National Minimum Wage (Amendment) (No. 2) Regulations 2010

Debate between Lord Myners and Lord Jones

Wednesday 8th December 2010 Grand Committee

[Lord Myners]

My Lords, I declare an interest as a former chairman of the Low Pay Commission. I am grateful to the Minister for her clear explanation of the regulations. I welcome the simplification that is being suggested and I am delighted to be reminded again of the coalition Government’s commitment to the national minimum wage.

I have four questions relating to the regulations. Would I be correct in understanding that an employee currently receiving precisely the adult national minimum wage who was also receiving assistance for transport to work would, as a result of this regulation, effectively have a lower benefit as a consequence of employment?

Secondly, I was somewhat surprised to see the explanation in paragraph 7.3 of the Explanatory Memorandum that,

“only around 90,000 low paid workers”,

will be affected. The figure of 90,000 seems to be quite large. What percentage is that of the total number of employees estimated to be earning the national minimum wage? I suspect that the use of the word “only” may be misleading.

I would also like to know a little more about the impact of the judicial review explained at paragraph 8.2 and what impact that might have on the timing of the implementation of these revised regulations. Finally, perhaps the Minister can explain paragraph 10.1 of the Explanatory Memorandum, which makes no sense to me at all.

While officials in the Box prepare the answers, I will do the Minister the courtesy of talking on another subject so that they can prepare their notes. I know how much anxiety can be prompted when you look around and they are filing their nails and not writing a note for you.

I have four general points on the national minimum wage. I was delighted to hear the Minister reiterate her commitment to the minimum wage in a Question to the House last week in connection with internship. Am I correct in understanding that her clear statement that there would be no change in the way in which the minimum wage operates reflects the fact that we continue to believe that the RPI is the appropriate index for inflation that should be used when assessing whether the minimum wage represents an increase or decrease in real income?

Secondly, can the Low Pay Commission be asked to look at the accommodation allowance, which has not kept pace with the cost of accommodation and is falling behind in terms of value?

Thirdly, the Low Pay Commission should also give its attention to piece work. For example, hotel service operatives—or chambermaids as we used to call them—are sometimes assumed to be able to complete four bedrooms an hour for the purposes of earning the minimum wage. There is a lot of evidence that the rate of productivity assumed is altogether too high. Therefore, the minimum wage is being breached in both spirit and purpose.

Finally, can the Minister confirm that, as part of the coalition Government’s commitment to the minimum wage, there will be no diminution in the resource available for compliance and enforcement? The word “fairness” was used earlier. The national minimum wage has to be fair both to employees and to employers who comply. When employers in the vicinity do not comply, that means a disadvantage for businesses which meet their legal obligations. I came across many examples of firms which did not comply. Resource was already very stretched in terms of monitoring compliance and enforcement. If the Government were in any way to reduce the resource made available for these functions, that would undermine the national minimum wage, which I believe the Institute for Government recently listed as one of the top 10 achievements of recent Governments. I think it is fair to say that the national minimum wage has had universal support from all political parties, and commitment to compliance, monitoring and enforcement is critical.

I think that I have now allowed sufficient time for those in the Box to perform their duties. I support the proposed regulations.

[Lord Jones]

Perhaps I will give them a little more time. I thank the Minister for her exposition at the onset. I am very glad to follow my noble friend Lord Myners, who on these matters has a very distinguished track record. The Committee may well learn from his expertise.

I welcome the details given, which were detailed enough. I support the regulations and would not be able to contribute without praising the minimum wage legislation overall. It was a very great social advance in Britain. It has been hugely beneficial to my own country of Wales and perhaps also particularly to sparsely populated areas across Britain—those, for example, which are dependent on tourism, the hospitality industry and aspects of agriculture and forestry for employment. It is a huge advance for many ordinary people in our nation.

Like the noble Lord, Lord Cotter, in another place I observed the clamour, controversy and opposition when the Blair Administration brought forward the minimum wage legislation. It was almost unbelievable. The opposition was strong and, looking back, there was much sound and fury. I am glad that I was able to support that legislation and use my vote in the other place. I, for one, am very proud that the minimum wage is on the statute book and I am grateful for the information that the Minister has given us today.