National Minimum Wage

Andy Sawford Excerpts

Wednesday 15th January 2014 Commons Chamber

[Rachel Reeves]

I could not agree more with my hon. Friend. If more people were paid a living wage, if the minimum wage were enforced and if more people who want to work full time were doing so rather than working part time, all those things would help bring down the rising costs of social security.

A Britain where people who are putting in the effort and the hours still cannot make ends meet cannot be right and it is not fair. A Britain where parents who want to spend more time with their family and children but can hardly see them because they have to take on a second job is not right and it is not fair. A Britain where a young worker who wants to go to evening classes to improve their prospects but cannot because they have to take on an extra shift in the evening just to make ends meet is not right and it is not fair. A Britain where a woman cleaning the offices of well-paid executives before they arrive in the morning and who is still at work in the evening serving on the supermarket tills is not right and it is not fair.

This is not just an injustice to those families. It is, as my hon. Friend has said, imposing cost on the rest of us as well, because lower pay means more money spent on tax credits and housing benefit. The bills of in-work poverty are rising faster than this Government can cut people’s entitlements. It also means less tax and national insurance going into the Government’s coffers. If we want to get the costs of social security under control and if we want to put our public finances on a sustainable footing, we need to get our economy working for working people, so that we can all earn our way out of the cost of living crisis that this Government have created.

What solutions do Government Members have to offer? As my hon. Friend the Member for Feltham and Heston (Seema Malhotra) has indicated, the hon. Members for Christchurch (Mr Chope), for Wellingborough (Mr Bone), for Cities of London and Westminster (Mark Field), for Windsor (Adam Afriyie), for Clacton (Mr Carswell) and for Bury North (Mr Nuttall) sponsored a Bill that would have enabled employees to agree with their employers that they should not be paid the minimum wage. The hon. Member for South Northamptonshire (Andrea Leadsom) has said that people working for businesses with three employees or fewer should not have to be paid the minimum wage. The hon. Member for Esher and Walton (Mr Raab) has said that 16 to 21-year-olds should not have to be paid a minimum wage. The hon. Member for Shipley (Philip Davies) has said that disabled workers should not have to be paid the minimum wage. Shame on them and shame on the Conservative party. It is the same old story from the same old nasty Tories. Their only answer to our economic problems is to cut taxes for the richest and cut pay for the poorest.

[Andy Sawford (Corby) (Lab/Co-op)]

The push to stop a minimum wage for 16 to 21-year-olds is appalling at a time when the Government have made life so difficult for that group of people in our society through their changes to the education maintenance allowance and the increase in tuition fees, which the Liberal Democrats, of course, promised would not happen. It is absolutely wrong and we must fight it.

[Rachel Reeves]

I could not agree more with my hon. Friend. With almost 1 million young people out of work—250,000 of them for more than a year—hitting them further by saying that they should not be entitled to a minimum wage is doubly unfair, cruel and callous.

--- Later in debate ---

[Andy Sawford (Corby) (Lab/Co-op)]

It is a pleasure to speak in an incredibly important debate that has huge implications for people in my constituency. In 1905, boot and shoe workers from the second-largest town in my area, Raunds, marched near Parliament to demand fair pay from the War Office, and they won their campaign. There is a long tradition in my constituency of fighting for a living wage, and we all owe a debt of thanks to those hon. Members who passed the minimum wage in 1997. It was, indeed, a great achievement for the Labour party—not just that Labour Government, but the Labour movement—in more than a century of fighting for a better standard of living for working people in this country.

Today, though, my constituency is plagued by problems, particularly in connection with employment agencies that treat many workers unfairly and make unfair deductions from pay—for example, transport costs, unlawfully charging for personal protective equipment and making workers pay a payroll company just to get their own very low pay—and those deductions take people below the minimum wage. The latest scandal involves local agencies charging workers £2.50 a week for personal accident insurance, which they buy for pennies and then sell on at a profit to the worker, when of course the worker is already protected by the employer’s liability insurance. It is another way of bringing down the employer’s premium and scamming the workers.

I am grateful to the hon. Member for East Dunbartonshire (Jo Swinson), who I wish well—she recently gave birth to a son—for supporting me in getting Her Majesty’s Revenue and Customs and the Employment Agencies Standards Inspectorate to come to Corby to investigate the 32 agencies operating in my area. They found that 12 agencies were breaching the minimum wage law and that £120,000 was payable to more than 3,000 local workers. Two of the investigations have been completed, and penalty charges totalling £1,532 and wages totalling £3,154 have been paid back to workers, but that is just the tip of the iceberg. These are very small figures. The remaining 10 agencies have an average of £12,000 to pay back to local workers, but for some of the largest agencies—they are also national agencies—operating in my area that figure will be up to £40,000 or £50,000.

On the two agencies that have had to pay penalty charges, I must say to the Government that it really is not much money. Having to pay back £1,532, having scammed local workers out of £3,154, is hardly a deterrent to them and other local employers. I appreciate the support from the Government so far, but will the Minister consider whether, in those cases, fines should have been imposed? We know that they have breached the law. If in the other 10 cases we find even more substantial breaches, as we surely will given the figures HMRC is looking at, I hope we will impose fines. I welcome the move to increase the fines announced today. I would like it to go further, but let us acknowledge that the Government are moving in the right direction. Enforcement is critical, however. The increase in the fines is meaningless unless we take enforcement action to deter people from breaching the law. It is a huge rip-off.

We have taken other initiatives. I am delighted that Channel 4’s “Dispatches” worked with me to investigate the issues in my constituency and did some undercover reporting that was shown on Channel 4. A director of Staffline, one of the biggest agencies in my area with known issues of exploiting workers, was filmed saying that he could ensure, through a legal loophole, that Corby workers would be paid less than workers for a particular company on another site in this country. That is absolutely wrong. These agencies find ways to exploit workers and help companies to do it.

The companies are responsible for their own actions. I say to them all that they should sign up to the employment agency charter that we have launched in Corby. Some of the best agencies have worked with us because they are proud of their practice. There is a role for temporary employment and there can be a role for agencies in certain circumstances. Some of our local employers have signed up, too, but I want them all to sign up. I want them to know that if they do not, we will be on their backs; and that if they break minimum wage law, the Government will fine and fine them properly so that they do not do it again.

I had hoped to cover other issues on the living wage and, in particular, on zero-hours contracts. I hope all hon. Members will support my private Member’s Bill on zero-hours contracts, which I shall introduce next Friday.