having said that, I want to come back to two questions I have asked previously. The first concerns the disregard for accommodation, which there is not very much detail about. I do not particularly need an answer now, but will the Minister write to me at some point in the not-too-distant future explaining why the percentage used for the disregard for accommodation is still at variance with the figures used for any of the others? My simplistic approach to this is that if there is a broad range of indicators which suggest that pay needs to increase on a particular range, and there are reasons why that might vary across the individual numbers, why do we come to a different figure for the accommodation disregard, even though it affects all those in the sector? It is too complex an issue for the Minister to respond to today, but I would be grateful to receive a letter on that point.

The noble Baroness asked about the work on making sure that employers are paying the national minimum wage, subject to a big increase in funding announced in last year’s Budget. We do not get much detail in these figures about what exactly is happening. A reference on page 37, in paragraph 146, suggests that there will be a change this year, because a greater number of employees are in the lower bands of the national living wage and there will therefore be instances where non-compliance could occur. In fact, there could be an increase in that. There is no explanation given, but if there is anything of significance, perhaps the Minister could write to me about it. I just note it at this stage.

The basic concern is that although the budget has increased and the numbers are down, an alarmingly large number of people are still thought to be affected. In April 2019, it was estimated that 424,000 jobs with pay less than the national minimum wage and national living wage were held by employees aged 16 and over. That is 1.5% of all those aged 16 plus in UK employed jobs. It is true that that is less than last year, when it was 1.6%, but it is still an awful lot of people. Will the Minister say what activity is going to be involved in the expenditure of the greater funds made available for enforcement? Does he judge that it will be successful?