Draft National Minimum Wage (Amendment) Regulations 2020 Draft National Minimum Wage (Amendment) (No. 2) Regulations 2020

Chris Stephens Excerpts

Tuesday 17th March 2020 General Committees

[Chris Stephens (Glasgow South West) (SNP)]

I apologise for being slightly late for the Committee, Mr Paisley. I was in the advertised room, where they were discussing Buckinghamshire, but I managed to avoid that—

[The Chair]

Today is your lucky day.

[Chris Stephens]

Indeed, Mr Paisley.

I have a couple of questions for the Minister. I am looking at the percentages that the Low Pay Commission has recommended. It is welcome that an increase of 6.5% is going to 21 to 24-year-olds. Is there an explanation as to why there is a lower increase for the development rate and the youth rate, for example, which are going up by only 4.9% and 4.6%? I am sure I am not the only Member of the House who has some issues with the age rates. Should people who are 21 really be getting the same rate as someone who is 25?

Secondly, the Government may describe this as the national living wage, but it is not the real living wage as far as we are concerned. The real living wage is £9.30 an hour. When does the Minister envisage the Government’s living wage being equal to the living wage applied and calculated by other organisations?

The Minister mentioned compliance. Do the Government have any plans to increase the number of employees employed by the national minimum wage compliance unit? It is important that there is strict compliance and regulation.

Another question relates to the current covid-19 pandemic. The Minister will be aware that the Government are discouraging citizens from going to pubs, nightclubs and so on. A lot of employees in the sector will be paid the national minimum wage. Are the Government encouraging the payment of the national living wage for people employed in pubs and nightclubs, which might very well close?

On Government contractors, are the Government encouraging the living wage to be paid, and are they ensuring that, when they issue contracts, the living wage applies? Can the Minister also tell us how he will make sure that employers do not use tips to qualify for the national minimum wage? That is still an issue in the hospitality sector, and it needs to be tackled.

--- Later in debate ---

[Paul Scully]

Unfortunately, I am not the Chancellor, but I look forward to the statement this evening. At this time, it is important that we continue to speak out daily for businesses and, as the hon. Gentleman rightly points out, for the self-employed, for workers and for people who are worried not just about their jobs and the viability of the business, but about shifts in those areas. Make no mistake, we have all seen in our inboxes the amount of concern out there, so it is so important that we continue to address the concerns of self-employed workers, employees and businesses. The Chancellor introduced a timely and targeted package last week in his Budget, but things are clearly moving at pace, and we will see what he says during his statement at 7 o’clock.

On the future of the national living wage, although we are increasing it and getting through the technicalities now, it is really important to reiterate the point about younger workers. We are planning to extend the reach of the national living wage to workers aged 23 and over from April 2021, and to workers aged 21 and over by 2024. Unfortunately, I suspect that the children of the hon. Member for Ellesmere Port and Neston will have already reached that higher level by that time.

A UK-wide minimum wage, recommended by the independent expert Low Pay Commission, ensures that the pay of the lowest paid in society is protected, and means that businesses compete on a level playing field. In 2016, the Government committed to raising the national living wage to 60% of median earnings, and we have stayed true to that commitment. We have the highest employment rate since comparable records began. The strength of our labour market shows that a higher minimum wage can go hand in hand with strong employment growth.

[Chris Stephens]

Before the Minister continues, he did not answer my question about employers using tips to reach the national living wage. That is a form of cheating that happens in the hospitality sector in particular. Will he respond to that specific point?

[Paul Scully]

Forgive me, I missed that one. The current rules are clear that tips do not count towards pay for national living wage purposes. That is part of the education that we need to ensure that the hospitality sector adheres to and does not fall foul of those rules, whether or not employers know about them. That is an area of possible exploitation and can be an area of ignorance, which is no excuse. We will shortly introduce legislation to ensure that 100% of tips go to workers, which I am sure will be welcomed in the hospitality industry.

Our pledge to raise the national living wage to two thirds of median earnings by 2024, taking economic conditions into account, makes the UK the first major economy in the world to set such an ambition. We will soon publish the remit for the Low Pay Commission, which will include recommending the national living wage rate to apply from April 2021—that is the first step on the path to two thirds of median earnings. We will continue to come down hard on employers who fail to pay the minimum wage.

The regulations and accompanying non-legislative measures show that we are committed to helping employers get the rules right at the first time of asking and without the need for enforcement. I commend the regulations to the Committee.

Question put and agreed to.

Resolved,

That the Committee has considered the draft National Minimum Wage (Amendment) Regulations 2020.

draft national minimum wage (Amendment) (No. 2) Regulations 2020

Resolved,

That the Committee has considered the draft National Minimum Wage (Amendment) (No. 2) Regulations 2020.—(Paul Scully.)