Draft National Minimum Wage (Amendment) (No. 2) Regulations 2024

Desmond Swayne Excerpts

Monday 18th March 2024 General Committees

[Chris Stephens]

It is a pleasure to see you in the Chair, Mr Hosie. I direct the House to my entry in the Register of Members’ Financial Interests, as I will be raising some issues pertinent to it.

I have been present at every Delegated Legislation Committee since 2015 that has discussed the national minimum wage and its rates. Year after year, those of us who have argued about age discrimination have been mocked, traduced and told that we were talking nonsense. We were told that those aged 25 or over had higher bills than those aged 21. I made the point then that that was a nonsensical position, but was told that I was talking nonsense. However, it turns out that the Low Pay Commission finally agrees with those of us who believe that those aged 21 have the same bills as those who are older.

I welcome that change. Will the Minister take the opportunity, on behalf of his colleagues in years gone by—some of whom are in the Cabinet now, I note—to apologise to those of us who argued the position on age discrimination? I note that age discrimination still exists in relation to national minimum wage rates, and I believe that is nonsensical. Two workers working beside each other, one aged 17 and the other 37—let us say they are flipping hamburgers at a McDonald’s franchise—should get paid the exact same wage for doing the exact same job. I hope the Minister will explore that with the Low Pay Commission to ensure there is no future age discrimination, despite the welcome change that the Government have made.

[Sir Desmond Swayne (New Forest West) (Con)]

Will the hon. Gentleman give way?

[Chris Stephens]

I give way to a good friend I served with on the Work and Pensions Committee.

[Sir Desmond Swayne]

The hon. Gentleman makes a fair point, but—I have employed young people myself—is it not right to allow employers the discretion to discriminate between various employees on the basis of their ability and readiness to work, and indeed to pay a younger employee, perhaps, marginally more for their greater efficiency than another employee, rather than constrain all employers within the tight rules he would impose?

[Chris Stephens]

I thank the right hon. Gentleman for that point. That provision already exists, but we are talking about the minimum wage rate—the very floor—and that should not be subject to age discrimination. He is correct that some employers have grades and spinal column points, and that is allowed. That reflects people’s experience, how long they have been with the employer and all the rest of it. That does happen, but I do not believe the bottom line—the absolute minimum that a worker can be paid—should be subject to any age discrimination at all. We cannot have two workers doing the exact same job on different wage rates because of their age, not because of their experience. There is a difference between age and experience.

I listened intently to the hon. Member for Ellesmere Port and Neston, who is correct about the economic conditions and the fact that in-work poverty still exists. The Government have failed to implement the report that they asked Matthew Taylor for: only seven of the 59 recommendations have been enacted. Now, I do not want every single one of those recommendations to be enacted, but to do only seven out of 59 is disgraceful.

As the hon. Gentleman said, wages are being dragged down in this country through shifts being cancelled and because people are in what I would argue is bogus self-employment—zero-hours contracts. I note that those issues are covered in a private Member’s Bill to be debated on 26 April, the Workers (Rights and Definition) Bill, which is in my name. I hope the Minister and shadow Minister will welcome the Bill and indicate that they will support it.

When I intervened on the Minister, I made, I think, a very important point. I asked how many UK Government workers will benefit from this delegated legislation. I again refer to my entry in the Register of Members’ Financial Interests: I am the chair of the PCS parliamentary group. To the best of my knowledge, there are tens of thousands of UK Government workers who are paid the national minimum wage, including some employed by the Department for Work and Pensions. I invite the right hon. Member for New Forest West, who sits on the Work and Pensions Committee, to have a look at that, because it is a serious issue that so many workers in the Department for Work and Pensions have to rely on the benefits they are administrating because they are on the national minimum wage. I invite the Minister to write to all Committee members and tell us how many Government employees are paid the national minimum wage.

It is not just the DWP—incredibly, some of those on the minimum wage are employed by HMRC. Some of those employed to chase tax avoidance and evasion, and perhaps to tackle multinational companies that do not pay the rates they should, are paid the national minimum wage. Will the Minister write to tell us how many UK Government employees are being paid the national minimum wage? That is important, because the wage increases he has announced today are what UK Government employees will be getting. That will be their only pay increase this year, and I hope he will take that away.

I want to mention enforcement, because it is important that the Government outline how they will enforce this delegated legislation laid today. My concern is that there are far too many vacancies in the national minimum wage rate compliance unit; perhaps the Minister can tell us how many there are. If there are vacancies, they will lead to the backlog referred to by the shadow Minister and the chasing of unpaid wages for years. I hope the Minister will be able to answer those points when he sums up.

--- Later in debate ---

[Kevin Hollinrake]

There has been a significant decrease in the number of people in absolute poverty—millions of people since 2010 and 400,000 fewer children in absolute poverty, which we all welcome. As I said before, in pushing the national living wage as high as we have done, we are putting burdens on businesses. We want to ensure that we strike a balance, and that is our concern with this. We always take into account the concerns of employers as well as workers.

[Sir Desmond Swayne]

I entirely accept the point the Minister makes with respect to the definition of poverty, but the hon. Member for Glasgow South West makes a fair point in drawing attention to the number of people, particularly those employed by Government, who are claiming benefits notwithstanding being paid the minimum wage. It behoves Government to make some analysis of the extent to which the taxpayer is subsidising low wages, albeit one of the principal concerns drawn to my attention by small businesses is every increase in the minimum wage.

I accept that this is a very difficult equation to have to deal with, but I have always suspected that the former Chairman of the Work and Pensions Committee, Frank Field, was right in his assumption that universal credit, like tax credits before it, was actually just subsidising a low-wage economy that would not otherwise exist. There are clearly costs that are not worth incurring here.

[Kevin Hollinrake]

My right hon. Friend is right to say that part of the rationale behind the national living wage is to ensure that wages that employers pay are not being subsidised. The total cost of the welfare system is around £303 billion, some of which is a result of the issue he raised. To me, that is wrong and that is one of the reasons why we would like to see the national living wage increased. Nevertheless, we do not want to see that at the detriment of jobs in our economy.

There is still a balance to be struck on making sure people have the opportunity for predictable hours. That is covered in the legislation we have introduced. I understand that the policy of the hon. Member for Ellesmere Port and Neston is that anybody who has been in work for 12 weeks and is on a contract can request those hours in terms of as a permanent position. I think that is the policy that the Opposition are going to introduce. It will be interesting to see what impact that will have on employers, particularly employers of seasonal workers.

There is a balance to be struck between business and workers. I point out that there are 4.2 million more jobs in our economy than there were in 2010. That is a huge success story. There are 1.2 million fewer people unemployed and looking for work. That is a huge achievement. Some of the policies that Labour always tend to bring forward end up costing jobs. Every single time we have had a Labour Government, unemployment is higher at the end of their term than it was at the start.