National Minimum Wage

Brooks Newmark Excerpts

Wednesday 15th January 2014 Commons Chamber

[Julian Smith (Skipton and Ripon) (Con)]

rose—

[Mr Brooks Newmark (Braintree) (Con)]

rose—

[Rachel Reeves]

I am so shocked. We have two interventions from Government Members. I will happily give way to not one, but two Government Members.

[Rachel Reeves]

For 41 of the 42 months that the Prime Minister has been in office, prices have risen at a faster rate than wages, and that continues to be the case. The only month that it was not the case was in April last year, when bank bonuses were deferred from March to April to take advantage of the cuts in the top rate of tax from 50p to 45p. [Interruption.] That is the only month in which prices grew at a slower rate than wages, not for ordinary workers, but the privileged few who the hon. Gentleman’s party always supports.

[Mr Newmark]

Will the hon. Lady—[Interruption.]

[Madam Deputy Speaker (Mrs Eleanor Laing)]

Order. The Chair has noted that the hon. Member for Skipton and Ripon (Julian Smith) has departed immediately and too soon.

[Mr Newmark]

I fear that the hon. Lady’s answer might have frightened my colleague away. I promise that I will not run away after she answers me. Will she at least acknowledge that this Government, by raising to £10,000 the level at which tax hits, thereby taking 2.7 million people out of taxation altogether, have indeed helped the low-paid?

[Rachel Reeves]

Work by the Institute for Fiscal Studies has shown that, taking account of all the changes to taxes, tax credits and benefits since the Government came into office, the average worker is now £850 worse off. The hon. Gentleman points to one thing, but the VAT increase means that people are worse off, as do the tax credit changes. Overall, when all those things are added up, people are worse off, not better off. I hope that he will stay a little longer than his colleague to hear a bit more of the debate.

We know that we need to build on the success of the national minimum wage, because today we face a new challenge: getting our economy working for working people and tackling the worst excesses of insecurity and exploitation in our labour market.

--- Later in debate ---

[Mr Brooks Newmark (Braintree) (Con)]

I am delighted to follow the robust speech by the hon. Member for Derby North (Chris Williamson). I am probably the first Conservative in the Chamber to begin mine by supporting the first part of the Opposition motion, which states:

“That this House celebrates the 15th anniversary of the introduction of the National Minimum Wage”.

I support the minimum wage, as I believe all Government Members do, because it is important to make work pay, to boost living standards and to tackle in-work poverty. I cannot, however, support the rest of the motion.

The Secretary of State for Business, Innovation and Skills recently said:

“Anyone entitled to the national minimum wage should receive it. Paying anything less than this is unacceptable, illegal and will be punished by law. So we are bringing in tougher financial penalties to crackdown on those who do not play by the rules. The message is clear—if you break the law, you will face action. As well as higher penalties, we have made it easier to name and shame employers who fail to pay their workers what they are due.”

[Mel Stride]

Does my hon. Friend agree that it is a significant step forward that the fines will now relate to the individuals who have not received the minimum wage, rather than to the companies?

[Mr Newmark]

I thank my hon. Friend for that intervention. I will go into that matter in a little more detail in a minute.

The Government are taking strong action to deal with the last Labour Government’s failure to have a robust system of enforcement for the national minimum wage. I welcome this week’s announcement that tougher financial penalties will be brought in to crack down on those who do not play by the rules.

[Justin Tomlinson (North Swindon) (Con)]

I support everything that my hon. Friend has said. When I was an employer, I always recognised that I would get what I paid for. When a business is successful, that success should be shared with its employees. I welcome the fact that the Government are increasing the fines and are naming and shaming businesses, but I want to see the naming and shaming of the decision makers who disgracefully choose to exploit their staff.

[Mr Newmark]

My hon. Friend is right that there should be more publicity about those who abuse the system. Naming and shaming is a good idea.

To put some numbers on what has been said about penalties, in 2012-13 HMRC identified 736 employers who had failed to pay the national minimum wage, which led to the recovery of £3.9 million in unpaid wages for more than 26,000 workers. This week’s announcement will see the penalty for rogue employers raised to up to £20,000. The Government are taking punitive, robust action.

We should not forget that the last Labour Government left us with the biggest recession in recent history. This Government are helping some of the lowest-paid people in our society by raising the tax threshold and taking more than 2.7 million people out of tax altogether.

[Mr Anderson]

Will the hon. Gentleman give way?

[Mr Newmark]

No, I cannot take any more interventions.

Furthermore, under this Government we have seen a net increase of almost 1 million jobs. That means that a record 30 million people are in work. In other words, more men and more women are in work than ever before. Youth unemployment is falling. In the past three months, it has fallen by 19,000. I warmly welcome the abolition of employer’s national insurance contributions for the under-21s, which is something that I have campaigned for hard over the past year with the Million Jobs campaign. I encourage businesses to take on young people and to give our young men and women their first step on the job ladder.

The cost of living is an issue for the low-paid. Given that the recovery is well under way, I ask the Government at least to consider increasing the minimum wage further. I believe that would be a win-win. It would be a win for the low-paid because it would help with the cost of living issues that have been raised by Opposition and Government Members. It would also be a win for the Exchequer because it would reduce the amount that is paid in tax credits. Notwithstanding that, I support the Chancellor’s position that we should leave the final judgment to the Low Pay Commission, which takes into consideration the impact on overall employment and on businesses.

Although I join Opposition Members in celebrating the 15th anniversary of the introduction of the minimum wage, I believe that the Government are tackling the issues that they have raised. I therefore cannot support the overall motion, but will support the Government amendment.