Industrial Training Levy (Engineering Construction Industry Training Board) Order 2014
Debate between Lord Young of Norwood Green and Lord Jones(10 years, 9 months ago)
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Lord Young of Norwood Green (Lab)
My Lords, broadly speaking, I, too, welcome the statutory instrument. I thank the Minister for his introduction. I thank my noble friend Lord Jones for, as usual, giving us a historical analysis and some context for ITBs. I was around at the time, but I must admit that I could not remember all that detail about the wholesale slaughter of the industrial training boards.
Lord Jones
I hope my noble friend will allow me to say that the one omission I made in my boring remarks was that I was the opposition spokesman on these matters at that time.
Lord Young of Norwood Green
That accounts for it—it concentrated his mind wonderfully.
It was a helpful introduction by the Minister and I thank him for giving us some of the statistics. I was going to ask him about the number of apprenticeships and he gave us that figure, together with completions. Perhaps he could disaggregate that figure a bit further: how many apprenticeships were there in the 16 to 18 age group, and in the 19 to 24 age group? How many high-level apprenticeships were there?
Also, how many apprenticeships are there in this sector in public procurement contracts? I am sure that the Minister remembers the many occasions on which I have berated the Government for their failure to insist on a compulsory requirement for apprenticeships in public procurement contracts. It would be interesting to know how many apprenticeships in this sector are involved with public procurement contracts.
There is one other aspect of the construction industry that is still a matter of concern. The thresholds are based on the number of employees, but, unfortunately, it is still a well known practice in the construction industry—
National Minimum Wage (Amendment) Regulations 2014
Debate between Lord Young of Norwood Green and Lord Jones(10 years, 9 months ago)
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Lord Jones (Lab)
My Lords, I thank the noble Viscount, Lord Leckie, for his useful introduction—if I may call it that. Looking at the Explanatory Memorandum to the National Minimum Wage (Variation of Financial Penalty) Regulations, I think that it appears to the reader here in Grand Committee to be a helpful, positive approach.
I welcome a tougher approach—that may be quoted—and the aim of skilling the young unemployed must be welcomed. I note that on this matter he mentioned England but, perhaps understandably, he did not venture to mention Wales. Is he able to give any information when he replies to the Committee as to what is happening in Wales on this matter?
It is also worth welcoming the aim of increasing compliance, which will necessarily involve instituting criminal proceedings. We heard in the Committee just now a very welcome commitment to the national minimum wage itself, which is a foundation statement when bringing in legislation such as this to your Lordships’ House. However, I recollect that in another place, when the national minimum wage was proposed by the Government of Mr Tony Blair, the opposition to it was somewhat lengthy and rather loud. It is good to hear from Her Majesty’s Government now a different tone of voice and a very obviously sincere commitment from the Minister.
With reference to the legislative background, we can only give three cheers to the phrase in the Explanatory Memorandum which states that,
“workers are entitled to be paid at least the minimum wage which is specified as one of four hourly rates”.
Also, paragraph 4.2 states that,
“the officer may serve a notice of underpayment requiring the employer to pay arrears to the worker or workers named in the notice”.
We can only imagine the difficulties of young people who are getting a miserable wage by law—some are not getting even that—and trying to make their way in a very difficult climate. Her Majesty’s Government should not lose sight of that dreadful situation across the nation today.
The Explanatory Memorandum also makes clear that there will be a requirement on,
“the employer to pay a financial penalty to the Secretary of State within 28 days of service of the notice”.
That has to be welcome, but I have questions concerning the policing that aims to prevent underpayment. Is the Minister able to tell us how many people make up that specific unit in HMRC’s enforcement section? If the work of the Government is to be done effectively, one hopes that that specific arm of government is adequately staffed. Often the suspicion is that HMRC is not adequately staffed, and it would be reassuring to hear what the numbers are.
Secondly, is the Minister able to tell us the total amount of fines for the latest available year? What was the largest fine imposed? Is he able to throw any light on that large fine, such as the details of the company? Is he able to enlarge on the answer, should he have it available to him?
Lord Young of Norwood Green (Lab)
My Lords, I thank the Minister for his introduction of these statutory instruments. I will deal with the traineeships first.
When reading the Explanatory Note, I noticed that the traineeships do not get any pay, or if they do it will be up to the employer; nor is there any requirement to pay travel expenses or lunch et cetera. I wonder how much the travel expenses—never mind the lack of pay—act as a deterrent to young people taking up these traineeships.
Obviously, we welcome anything that makes young people more employment ready. There was a reference to English and maths, but I am always surprised these days when I do not see any reference to IT. That is now such a key part of any young person’s employment capabilities that I would have thought it would have been in the mix.
It was also interesting to hear from the Minister that 500 training organisations have agreed to deliver these traineeships. As we know from experience, some of the apprenticeship training that was being delivered lacked quality and the Government had to take action. Bearing that in mind—it is not only this Government who have suffered, as we also had some difficult experiences—I think that it really emphasises the need to ensure that there is a monitoring process to ensure that we are getting value for money and a quality training process.
On minimum wage compliance, there have been lots of announcements by the Government. I certainly welcome the number of probing questions asked by my noble friend. I will be interested to hear the Minister’s answers. The Government have been saying over a period of time that they are going to “name and shame” those firms. It might act as an extra deterrent if they did so. Like my noble friend Lord Jones, I welcome the Government’s espousal of the minimum wage. He is absolutely right to remind us of the dire predictions that were made at the time about the terrible effect that it was going to have and the millions of jobs that were going to be lost—not taking into account the impact on millions of workers who were being paid, in some of the worst examples, £1 an hour.
I am glad that the Government are now fully in favour of the minimum wage, although not every Conservative Member of Parliament seems to be—indeed, some of them have put down Motions calling for small firms to be exempted from paying it. I would welcome some assurance that the Government will not be going down any such road. Given their previous strange decision regarding their magnificent bargain offer to employees to get rid of their employment rights in return for shares, I wonder what take-up there has been on that. It was almost like buy one get one free—if you believe in that, clearly you also believe in a free lunch.
To return to this statutory instrument, I found myself a bit confused by all the statistics being given by the Minister. I think I have this right: he talked about there being £45 million of arrears; I was not sure how many complaints that had resulted from. I could not quite comprehend whether or not these figures were going down as a result of the enforcement. That is what we want to see. I was pleased to hear the Minister introduce the pay and work rights helpline. It seems to be carrying out its function.
We welcome the higher penalties, although we probably think that they should be even higher still because there still seems to be a significant number of employers that believe they can get away with not paying the minimum wage, which is a real disgrace. The Minister and the noble Lord, Lord Jones, referred to getting a 50% reduction if you pay what you should have been paying. I suppose that I can see some logic in that if it gets them to pay up, but I would like some assurance that, if the same employer were to commit this offence again, we would not allow them to have a second chance of getting a 50% reduction. Would that apply if there were a repeat offence?
To summarise, we generally welcome this measure. I would be interested to know why we have not yet had any examples of the Government actually naming and shaming employers, which might act as a further deterrent, and I would like some clarification on how many cases of enforcement there have actually been over the period that this has been taking place.
Public Bodies (Abolition of the Aircraft and Shipbuilding Industries Arbitration Tribunal) Order 2013
Debate between Lord Young of Norwood Green and Lord Jones(11 years, 11 months ago)
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Lord Young of Norwood Green
My Lords, I, too, support the order. As usual, I am grateful to my noble friend Lord Jones for a tour d’horizon and history lesson. Some of it I remembered well, and some not so well—so I was exceedingly grateful. I hesitate to correct him on one matter, and he can tell me whether I have got it wrong, but I thought that, in relation to the Upper Clyde, it was not just an occupation but a work-in that Jimmy Reid organised, which was unusual at the time.
Lord Young of Norwood Green
I know that because it was not so long ago that there was a programme on Radio 4 relating to it. However, the noble Lord, Lord Jones, was right to give us that historical context and to set the scene.
I have read the report from the committee. There was some concern about the consultation, but I think that in the end it was prepared to accept that it was sufficient, so I have no further comments to make.
Post Office Network Subsidy Scheme (Amendment) Order 2010
Debate between Lord Young of Norwood Green and Lord Jones
Lord Jones
My Lords, I thank the noble Baroness for her introduction, which was helpful. I support the order and think that those who originated the network subsidy scheme deserve high praise. It is heartening to hear of a continued determination to keep what is left of the Post Office network. Support for the network of 11,500 branches is good news and I think that it will be acclaimed across the nation.
From my work in another place over many years, it quickly became obvious that any community worthy of the name needed a post office and a school, and this order may well hold the line in terms of our communities. These are big amounts of money and they must be welcomed.
One always speaks from experience, so I instance the sub-post office of Llanfynydd in Flintshire. It is tiny, it is valued and it is the village centre. Nothing is too much trouble for the family who run it. Situated on a Welsh hillside at 800 feet, adjacent to a church and a school, it is the centre of a far-flung, Welsh-speaking community. I do not think that any praise is too high for this particular sub-post office, and I make that statement in the knowledge that there are many hundreds of such sub-post offices across the nation. Long may they remain open, giving our communities the service that they need.
I hope that this order will guarantee the survival of post offices such as the one in Llanfynydd in Flintshire. I think that Wales will benefit from what is being proposed and I welcome the order very much.
Lord Young of Norwood Green
My Lords, I could not help smiling when the Minister defined the Royal Mail and the Post Office because I remember when it was called the GPO, which dates me slightly. I was also an employee and, as I recall, the postmaster-general at the time was Anthony Wedgwood Benn. How time passes when you are enjoying yourself.
We welcome the increased subsidy. However, as the Merits Committee helpfully issued a health warning and said that the Order should be considered in conjunction with the Postal Services Bill, it is only appropriate that we register our concern about the impact of the Postal Services Bill. Of course we welcome the increased subsidy, but we would like to see enshrined in legislation the principle that the Post Office network should be used as the access points for Royal Mail.
We believe that the Secretary of State should have the power to specify exactly how many access points there should be. The reason for that is that it has been suggested that a privatised Royal Mail company might think that its needs could be served by a network of some 4,000 outlets. Currently, we have 11,900 post offices. I certainly endorse the comments of my noble friend Lord Jones about the vital importance of these post offices to the local community. Of that number, some 7,000 or so could be adequate to meet the access criteria that were introduced by the last Labour Government and have been accepted by this Government and spelt out again in their recent document on the future of the Post Office network in the digital age.
The criteria spell out that the access criteria introduced by Labour meant that, as the Minister said, 99 per cent are to be within three miles of their nearest outlet and 90 per cent should be within one mile. The access criteria continue with a more detailed definition in relation to urban and rural areas. The purpose of the criteria is to ensure reasonable access to post offices in both urban and rural areas. Without them, there would be no control of the overall shape of the Post Office network. We believe that a viable sustainable Post Office network is a critical part of the social infrastructure for many communities, which I was pleased to hear the Minister seemed to endorse. That is why we introduced the access criteria: to ensure that communities would continue to be fairly served by a national Post Office network. As I said, these access criteria could be met with something like 7,000 post offices, but we put in an additional investment so that we could keep the number at 11,900.
If the Government are serious about wanting to keep that number of post offices open and keep the network as we know it now, there should be a mechanism that the Government can use. The Secretary of State should have the power to specify the number of post offices to be used as access points for the services of the provider of the universal postal service. I am talking about that in the context of a privatised Royal Mail.
The Minister might argue that it is up to the privatised business what it decides to do, how many access points it uses and where those access point are located. That is precisely our concern. The nature of the relationship between Royal Mail and the Post Office in a privatised environment would be different. Will there be the current inter-business agreement that safeguards that relationship? We are talking about a national network and a universal service that we all agree we want to be easily accessible to everyone in the UK. Given that all parties on both sides of the House now agree on the access criteria of post offices, we cannot see any good argument for the Secretary of State not having the power to specify not only that the provider of the universal service should use post offices as access points but how many post offices that should be. If the Government are serious about protecting the Post Office network, the straightforward solution would be to enshrine in the Postal Services Bill that the Secretary of State should have that power.
We are talking about using large amounts of taxpayers’ money to subsidise the Post Office network. Therefore we want to make sure that that money is used to preserve that as part of the universal postal service. It seems that other countries have no problem about not letting the Government have a say in this. Elsewhere, where there has been privatisation of the mail service—we make it clear that we are opposed to complete privatisation—there has also been legislation to protect the post office network and specify its use as access points for the universal postal service.
National Minimum Wage (Amendment) (No. 2) Regulations 2010
Debate between Lord Young of Norwood Green and Lord Jones
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.
Lord Young of Norwood Green
My Lords, I, too, welcome the statutory instrument before us, which proposes to make a change so that payments by an employer for travel expenses to a temporary workplace which are eligible for tax relief will not count as pay for national minimum wage purposes. I certainly endorse the comments made by my noble friend Lord Jones, and I shall come later to the tour de force and analysis from my noble friend Lord Myners.
It is right to remind ourselves that the national minimum wage was introduced by the Labour Government in 1999 in spite of all manner of scaremongering. I remember talk from some sections of the right-wing press of 2 million jobs being at risk, and of course the legislation was opposed by the Conservative Party at the time, so we welcome the conversion, although I would not call it a pauline conversion. When it was introduced, the minimum wage raised pay for more than 2 million people. 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. Those increases raised the living standards of the lowest paid and helped to close the gap between men’s and women’s pay. We should not forget those fundamental changes that took place.
I certainly endorse the point that my noble friend Lord Myners made about the importance of compliance and enforcement. It took us a while before HMRC and the employment agency services group got around to ensuring that they prosecuted those people who failed to pay the minimum wage. I would welcome some reassurance on that. I very much hope that the coalition parties will continue our policy—to endorse again a point made by my noble friend Lord Myners—of increasing the national minimum wage at or above the level of inflation. I also hope that there is no intention on the coalition’s part to allow the national minimum wage to wither on the vine. I express those fears because we have already seen the coalition Government decide to use the consumer prices index instead of the retail prices index to calculate rises in pensions and benefits, which will gradually erode pensioners’ income.
How does the use of such a scheme affect the workers? I pay tribute to the helpful analysis of the Merits of Statutory Instruments Committee, which gave us a useful assessment of the effect on workers and their take-home pay. Just as important is what it will mean for them in future entitlements. If the money that one takes home equates to the minimum wage and is made up partly of wages and partly of an amount for travel, the actual wage is rather less than the minimum wage. In cases that Her Majesty’s Revenue and Customs has seen, workers who are paid the national minimum wage and who use a travel and subsistence scheme can find that as much as 40 per cent of their wages are paid as travel and subsistence expenses.
In making up our mind about whether we should support the proposed instrument, one of the things that certainly influenced us was that the Low Pay Commission, the Equality and Human Rights Commission and the Gangmasters Licensing Authority all endorsed it, as the Minister said. Over the past five years the HMRC compliance teams have interviewed an estimated 400 to 500 workers, the majority of whom were paid at or near the minimum wage. Virtually none of them understood in any meaningful way the contractual terms of their engagement. The possibility of exploitation is a real worry.
The access to earnings-related contributory benefits, which is based on a worker attaining the qualifying earnings factor, can therefore be affected. The effect of participating in travel and subsistence schemes is to reduce the amount of a worker’s pay on which national insurance contributions are paid, depending on how many weeks they are unable to work for, and puts at risk their ability to achieve the qualifying earnings factor. That is most likely to affect eligibility for both basic and additional state pension.
I understand from the impact assessment that the schemes we are discussing are likely to involve some 90,000 out of a possible 1 million people. I would like some confirmation of that. It endorses another point that my noble friend Lord Myners made. The change proposed in the legislation could have a negative impact on some workers who are currently in such travel and subsistence schemes because only part of the amount that a worker takes home is pay, and gross pay is assessed for tax purposes. Some workers, because they receive less pay, may be entitled to more working tax credit. Under the regulations, some people could find that they are entitled to less working tax credit because more of their take-home money will be pay. However, such individuals have until now had an advantage over other workers with similar levels of income who are not in such schemes. This legislation will end the unfairness that travel and subsistence schemes create. We endorse the point that the Minister made: workers who participate in them artificially benefit from enhanced eligibility for tax credits, compared to other workers who do not or cannot participate.
What steps will the Government take to ensure that any workers whose eligibility for working tax credit will be affected are properly informed about the change? That is important. We know that tax credits have been a huge boost to those on low incomes and have been recognised as helping to reduce the gap between rich and poor. I am sure that I am not the only Peer who has had to deal with people whose circumstances have changed and where workers are then faced with a clawback, where they must pay back an overpayment of tax credit. I stress that we want to know what the Government will do to ensure that anyone affected by the measure is kept fully informed and does not end up, months down the line, in a situation of being asked to pay back money that they simply do not have.
That said, we support the motivation behind this statutory instrument because we believe that it will prevent exploitation and ensure that the contributory benefit position of temporary workers paid at or near the national minimum wage is not prejudiced by the reduction of earnings liable to pass on national insurance contributions. We also support it because the intention is to ensure that employment businesses and umbrella companies do not gain an unfair competitive advantage through the use of travel and subsistence schemes for temporary workers. I, too, look forward to the answers to the issues raised by my noble friend Lord Myners.