Tribunals, Courts and Enforcement Act 2007 (Consequential Amendments) Order 2012

Debate between Lord Young of Norwood Green and Lord De Mauley

Wednesday 18th July 2012 Grand Committee

[Lord De Mauley]

My Lords, the Tribunals, Courts and Enforcement Act 2007 (Consequential Amendments) Order 2012 unsurprisingly makes consequential amendments to various pieces of primary and secondary legislation, which already disqualify a person from holding certain positions in the event of their bankruptcy. This order extends those disqualifications to persons subject to debt relief orders and to debt relief restrictions orders or undertakings.

It has long been held that going bankrupt should disqualify a person from holding certain offices and positions, and legislation is in place to provide for this. Debt relief orders were introduced in 2009 and in many ways have a similar impact to bankruptcy. Both provide individuals with debt relief and subject them to certain automatic restrictions. It makes sense to introduce consistency between the further restrictions that apply to bankrupt individuals and those that apply to people subject to a debt relief order. That is what the order seeks to achieve. It will prevent individuals subject to a debt relief order holding certain positions, for example that of pensions trustee. It also prevents their holding some board memberships—for example, acting as a school governor or member of a local authority. The order will add a debt relief order to the existing list of formal insolvency procedures, primarily bankruptcy, in around 120 separate pieces of legislation.

These disqualifications are necessary as bankruptcy will often have been caused by some form of financial mismanagement. It is therefore considered prudent that individuals subject to bankruptcy should not hold specific high-profile positions of trust in which financial judgment may be required. This measure will also result in better governance of the bodies in question as it will reduce the risk of someone who has become insolvent being appointed to one of the specified positions.

The list of disqualifications to which a bankrupt is subject was reviewed in 2006 as part of provisions introduced following the Enterprise Act 2002. Any disqualifications thought unnecessary were removed at that time. Those that remain are still felt to be relevant and necessary. I commend the order to the Committee.

[Lord Young of Norwood Green]

My Lords, I thank the Minister for his concise but comprehensive explanation. I must admit that, again, I have learnt something. I was a school governor and we asked the governors to declare their interests. Most are CRB checked but we never thought to ask them about this area—it may be that we should have done so.

I do not have any arguments against what seem to be sensible changes but I draw something to the Committee’s attention. I went through the impact assessment, the end of which says:

“I have read the Impact Assessment and I am satisfied that … it represents a fair and reasonable view”.

I cannot read the signature of the Minister but it does not look like the noble Lord’s. However, the front page includes two typographical errors that mean it does not make sense. It states:

“This statutory instrument will make such necessary changes and ensure that where it is appropriate for particular public posts”—

I think it means “post-holders”—

“to have been personally insolvent”.

It does not make sense. I think there is also a typographical error in the last sentence of the next paragraph. It is somebody’s responsibility to check them; I just draw them to the Minister’s attention. Other than that, I am happy to agree to these changes.

[Lord De Mauley]

My Lords, we are grateful to the noble Lord for his close scrutiny—

[Lord Young of Norwood Green]

Vigilance.

[Lord De Mauley]

His vigilance, indeed. I will certainly look into those matters. In the mean time, I hope your Lordships will agree to consider the order.

Community Interest Company (Amendment) Regulations 2012

Debate between Lord Young of Norwood Green and Lord De Mauley

Wednesday 18th July 2012 Grand Committee

[Lord Young of Norwood Green]

My Lords, I confess that I was in complete ignorance of community interest companies until I saw this, and I learnt quite a bit looking at it. They are one of our more interesting innovations, given that a significant number have been created and continue to be created. I have looked on the website at the latest grouping. I admit that until I listened to the noble Lord, Lord Hodgson, I saw this order as correcting an error.

I have some sympathy for the view of the noble Lord, Lord Hodgson, that we should try to make things as easy as we can. I was impressed when I read the impact assessment that all of them have submitted their reports. I hope that I have got that right. If only we could ensure that all companies managed to do that, it would be a major step forward. Nevertheless, I will be interested to hear the Minister’s response to the view of the noble Lord, Lord Hodgson. I have no further comments.

[Lord De Mauley]

My Lords, I thank my noble friend Lord Hodgson and the noble Lord, Lord Young, for their consideration of the draft regulations. To address my noble friend’s point about the claim in the documentation to reduce the regulatory burden, I can first establish that it is at least not increasing it, because all CICs were already filing. I think that the contention is that it is more straightforward to have one account filing date and one set of penalties, and also that e-enablement will allow easier submission. I throw myself on his mercy, but those are the suggestions that I put to him.

His greater point about the co-ordination between the registrar of companies and the Charity Commission —I think that was the nub of it—I will take back to the appropriate departments. I think that it will be more than one department, but it is a valid point.

Consistency is essential in the regulatory environment, where light-touch regulation means that there are limited measures to ensure that CICs are meeting the obligations laid out in the legislation. I commend these regulations.

National Minimum Wage (Amendment) Regulations 2012

Debate between Lord Young of Norwood Green and Lord De Mauley

Wednesday 18th July 2012 Grand Committee

[Lord De Mauley]

My Lords, the regulations do three things. First, and most importantly, they increase the minimum wage rate for adults and apprentices, and increase the maximum amount for living accommodation that counts towards minimum wage pay. Secondly, they reflect changes to the names of the apprenticeship programmes in England. Thirdly, they make it clear that deductions or payments for accommodation do not affect minimum wage pay where the accommodation is exempt from the minimum wage accommodation rules because it is provided by higher or further education institutions.

I will concentrate my remarks on the minimum wage rates. As I am sure noble Lords will be aware, the increases contained in the regulations are those recommended by the Low Pay Commission in its 2012 report. In March, the Government announced that we had accepted all the commission’s rate recommendations. The regulations increase the adult minimum wage rate by 1.8% in October, from £6.08 to £6.19.

In making this recommendation, the Low Pay Commission concluded that caution was essential. While it recognised that real incomes have fallen, it believed that in the current difficult economic circumstances a large increase would carry too great a risk to jobs. We believe that this increase is appropriate. It is based on sound economic evidence, research, analysis and consultation by the commission. It maintains the relative position of the lowest paid and is one that businesses will be able to afford.

The Low Pay Commission also concluded that there is scope for an increase to the apprentice minimum wage that we introduced in October 2010. It recommended that the apprentice minimum wage should be increased by 5p to £2.65 an hour. We consider that this increase is appropriate.

At this point, I should mention what is not in this year’s regulations. Both the Government and the Low Pay Commission remain very concerned about the position of young workers in the labour market. I am sure your Lordships share that concern. Young people are more vulnerable than they have been previously as they have been hit harder by the difficult economic circumstances. That is why we asked the Low Pay Commission specifically to consider their position in the labour market. Their position has continued to be difficult and there is some evidence that in these tough economic conditions the minimum wage level may have an impact on their employment opportunities. This is because, over the last few years, youth minimum wage rates have increased faster than young people’s earnings generally. As a result, the so-called “bite” of the minimum wage for young workers—the minimum wage as a percentage of median earnings—has increased, while the bite of the adult rate has remained stable. Pay data from the Office for National Statistics shows the bite for 16 to 17 year-olds as being around 73%, with the bite for 18 to 20 year-olds at around 80%. This compares with the bite of the adult minimum wage of around 51%. The commission concluded that it would be imprudent for the bite to rise any further and therefore recommended, albeit reluctantly, that minimum wage rates for young workers should not be increased this year.

It is usually the case with economic downturns that the employment of young people turns down earlier and faster than that or older people, but then recovers faster. However, this time the employment of younger workers has yet to recover. In addition, since the start of the economic downturn, the number of younger workers who have never had a paid job or a place on a learning scheme has increased. We consider that the commission has taken the right approach. Freezing the youth rates has been a very tough decision. However, raising the youth rates would be of little value to young people if it meant it was harder for them to get a job in the long run.

I turn now to the other elements of the regulations. The names of the apprentice programmes in England have changed, so the regulations make consequential changes to reflect this. Last year, we implemented regulations to exempt higher and further education institutions from the minimum wage accommodation rules where they provide accommodation to workers who are enrolled as full-time students with them. Regulation 2(5) puts right a minor omission in those regulations. It makes clear, for the avoidance of doubt, that deductions or payments for such accommodation are not included in calculating whether the minimum wage has been paid.

The Low Pay Commission’s rate recommendations were made against a difficult economic background. They are based on extensive economic evidence and take account of the prospects for the UK economy. We consider that they are appropriate and balance the needs of low-paid workers against the challenges that businesses face. I ask your Lordships to consider these regulations.

[Lord Young of Norwood Green]

My Lords, first, I apologise for missing the beginning. I had not expected things to go quite so quickly in the previous debate.

I only have a couple of points to make. I came in probably at the right time on the analysis in respect of young people. I do not disagree with the analysis that the noble Lord, Lord De Mauley, made about the “bite”. I noticed it was clearly a difficult decision because in the impact assessment it says:

“The labour market position of young people continued to worsen in 2011, with employment of young people continuing to fall and unemployment to rise (although the extent to which pay is a factor is not clear)”.

It concerned me a bit. They took, I thought, a very cautious view. If they had only increased it to £4 it would have been something, although admittedly marginal.

The only other question I would like to ask the noble Lord—I do not necessarily expect him to have the answer as I did not give him any warning of the question—is regarding enforcement, on page 13 of the impact assessment. I am interested to know whether the noble Lord has any information on the level of enforcement and whether that is improving—although one side of me would prefer the need for it to be less. Nevertheless, is any statistical information available from HMRC? If not, I should be grateful if the noble Lord could write and advise me. Other than that, I have no further comments to make.

[Lord De Mauley]

My Lords, this has been a short but important debate. I thank the noble Lord, Lord Young, for his contribution. He initially commented on the youth rate, and I understand why he would do that. As I think I explained, youth unemployment is a major problem that we are trying to address. We do not believe that increasing the cost of employing young people would help them, quite apart from businesses, for example. There is little point in pushing wages up if it means that jobs are no longer available. Once young people are in work, they are gaining important skills and experience that will help them to progress. The noble Lord would have made that point to me from this Dispatch Box a couple of years ago. They are not gaining those skills and experience if they are out of work. Hard times mean that we have to make hard decisions. The decision was a hard one, as the noble Lord knows. However, the evidence found by the Low Pay Commission makes a compelling case that it would not be prudent to increase the minimum wage for youth workers.

The noble Lord asked about enforcement. The Government are firmly committed to the minimum wage and to effective, risk-based enforcement. Paying anything less than the minimum wage is totally unacceptable. If we find examples of businesses breaking the law, we crack down on them. The Government actively target employers who flout their responsibilities and investigate any complaints made against them, taking them to court if required. We are clear that an effective compliance regime goes much wider than just enforcement. It must reach employers that are at risk of underpaying their workers as well as those who have already fallen foul of the rules. With this in mind, our strategy for minimum wage compliance focuses on how the compliance and enforcement landscape should look over the next three to five years. It recognises that our approach must continue to be based on intelligence and data.

Clearly, in the context of reduced budgets, we will need to prioritise. However, underpayment of staff wages is not an option. Our strategy is helping us to make informed choices, and ensures that we have the right tools for the job and that resources are focused where they are most effective. I can tell the noble Lord that in 2011-12, HMRC completed 2,534 minimum wage investigations. It found non-compliance in 879 cases and identified arrears of £3.5 million that were owed to 17,300 workers.

The Government are committed to the minimum wage because of the protection it provides to low-paid workers and the incentives to work that it provides. The Low Pay Commission’s rate recommendations strike the right balance between pay and jobs. It is important that we have a minimum wage that helps as many low-paid workers as possible, but it is equally important that we do not damage employment prospects by setting it too high.

[Lord Young of Norwood Green]

I thank the noble Lord for the information on enforcement, which was helpful. I did not realise that it was lurking there.

I want to say something further about youth unemployment because the latest figures have come out. I do not want to score points on this because I applaud some of the things that the Government are doing. The focus on apprenticeships is one of the good things. However, I did not want to lose the opportunity of saying that it is still not enough. The situation out there is very serious. In some areas, the levels of youth unemployment are alarmingly high. I am just using this opportunity to call on the Government to have a careful look at some of their policies. There is still a reluctance from the Government to accept that there ought to be a requirement in public sector contracts for companies who bid successfully to indicate how many apprenticeships they will take on. There is still an abysmally low number of companies that offer apprenticeships. That in itself might not solve all the problems, but when only something like 4% to 8% of companies are offering apprenticeships, there is a long way to go. Although the total figures for apprenticeships always look good, a significant number are adult apprenticeships. I do not say that there should not be adult apprenticeships, but that does not address the areas of major concern.

When going around a local estate, I could not help noticing four young teenagers—it was difficult to know how old they were, but they were definitely in their teens—who were certainly not at school, in college, in training or at work. It was the middle of the day. That is a wasted opportunity and potentially an opportunity for them to get into trouble. That is a situation in microcosm of the challenge we face. However, I thank the noble Lord for the information he has given us.

[Lord De Mauley]

Apart from the minutiae of how the issue is addressed, I would like to say that the noble Lord and I are at one in appreciating how important this problem is and the fact that it must be addressed. He might like to know that overall, with the investment announced in this year’s Budget, we will deliver at least 250,000 more apprenticeships over the next four years—I am not trying to score points here, but just as a comparison with the previous Government’s plans—which will total 360,000 places. That includes funding for training for up to 40,000 apprenticeship places over the life of this Parliament that will provide additional capacity to support young unemployed people, in particular through progression from the department’s work experience programme. The Government are launching a new £75 million programme of training and other targeted support focused on SMEs to help access advanced level and other higher apprenticeships. I hope that that is helpful to the noble Lord.

The regulations we have been discussing support the Government’s commitment to delivering fairness and supporting business. I believe that the provisions are fair and appropriate. The increase in the adult rate will maintain the relative position of the lowest paid while also being one that businesses will be able to afford. I hope that noble Lords can accept the regulations.

British Time Harmonisation

Debate between Lord Young of Norwood Green and Lord De Mauley

Wednesday 11th July 2012 Lords Chamber

[Lord De Mauley]

That was a wide-ranging question, my Lords, but I always listen to the noble Lord with great respect and interest.

[Lord Young of Norwood Green]

My Lords, will the Minister develop his idea on how consensus will be achieved? I reflect on the fact that, in theory, we are in summer time at the moment; perhaps we ought to change its name after the current spate. Seriously, can he give us some indication of the positive impact for business if we made this change? My recollection of the change 40 years ago is not quite that there was such an overwhelming rejection. It might have been less welcome the farther north you went, but it would still have some benefits.

[Lord De Mauley]

We have already had a bit of a discussion about the effects on trade and I do not think that I have a great deal to add. However, if I detect a sense of hesitancy in the noble Lord about going for a change, I can quote to him what the Prime Minister said:

“I want us to have a united time zone. It's up to those who want to make the change to make the argument to try to convince people right across the country that it's a good thing”.

Employment Tribunals Act 1996 (Tribunal Composition) Order 2012

Debate between Lord Young of Norwood Green and Lord De Mauley

Monday 19th March 2012 Grand Committee

[Lord De Mauley]

The noble Baroness makes a fair point. Under the process we are going through today, we are asked to consider. We are not asked to come to a final conclusion. As the noble Baroness knows, these orders will come to the Chamber. I believe that there is the chance that the Opposition may lay a Motion.

[Lord Young of Norwood Green]

I do not know whether the usual channels have yet exchanged views on this but I think that they will soon—I think on that we can rest assured.

Earlier, someone paid a short tribute to Lord Wedderburn.

[Lord De Mauley]

I did.

[Lord Young of Norwood Green]

I should like to echo that. The debate would have gone on considerably longer but, nevertheless, he made a massive contribution to employment law and is sadly missed today.

[Lord De Mauley]

I entirely support that comment by the noble Lord, Lord Young. I commend the order to the Committee.

Armed Forces Bill

Debate between Lord Young of Norwood Green and Lord De Mauley

Tuesday 6th September 2011 Grand Committee

[Lord Young of Norwood Green]

I would like to make a short contribution to this debate and declare an interest as a former member of the Armed Forces Pay Review Body. I echo the comments of my noble friend Lady Dean because my experience was very similar. I met lots of young people whose lives were going nowhere and whose education was little or nothing. They owe a debt of gratitude to the Armed Forces for turning their lives around, giving them some education, giving them a sense of purpose in life, enabling them to work as part of a team and so on. There are therefore a lot of positive things that the Armed Forces do that we ought to pay tribute to.

I am not one of those who feel we have to apologise for recruiting people at the age of 16. Along with that right there is a responsibility and we need to make sure we get the balance right in terms of vocational training. If we tried to propel all these people down the A-level route, it would not fill them with glee. Getting the right balance of practical vocational training along with accredited educational achievements is something they would aspire to. Some of them will go on and a lot of latent talent will emerge.

Along with the right to recruit people at that age, there is also a responsibility. The question of informed consent exercises a number of us. When they reach the age of 18, or just before, as suggested under my noble friend Lord Rosser’s Amendment 22, there ought to be a proactive process within the Armed Forces whereby they contact the young person concerned, make them aware of what stage they are at, and help them to make an informed decision.

My last point is that the Armed Forces do great things. My noble friend Lady Dean pointed out that when young people are part of the Armed Forces, they have a sense of direction and know where they are. Unfortunately, we know that when people leave the Armed Forces they no longer have the comfort of being part of the organisation, so the point about getting resettlement right for those who decide they do not want to stay in the Armed Forces any longer is an important one.

[Lord De Mauley]

My Lords, before I respond to these amendments, I should declare two interests—one as President of the Council of Reserve Forces’ and Cadets’ Associations and the other as Colonel Commandant of the Yeomanry.

The amendments in this group all deal with the matter of under-18s serving in the Armed Forces. I welcome the efforts of noble Lords in reminding us that the welfare of those who join under the age of 18 is very important indeed and I thank all those who have moved amendments and spoken today. I can assure your Lordships that the Ministry of Defence is well aware of the need to ensure that these young people live and work in an environment which safeguards their interests and wellbeing, and I thank in particular the noble Baroness, Lady Dean, and the noble Lord, Lord Young, for their helpful and positive comments to this effect. I welcome the suggestion of the noble Baroness, Lady Dean. Things have been improving and will continue to improve, but we can always do better.

A great deal of close attention has been focused on this whole area in recent years, especially after the tragic deaths at Deepcut. We now have robust and effective safeguards in place to ensure that under-18s are cared for properly. Moreover, as the noble Lord, Lord Tunnicliffe, suggested and I can confirm, no service person under the age of 18 is to be deployed on any operation which will result in them becoming engaged in or exposed to hostilities. And recently we announced a change to the right of discharge for those under the age of 18. I shall come back to this in a moment.

Through Amendment 6, the noble Lord, Lord Judd, seeks to include service personnel under the age of 18 as being within the group covered by the Armed Forces covenant report, which is a laudable objective. However, the guidance accompanying the Armed Forces covenant, which we published on 16 May, is quite explicit. It states that:

“Special account must be taken of the needs of those under 18 years of age”.

I can assure noble Lords that we will not forget this aspect of our responsibilities for service personnel. The Armed Forces covenant report is to be a report about the effects of service on servicepeople, so as regards Amendment 6, minors under the age of 18 are already within the definition of servicepeople in the clause. I hope that the noble Lord will accept that.

As regards Amendment 8, I have some difficulty with the wording proposed. Not only would the amendment require the Secretary of State to give particular consideration every year to the effects of service on those under 18 years of age, it would also require him to have particular regard to those effects right through until the individuals in question became veterans. It would oblige us to treat those who joined under the age of 18 as a separate category throughout their service, and perhaps even throughout their lives. I hope it will be apparent to noble Lords that that is not an appropriate distinction to build into legislation.

I turn now to Amendment 22, spoken to by the noble Lord, Lord Tunnicliffe. This provides that service personnel under the age of 18 will be required to confirm in writing that they wish to continue serving in the Armed Forces after their 18th birthday. This must be done at least three months before their birthday. As noble Lords will know, it has long been our policy to enable service personnel under the age of 18 to reconsider their choice of a career in the Armed Forces up until their 18th birthday, and indeed for three months afterwards if they have already declared their unhappiness. To that effect, we are travelling in the same direction as the noble Lord. In fact, these informal arrangements have provided our under-18s with six months more to think about whether they have made the right choice of career than would the amendment. But following a review of our discharge policy for the under-18s, this has been converted into a legal right. A regulation was introduced on 12 July this year for each of the Armed Forces to provide a new statutory right for all service personnel to claim discharge up to their 18th birthday. This new regulation is separate from and additional to the long-standing legal right of all new recruits, regardless of age, to discharge within their first three to six months of service, depending on their service, if they decide that serving in the Armed Forces is not a career for them.

Under the new regulation, everyone under the age of 18 serving in the Armed Forces already has a right to claim discharge up to their 18th birthday. For the first six months of service this is achieved by giving not less than 14 days’ notice in writing to their commanding officer after an initial period of 28 days’ service. At any other time after six months’ service, those under the age of 18 who wish to leave their service must give notice in writing to their commanding officer, who must then discharge the under-18 within the next three months. For those who give notice just prior to their 18th birthday, this means that the latest they will be discharged is at 18 years and three months of age.

The new right of discharge includes a cooling-off period to avoid the unintended consequence of a decision made in the heat of the moment. A shorter period may be agreed with the commanding officer, but three months provides the serviceperson under 18 with a period of due reflection, with appropriate guidance and the right to rescind their request for discharge. The amendment proposed by the noble Lords, Lord Rosser and Lord Tunnicliffe, adds no protection for those under 18 who are serving, and would put a staffing burden on the chain of command that I hope they will accept is unnecessary. The right of discharge is made clear to all service personnel on joining the Armed Forces. We wish to continue to ensure that those young men and women who wish to serve in the Armed Forces are able to do so, while those who realise that a service career is not for them can leave as a right. On this basis, I hope that the noble Lord, Lord Judd, will withdraw his amendment.

National Minimum Wage (Amendment) Regulations 2011

Debate between Lord Young of Norwood Green and Lord De Mauley

Tuesday 12th July 2011 Grand Committee

[Lord Young of Norwood Green]

My Lords, I am pleased to support this important piece of legislation which makes the necessary amendments to ensure that the annual rises are made to the national minimum wage and that they will come into force on 1 October 2011, raising the wages of something like 900,000 workers.

The national minimum wage was introduced by the Labour Government in 1999 in spite of all manner of scaremongering, particularly from some sections of the right-wing press and, as I recall, it was opposed by the Conservative Party at the time. When it was introduced, it raised pay for more than 2 million people, and thereafter the Labour Government ensured that there were regular, above-inflation increases, so that in the first 10 years of its existence, the national minimum wage rose by 59 per cent. There is no doubt that those increases have raised the living standards of the lowest paid and have helped to close the gap between men and women's pay.

I agree with the noble Lord, Lord Teverson, that it did away with what was in effect a state subsidy for those parts of the corporate sector that paid significantly less than the minimum wage. As we know, when those investigations took place, a wage of £1 an hour was not uncommon in certain parts of industry. In 2004, some 50,000 low-paid teenagers received a boost in income when a minimum wage for 16 and 17-year-olds was introduced. When the Conservative Party was opposing the introduction of the minimum wage before 1999, there were claims that it would cost some 2 million jobs. In practice, 3 million extra jobs were created in the following 10 years.

Despite the initial and determined opposition to the national minimum wage, it appears that it is now accepted by the main political parties. I was pleased to hear the Minister state that the Government disagree very strongly with the remarks made by the honourable Member for Shipley two weeks ago when he suggested that disabled people should be required to work for less than the national minimum wage. I welcome that assurance.

During the first 10 years of the national minimum wage, the level of the annual increases in the national minimum wage meant that overall it rose above the level of inflation. In the past couple of years, it has risen more or less in line with average earnings. However, it worries me that we are now seeing some very rapid rises in the price of basic foodstuffs, domestic fuel bills and vehicle fuel, which has a knock-on effect on public transport and many other products. If you are on a low income, food and fuel make up a higher percentage of your expenditure, and therefore you are particularly hard hit by these rises. We have seen some very steep rises in food prices and fuel prices in the past few months, and we may well see further increases in the next few months between now and 1 October 2011, the date when the increases in the national minimum wage that we are discussing today will be implemented. If these trends continue, the additional 15p per hour on the adult minimum wage, bringing it up to £6.08 an hour, which amounts to a 2.5 per cent increase, will soon be eliminated by price rises.

Put another way, this increase of 15p per hour amounts to an increase of £6 per week for a 40-hour week, while we are seeing price rises which will soon invalidate that. If these trends continue, clearly the Low Pay Commission will be taking into account these additional costs as it does its complex analysis and consultation before making its next recommendation. Once it has made its recommendation, it will of course be up to the Government of the day to decide whether to accept it. I urge the Government to accept that proportionately high increases in the national minimum wage may well be needed to ensure that it keeps pace with inflation, given the costs faced by low-income families. If we are to make work pay, which I know is an objective of this Government, it is particularly important that the national minimum wage reflects the reality of price increases that people are encountering.

I very much hope that the coalition Government will continue the policy we had in government of increasing the national minimum wage at or above the level of inflation and that there is no intention on their part to allow its real purchasing value to be eroded by a failure to increase it in line with the actual prices people have to pay to meet their basic needs. I express those fears because we have already seen the coalition Government decide to use the consumer prices index instead of the RPI to calculate rises in pensions and benefits. I note the increase in the apprentice rate from £2.50 to £2.60. I also note the valid points the Minister made about the accommodation offset and the consultation that took place.

The success of the national minimum wage depends in part on the ability to ensure successful enforcement as a deterrent to those employers who attempt to flout the legislation. Can the Minister give us the latest statistics from the Revenue on enforcement and the number of national minimum wage enquiries raised on the employee rights helpline? I understand that since I did not give notice of those questions, the Minister or his team may not have those statistics to hand. I would be happy if he would let me have those answers in writing. They are important to give us an understanding of where we are going on the national minimum wage. That said, the work of today's Committee is to pass the statutory instruments before us, and I am pleased to support them.

[Lord De Mauley]

My Lords, this has been an interesting short debate and I thank noble Lords for their contributions. The regulations concern important issues that support the Government’s commitment to delivering fairness and supporting business. I believe that the provisions are fair and appropriate.

A number of points have been raised, so let me attempt to address them. My noble friend Lord Teverson commented on the use of the national minimum wage to ensure in the past that employers did not use the welfare state to subsidise their business, and I accept that. He also asked about interns and the Government recognise concerns about the risks of their exploitation. We are working to improve our guidance to clarify when individuals performing work experience, including interns, are entitled to the minimum wage. We will ensure that enforcement of the national minimum wage continues to be effective and that resources are focused where they will have maximum impact. HM Revenue & Customs will conduct a targeted enforcement campaign this year in sectors where internships are commonplace. Work experience as an intern, paid or unpaid, can be a valuable way for young people to gain the experience, skills and confidence that they need to get started in a career, thus improving their prospects. We want as many internship opportunities as possible to be made available to talented young people from all backgrounds, but we are clear that those who are entitled to the national minimum wage should receive it.

The noble Lord, Lord Young of Norwood Green, enjoyed pointing out that the Conservative Party originally opposed the minimum wage. While that is true, the implementation of the minimum wage has shown that it provides a valuable safety net for low-paid employees but that it has not had an adverse effect on their employment. The Conservative Party has therefore supported the minimum wage in recent years. I have sat in the chair opposite, where the noble Lord sits today, and supported the national minimum wage from that Dispatch Box. This support is continued in the coalition commitment I referred to in my opening speech.

The noble Lord also referred to inflation. The aim of the minimum wage is to help as many low-paid workers as possible without having any significant adverse impact on their employment prospects. It is for the Low Pay Commission to consider this in the first instance, as it makes recommendations to Government on the appropriate rate. It would be rash to speculate now on future recommendations. The Low Pay Commission considers a number of issues, including RPI, CPI, average earnings growth, GDP growth, employment and unemployment, and details its findings and the rationale for its recommendations in the reports that it makes to us. We also take these issues into account when deciding whether to agree with the commission’s judgment.

The noble Lord kindly said that he would accept a letter on his final question, and I will write to him.

I commend these regulations to the Committee.

Postal Services Bill

Debate between Lord Young of Norwood Green and Lord De Mauley

Wednesday 6th April 2011 Lords Chamber

[Lord Young of Norwood Green]

I will speak to Amendments 24EC, 24ED, 24FA and 24GA, which stand in my name, and also to Amendment 24EB.

As my noble friend Lady Drake pointed out, there is, at the point of transfer to the new scheme, no clarity in the Government’s proposals regarding a number of issues that are of great importance to members of the Royal Mail pension plan. To begin with, there is the simple issue of who will be the immediate point of contact for scheme members who have a query or concern. The Secretary of State could, at least initially after the transfer, insist on continuity by having the new scheme administered from the current Royal Mail pension centre in Chesterfield. This would guarantee that the concerns of Royal Mail pension plan members are dealt with by staff who are familiar with those members and their problems. Chesterfield would also be seen as a familiar location, with familiar access points via telephone, email and postal address. Such a simple move would go some way to minimising concern during a difficult period of change for postal workers and retired members.

Equally, there is the question of the future governance of the scheme at the point of transfer. The current trustees of the scheme will end their trusteeship. That means that union members and pensioners will lose their current nominated and elected trustees. Whatever the Government’s intentions on these matters for the future, the fact is that at the point of transfer there will be a loss of representation of Royal Mail pension plan members in the functioning of the scheme. Immediately prior to the transfer, existing trustees will not be in a position to provide the assurances and information that are necessary, and which are outlined in this amendment.

In the other place, the Minister sought to give some reassurances on these questions. The honourable Ed Davey said:

“Because we want to continue the high standard of service and support to which members of the pension plan are accustomed, we want to work with the trustees on ensuring that administration is in place. No final decision has been made on how the new governance scheme will be administered, but it is likely that the Government will look—at least initially—to contract the administration of the new scheme to the existing Royal Mail pension plan administrators in Chesterfield. We are speaking with the trustees about that”.

We welcome that statement, and would welcome some reinforcement of it. That was said on 25 November, but what is the position now? Have the Government considered further the issue of contracting the administration of the new scheme to Chesterfield?

On the issue of the new scheme’s governance, the Minister said:

“We understand the importance of pension scheme members having input into running their scheme; that is absolutely common ground between us. We will therefore consider establishing a governance group with member representation for the new public sector pension scheme for current beneficiaries. When considering this, we will take account of the views of stakeholders and practices in other large public sector pension schemes. For example, the NHS pension scheme and the principal civil service pension scheme”.

He went on to talk about the governance group and it being,

“critical that the public sector pension scheme works with the Royal Mail pension plan, in terms of administration, governance and communication”.

He ended his contribution saying:

“We are absolutely committed to that”.—[Official Report, Commons, Postal Services Bill Committee, 25/11/10; cols. 431-32.]

Again, what progress has been made on this question?

If nearly four months later there is no greater clarity then, far from reassuring Royal Mail pension plan members, the Government will be responsible for having caused them greater concern. The intention of the amendment, as my noble friend Lady Drake said, is not to undermine but to seek clarity by obliging the Secretary of State to address Royal Mail pension plan members directly at the point of their greatest concern—that is, before the changes take place. In the absence of any further clarity from the Government, this amendment is surely profoundly important.

In relation to Amendment 24ED, as we noted in a previous amendment, under Clause 17 the Secretary of State has to make an order for the division of assets because of the separation of the pension schemes. There is no intent to prevent this process through this amendment, but there is concern that the trustees are losing control of hard-earned assets. There has to be a will to co-operate closely with the scheme representatives to ensure that there is a smooth transition in separating the schemes. The Bill gives great discretionary power to the Secretary of State; such power would not normally exist with the private employer in a pension scheme, so in order to demonstrate that there will be some checks on this power, we need a clearer picture of the future governance of the scheme. At this point in time, the Government have not had to make plain any detail about the future governance of the new scheme. Are the Government in a position to elaborate on their current thinking on this issue?

On Amendment 24GA, in Clause 24 there is no obligation on the Secretary of State to consult directly with representatives of the unions in Royal Mail. Although elected from and by union members, the members’ trustees are bound by law to act outside the formal democracy and accountability of trade unions. It has to be said that the practice of the Government is better than the formulation in the Bill. Meetings are taking place between the ministerial team and BIS and the elected officials of the union to discuss the future of the pensions plan. That is necessary and sensible. But nothing in this relationship is guaranteed on the face of the Bill. It is not beyond the bounds of possibility that matters between the Government and the unions may take a turn for the worse before the implementation of the new scheme. One hopes that this will not occur, but banking on hope is not a good guide for legislators or those affected by legislation.

I believe that the Government should accept this amendment, because it recognises that the real interests of postal employees have different representative forms. The best practice of this Government is to act on this fact. Now let the Government guarantee this in legislation.

[Lord De Mauley]

My Lords, before I start I should repeat my declaration of an interest in that my wife jointly owns and runs a business which is essentially a web-based mail order company and as such uses Royal Mail for delivery of its product.

Before I turn to the detail of the amendments, it may help if I provide a brief overview of the provisions in Part 2 of the Bill and the intentions behind them. These provisions will allow the Government to take over the historic deficit in the Royal Mail pension plan. As noble Lords are very well aware, the deficit in the Royal Mail pension plan is huge and volatile. As at 31 March 2010, it amounted to £8.4 billion, and the total liabilities in the plan amounted to £34.4 billion. So this pension burden is completely out of proportion to the size of the business. The provisions set out in Part 2 will allow this pension burden to be addressed as part of a package of measures to secure the future of the universal postal service. We propose that responsibility for the deficit will be removed from the business by the transfer of the historic liabilities to a new public pension scheme. Responsibility for ongoing pension accruals and salary-related liabilities will be left with the Royal Mail. Indeed, I think I can say that there is very little difference between this approach and that of the last Government.

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[Lord De Mauley]

My Lords, I am most grateful to my noble friend for his clarification. I hope that I can reassure him that under the current regime, under the Postal Services Act 2000, any operators providing services within the scope of the universal service that have significant turnover are obliged to contribute to the costs. That will be the case under this Bill as well.

The debate that we have heard today, for which I thank noble Lords on all sides for their helpful and knowledgeable contributions, demonstrates that a case can be made to move the access regime in either direction. However, I strongly believe that the provisions in the Bill set the right framework for access—one that supports competition but not at the expense of the universal service. I am of the firm view that Clauses 37 and 48 strike the right balance and, when combined with other powers in the Bill, give Ofcom the tools to ensure a better and more effective access regime. I hope, therefore, that after this rather lengthy explanation, the noble Lord will feel able to withdraw his amendment.

[Lord Young of Norwood Green]

As a matter of historical accuracy, I did not play a prominent part in dealing with the previous Bill. That was done by my noble friends Lord Mandelson and Lord Tunnicliffe, although I was part of the Government.

[Lord De Mauley]

I withdraw my remarks.

[Lord Young of Norwood Green]

I felt that the Minister’s comments were helpful. He has agreed to take away some issues, which would be useful. He stressed the importance of ensuring that competition does not undermine the universal service provision or the role of the universal service provider. It is important to hear those remarks and to have them put on the record. I also welcome the response that he made to the amendment spoken to by my noble friend Lord Brooke. Reserving the right to look carefully at the record and at any further correspondence from the Minister, as well as amendments that may come on Report, I beg leave to withdraw the amendment.

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[Lord Young of Norwood Green]

My Lords, I can understand why my noble friend tabled his amendment, given his long association which started at the GPO—an association which I shared, although not on the postal but on the telecoms side, so we both have a long-standing and abiding interest. We want Royal Mail to have the ability to be profitable as the universal service provider meeting its universal service obligation. That has been the Government’s aim in removing the burden of the pension and in making it clear in today’s comments that they are in favour of competition, but not to the point that it undermines the Royal Mail’s ability to function. If that “profitable” was to take into account the full costs of providing the universal service obligation, we could see the benefit of that. There are some concerns about what implications there might be when that test is applied, such as on stamp tariffs et cetera, but I will certainly be interested to hear the Minister’s response to this amendment.

[Lord De Mauley]

My Lords, Amendment 24GD, moved by the noble Lord, Lord Clarke of Hampstead, seeks to delete “financially sustainable” from Clause 28(3), and replace those words with “profitable”. If I may say so, he makes an important point, as do my noble friend Lady Kramer and the noble Lords, Lord Christopher and Lord Young. There was a long discussion in Committee in the other place over whether financially sustainable meant “profitable”. The Minister for Postal Affairs put it on the parliamentary record, and I would like to do the same today, that this Government absolutely seek for Royal Mail to be a profitable company. Part of the problem and the threat to the universal postal service is that, under the way in which the previous Government managed the postal services sector, Royal Mail has not been making profits and has been a drain on the taxpayer, so at the heart of this concept is the belief that to be sustainable the universal service must make a return for its provider. The only alternative, after all, is perpetual taxpayer subsidy, which is not a realistic, acceptable solution.

Importantly, in addition, “financially sustainable” is a broader concept than simply “profitable”. A company can be profitable in the short term but not necessarily financially sustainable; equally, it can make losses in the short term but have a sustainable future. As I have said, it will be for Ofcom to determine what needs to be taken into consideration when having regard to financial sustainability: the ability to earn a rate of return on investment; profitability; the setting of prices; long-term market volumes, and so on.

As I said in response to the previous group of amendments, the arguments that have already been made on Clause 28 and Ofcom’s duties, both in your Lordships’ House and the other place, have persuaded me to revisit Ofcom’s regulatory duties. The protection of the universal service is of paramount importance and we understand that we must get this absolutely right. That is the very reason why we are taking action and why we brought the Bill forward.

The noble Lord, Lord Clarke, in particular has unrivalled experience of the postal sector and I am always grateful for his contributions to our debates. He made some excellent and important points and I will reflect on them further when considering this issue. Given my commitment to look again at the issue and to bring forward proposals on Report, I hope that the noble Lord will feel able to withdraw Amendment 24GD.

Trade Unions: Ballots

Debate between Lord Young of Norwood Green and Lord De Mauley

Thursday 31st March 2011 Lords Chamber

[Lord De Mauley]

My Lords, I do not think that I have anything to add.

[Lord Young of Norwood Green]

My Lords, this is a complex issue that is probably worthy of a lengthier debate; in seven minutes, even without hesitation, deviation and repetition, we are going to give it only a cursory examination. I trust that the Minister will agree that the seminar at No. 10 this week on encouraging employee engagement, an approach started by the previous Government, is a path worth pursuing. Will he also agree that, during the recent recession, trade unions with enlightened employers agreed to things such as a shorter working week, temporary lay-offs and delayed pay increases to save jobs, using this period also to engage in additional training? Surely the Minister will agree that encouraging constructive dialogue between trade unions and enlightened employers is a much better way forward than trying to restrict trade union recognition.

[Lord De Mauley]

My Lords, I cannot find anything in what the noble Lord said with which to disagree. I will leave it at that.

Wireless Telegraphy Act 2006 (Directions to OFCOM) Order 2010

Debate between Lord Young of Norwood Green and Lord De Mauley

Thursday 16th December 2010 Lords Chamber

[Lord Young of Norwood Green]

My apologies. I meant the noble Lord, Lord Clement-Jones. I hope that he does not take legal action.

I share the noble Lord’s view on the timetable. It would be good for Ofcom to be challenged on the length of the timetable, given the importance of the introduction of 4G.

There is an ambivalent attitude in this country, in that everybody wants a mobile phone and universal coverage, but people do not want a mast anywhere near them. That pushes to one side those who believe, in my view mistakenly, that they will suffer some deadly effect from the rays from mobile masts. It is usually the aesthetics that concern most people. Will the Minister give any steer to Ofcom to ensure that we maximise mast sharing, so that we do not have the countryside or towns littered with more mobile phone masts than we need? I also welcome the commitment to the previous Government’s policy of ensuring universal 2 megabit per second coverage by 2015 and to the superfast broadband trials.

I conclude by sharing the view expressed by the Minister on the role that mobile broadband can play in delivering universal broadband coverage. Does he agree that the best way of extending coverage is through a market where all operators can compete equally? I share the concern of my noble friends Lord Faulkner and Lord Berkeley about the possible impact on rail signalling systems. I would have thought that that would have been drawn to the attention of Ofcom a while ago. No doubt it is something that the Minister will comment on.

[Lord De Mauley]

My Lords, I am very grateful to noble Lords for their comments. We have covered a number of key areas, and a number of interesting and important points have been raised. The Government note the concerns that your Lordships raised during the debate. The noble Lords, Lord Berkeley and Lord Faulkner, raised the important issue of the conflict with the GSM-R rail operators’ frequency. I thank them for that. The Government are fully aware of the potential safety issues involving the use of spectrum, specifically of the 900-megahertz band for mobile broadband services, and of the adjacent spectrum planned for the rail safety network system. Noble Lords are absolutely right that safety is a key priority for the Government, and we will not allow it to be compromised. The level and severity of any possible interference is still being investigated, but discussions are taking place between Network Rail, the mobile operators, Ofcom, BIS and the Department for Transport to address the matter. Further technical work is under way to determine the likelihood of any potential interference and the available technical solutions.

As the noble Lord, Lord Berkeley, said, this is not just a UK issue. The use of these bands is harmonised across Europe, so we are discussing this with the Commission, too. I thank the noble Lords, Lord Berkeley and Lord Faulkner, for their helpful suggestions. I will definitely take them back to the department.

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[Lord De Mauley]

I agree with the noble Lord about the seriousness of the matter. It is, as I said earlier, a complex area. It might be helpful if I wrote to him further about that matter.

The noble Lord, Lord Young, expressed a number of concerns about the auction, competition and coverage. The important thing is that we have asked Ofcom to conduct a competitive assessment of the future development of the 3G and 4G markets in the United Kingdom to inform the design of the auction. Ofcom may well decide that some form of capping is appropriate; the noble Lord referred to that. I agree with him about the importance of competition.

The noble Lord also asked about the benefits for consumers. Again, I broadly agree with him. Widespread next-generation mobile broadband services, which are capable of delivering data at speeds that are considerably in excess of today’s offerings, will be of huge value both to consumers and indeed to business. For the consumer and citizen, access to real-time information while on the move will be invaluable as well as offering a considerable market opportunity to creative industries wishing to develop content.

The noble Lord asked about the perceived blight of masts across the country. One has to say that if people want additional coverage of mobile broadband services, some increase of masts is likely. Given the capital expenditure involved, though, no operator will want to deploy more masts than are necessary to deliver an acceptable level of service.

[Lord Young of Norwood Green]

I agree with the Minister that they will not, but I made the point about encouraging mast-sharing. While I am on my feet—I do not want to do this any more than I have to—there is also the question of universal coverage and how concerned the Government are to ensure that the mobile service is less effective in some parts of the country than in others. How much premium do we put on that?

[Lord De Mauley]

I broadly agree with the noble Lord about mast-sharing. We have it already and I have no intelligence that it is not going to continue. It seems to be in the economic interests of all parties.

The noble Lord’s other question is about coverage. Again, I agree with him about its importance. The Government believe that our approach, particularly given the need to crack on with it, is the way to achieve that, and that the competitive pressures and the number of participants will assist it. A number of technical advances will also assist that.