Artificial Intelligence and the Labour Market

Justin Madders Excerpts

Wednesday 26th April 2023 Westminster Hall

[Justin Madders (Ellesmere Port and Neston) (Lab)]

It is a pleasure to see you in the Chair, Dame Maria. This has been a thoughtful and engaging debate on an important subject, and the contributions have raised very important issues.

I particularly thank my hon. Friend the Member for Birkenhead (Mick Whitley) for introducing this debate. I thought his opening remarks about me were uncharacteristically generous, so I had a suspicion that it did not all come from him—if he wants to blame the computer, that’s fine! As he did, I refer to my entry in the Register of Members’ Financial Interests. My hon. Friend has a long history in the workplace and has seen how automation has changed work—particularly the kind done at Vauxhall Motors in Ellesmere Port—dramatically over many years. What we are talking about today is an extension of that, probably at a greater pace and with greater consequences for jobs than we have seen in the past.

My hon. Friend the Member for Birkenhead said there will be winners and losers in this; that is very important. We must be cognisant of sectors affected by AI where there will probably be more losers than winners, including manufacturing, transport and public administration. My hon. Friend hit the nail on the head when he said that we must have a rights-based and people-focused approach to this incredibly complicated subject. He was right to refer to the TUC paper about the issue. We cannot go far wrong if we hold to the principles and recommendations set out there.

The hon. Member for Folkestone and Hythe (Damian Collins) made an excellent contribution, showing a great deal of knowledge in this area. He is absolutely right to say that there has to be a level of human responsibility in the decision-making process. His references to AI in defence systems were quite worrying and sounded like something from the “Terminator” films. It sounds like dramatic science fiction, but it is a real, live issue that we need to address now. He is right that we should ensure that developers are able to clearly demonstrate the data on which they are basing their decisions, and in saying that the gig economy is a big part of the issue and that the intervention of apps in the traditional employment relationship should not be used as a proxy to water down employment rights.

The hon. Member for Watford (Dean Russell) also gave a very considered speech. He summed it up when he said that this is both amazing and terrifying. We have heard of some wonderful things that can be done, but also some extremely worrying ones. He gave examples of deception, as well as of the wonderful art that can be created through AI, and encapsulated why it is so important that we have this debate today. Although the debate is about the potential impacts of AI, it is clear that change is happening now, and at a dramatic pace that we need to keep up with; the issue has been affecting workers for some time now.

When we survey the Government’s publications on the impact of AI on the market, it is readily apparent that they are a little bit behind the curve when it comes to how technologies are affecting the way work is conducted and supervised. In the 2021 report, “The Potential Impact of Artificial Intelligence on UK Employment and the Demand for Skills”, and the recent White Paper that was published last month, there was a failure to address the issues of AI’s role in the workplace. The focus in both publications was the bigger picture, but I do not think they addressed in detail the concerns we have discussed today.

That is not to downplay the wider structural economic change that AI could bring. It has the potential to have an impact on demand for labour and the skills needed, and on the geographical distribution of work. This will be a central challenge for any Government over the next few decades. As we have heard, the analysis already points in that direction, with the 2021 Government report estimating that 7% of jobs could be affected in just five years and 18% in 10 years, with up to 30% of jobs over 20 years facing the possibility of automation. That is millions of people who may be displaced in the labour market if we do not get this right.

I will focus my comments on the impact on individual workers, because behind the rhetoric of making the UK an AI superpower, there are statements about having a pro-innovation, light-touch and coherent regulatory framework, with a desire not to legislate too early or to place undue burdens on business. That shows that the Government are, unfortunately, content to leave workers’ protections at the back of the queue. It is telling that in last month’s White Paper—a document spanning 91 pages—workplaces are mentioned just three times, and none of those references are about the potential negative consequences that we have touched on today. As we are debating this issue now, and as the Minister is engaged on the topic, we have the opportunity to get ahead of the curve, but I am afraid that the pace of change in the workplace has completely outstripped the pace of Government intervention over the last number of years.

It has been four years since we saw the Government’s good work plan, which contained many proposals that might help mitigate elements of AI’s use in the workplace. The Minister will not be surprised to hear me mention the employment Bill, which has been promised on many occasions and could have been an opportunity to consider some of these issues. We need an overarching, transformative legislative programme to deal with these matters, and the many other issues around low pay and chronic insecurity in the UK labour market—and we need a Labour Government to provide that.

With an absence of direction from Government, there is already a quiet revolution in the workplace being caused by AI. Workers across a broad range of sectors have been impacted by management techniques derived from the use of artificial intelligence. The role of manager is being diluted. Individual discretion, be it by the manager or worker, has in some instances been replaced by unaccountable algorithms. As we have heard, such practices carry risks.

Reports both in the media and by researchers have found that workplaces across a range of sectors are becoming increasingly monitored and automated, and decisions of that nature are becoming normalised. A report on algorithmic systems by the Institute for the Future of Work noted that that is ultimately redefining work in much narrower terms than can be quantified by any algorithm, with less room for the use of human judgment. Crucially, the institute found that workers were rarely involved in or even consulted about these types of data-driven technologies. The changes have completely altered those people’s experience of work, with greater surveillance and greater intensification, and use in disciplinary procedures. Members may be aware that there is now a greater use of different varieties of surveillance, including GPS, cameras, eye-tracking software, heat sensors and body-worn devices, so the activities of workers can be monitored to an extent that was hitherto unimaginable.

Of course, surveillance is not new, but the way it is now conducted reduces trust, and makes workers feel more insecure and as if they cannot dispute the evidence that the technology tells people. Most at risk of that monitoring, as the Institute for Public Policy Research has said, are those in jobs with lower worker autonomy, those with lower skills, and those without trade union representation. The latter is an area where the risk increases substantially, which tells us everything that we need to know about the importance of becoming a member of a trade union. The news today that the GMB is making progress in obtaining recognition at Amazon is to be welcomed in that respect.

Increased surveillance and monitoring is not only problematic in itself; it can lead to an intensification of work. Testimony from workers in one study stated that they are expected to be conducting work that the system can measure for 95% of the working day. Time spent talking to colleagues, using the bathroom or even taking a couple of minutes to make a cup of tea will not be registered as working, and will be logged for a manager to potentially take action against the individual. That pressure cannot be conducive to a healthy workplace in the long run. It feels almost like automated bullying, with someone monitoring their every move.

Many businesses now rely on AI-powered systems for fully automated or semi-automated decision making about task allocation, work scheduling, pay, progression and disciplinary proceedings. That presents many dangers, some of which we have talked about. Due to the complexities in the technology, AI systems can sometimes be a trusted black box by those who use them. The people using them assume that the outcome that emerges from the AI system is free of bias and discrimination, and constitutes evidence for the basis of their decisions, but how does someone contest a decision if they cannot question an algorithm?

As we have heard, there is potential for algorithmic bias. AI technology can operate only on the basis of the information put into it. Sometimes human value judgments form the basis of what is fed into the AI, and how the AI analyses it. As the hon. Member for Folkestone and Hythe mentioned, there are some famous examples, such as at Amazon, where AI was found to be systematically disconsidering women for particular job applications because of the way the algorithm worked. There is little transparency and a lack of checks and balances regarding how the technology can be used, so there is a palpable risk of AI-sanctioned discrimination running riot without transparency at the forefront.

I would like the Minister to commit to looking at how the technology works in the workplace at the moment, and to making an assessment of what it is being used for and its potential to discriminate against people with protected characteristics. The Data Protection and Digital Information (No. 2) Bill will create new rights where wholly automated decision making is involved, but the question is: how will someone know when a fully automated decision has been taken if they are not told about it? Is there not a risk that many employers will slot into the terms and conditions of employment a general consent to automated decision making, which will remove the need for the person to be notified all together?

A successful AI strategy for this country should not be built on the back of the poor treatment of workers, and it is the Government’s role to create a legal and regulatory environment that shields workers from the most pernicious elements of these new technologies. That cannot be fixed by introducing single policies that tinker at the edges; it requires a long overdue wholesale update to our country’s employment laws. As the Minister will know, our new deal for working people will set out a suite of policies that address that. Among other things, it will help to mitigate the worst effects of AI, and will introduce measures that include a right to switch off, which will guard against some of the egregious examples of AI being used to intensify people’s work.

As the organised representation of the workforce, trade unions should be central to the introduction of any new technologies into the workplace. Not only will that enable employers and their representatives to find agreeable solutions to the challenges raised by modern working practices, but it will encourage more transparency from employers as to how management surveillance and disciplinary procedures operate. Transparency has been picked up a few times and it is key to getting this right.

Artificial intelligence’s impact is already being felt up and down the country, but the Government have not been quick enough to act, and its worst excesses are already out there. The need for transparency and trust with technology is clear, and we need to make sure that that has some legislative backing. It is time for a Labour Government to clear that up, stand up for working people and bolster our labour market so that new technologies that are already with us can be used to make work better for everyone.

[The Parliamentary Under-Secretary of State for Business and Trade (Kevin Hollinrake)]

I am grateful to be called, Dame Maria, and it is a pleasure to speak in the debate. I congratulate the hon. Member for Birkenhead (Mick Whitley) on bringing this timely subject forward. I thought it would be appropriate to type his question into ChatGPT. I put in, “What is the potential impact of AI on the labour market?” It said, “AI has the potential to transform many aspects of the economy and society for the better. It also raises concerns about job displacement and the future of work.” That is it in a nutshell. It did not say that it was time for a Labour Government.

[Justin Madders]

Did the AI tell the Minister that the Conservative Government have got everything right?

[Kevin Hollinrake]

I have not actually posed that question, but perhaps I could later.

This is an important debate, and it is important that we look at the issue strategically. The Government and the Labour party probably have different approaches: the Labour party’s natural position on this kind of stuff is to regulate everything as much as possible, whereas we believe that free markets have had a tremendous effect on people’s lives right across the planet. Whether we look at education, tackling poverty or child mortality, many of the benefits in our society over the last 100 years have been delivered through the free market.

Our natural inclination is to support innovation but to be careful about its introduction and to look to mitigate any of its damaging effects, and that is what is set out in the national AI strategy. As we have seen, it has AI potential to become one of the most significant innovations in history—a technology like the steam engine, electricity or the internet. Indeed, my hon. Friend the Member for Folkestone and Hythe (Damian Collins) said exactly that: this is like a new industrial revolution, and I think it is a very exciting opportunity for the future. However, we also have key concerns, which have been highlighted by hon. Members today. Although the Government believe in the growth potential of these technologies, we also want to be clear that growth cannot come at the expense of the rights and protections of working people.

Only now, as the technology rapidly improves, are most of us beginning to understand the transformative potential of AI. However, the technology is already delivering fantastic social and economic benefits for real people. The UK’s tech sector is home to a third of Europe’s AI companies, and the UK AI sector is worth more than £15.6 billion. The UK is third in the world for AI investment, behind the US and China, and attracts twice as much venture capital investment as France and Germany combined. As impressive as they are, those statistics should be put into the context of the sector’s growth potential. Recent research predicts that the use of AI by UK businesses will more than double in the next 20 years, with more than 1.3 million UK businesses using AI by 2040.

The Government have been supporting the ethical adoption of AI technologies, with more than £2.5 billion of investment since 2015. We recently announced £100 million for the Foundation Models Taskforce to help build and adopt the next generation of safe AI, £110 million for our AI tech missions fund and £900 million to establish new supercomputer capabilities. These exascale computers were mentioned in the Budget by my right hon. Friend the Chancellor. These developments have incredible potential to bring forward new forms of clean energy, and indeed new materials that can deliver that clean energy, and to accelerate things such as medical treatment. There are exciting opportunities ahead.

If we want to become an AI superpower, it is crucial that we do all we can to create the right environment to harness the benefits of AI and remain at the forefront of technological developments. Our approach, laid out in the AI White Paper, is designed to be flexible. We are ensuring that we have a proportionate, pro-innovation regulatory regime for AI in the UK, which will build on the existing expertise of our world-leading sectoral regulators.

Our regulatory regime will function by articulating five key principles, which are absolutely key to this debate and tackle many of the points that have been made by hon. Members across the Chamber. Regulators should follow these five principles when regulating AI in their sectors: safety, security and robustness; transparency and explainability; fairness; accountability and governance; and contestability and redress. That feeds into the important points made by my hon. Friend the Member for Watford (Dean Russell), who held this ministerial position immediately prior to myself, about deception, scams and fraud. We can all see the potential for that, of course.

Clearly, right across the piece, we have regulators with responsibility in those five areas. Those regulators are there to regulate bona fide companies, which should do the right thing, although we have to make sure that they do. For instance, if somebody held a database with inappropriate data on it, the Information Commissioner’s Office could easily look at that, and it has significant financial penalties at its disposal, such as 4% of global turnover or a £17 million fine. My hon. Friend the Member for Watford made a plea for a Turing clause, which I am, of course, very happy to look at. I think he was referring to organisations that might not be bona fide, and might actually be looking to undertake nefarious activities in this area. I do not think we can regulate those people very effectively, because they are not going to comply with anybody’s regulations. The only way to deal with those people is to find them, catch them, prosecute them and lock them up.

Unpaid Work Trials

Justin Madders Excerpts

Wednesday 29th March 2023 Westminster Hall

[Justin Madders (Ellesmere Port and Neston) (Lab)]

It is a pleasure to see you in the Chair this afternoon, Mr Hollobone. I thank the hon. Member for Glasgow South (Stewart Malcolm McDonald) for securing the debate and for the work he has done over six years to try to deal with this wholly egregious situation.

We can probably start on a note of common concern, because every right-minded person would regard it as wrong that workers should be expected to work for free. In many cases, as we have heard, they actually end up out of pocket after working a trial shift. I firmly believe that we should all adhere to the principle that there should be a fair day’s pay for a fair day’s work, and any action to stop exploitation—whatever form it takes—should be welcome.

As we have heard, there clearly ought to be means by which an employer can test an individual’s suitability for a position, but—call me old-fashioned—I have always thought that that was what a job interview was for. If not that, what about a paid probationary period for someone to be assessed for their suitability? Let us not forget that people have to work somewhere continuously for two years before they get any protection against unfair dismissal, which could be seen as a very long trial period, albeit one that is paid. When we consider the many options available to employers to assess the suitability of potential employees in the round, we inevitably get drawn to the conclusion that, in the main, trial shifts are not necessary—certainly not unpaid ones. When we are confronted with the evidence that we have heard today and on previous occasions, the suspicion continues to grow that they are often used as a quick way to get free labour.

We have to ask what is being done to stop jobseekers being exploited. Although it is welcome that the Government have published guidance on the practice of unpaid trial shifts, it is not worth the paper it is written on without proper enforcement. There is a problem with both the wording of the guidance and the Government’s general attitude to upholding UK employment law. In particular, I have concerns about the fact that, as the guidance notes, there are no definitive rules or tests for whether a trial shift is legal.

As we know, there are six factors in the guidance that a court or tribunal will consider when making a judgment about whether a trial shift should be paid. I ask the Minister to consider how many people have the legal knowledge, patience, time or money to pursue an employer for a handful of hours of lost earnings at the tribunal, particularly if they are in a legally vulnerable position from having no employment protection at that point. Does the Minister agree that the threat of being taken to a tribunal for an unpaid trial shift is self-evidently a hollow threat to employers, and that the Department should be much more proactive in pursuing complaints on behalf of workers? Does he agree that, given that the majority of people in these sectors are young people, because of the nature of the work, and are unlikely to be members of a trade union, they need support in enforcing their rights?

Let me give an example from my own family of what is probably a pretty typical situation. My son has plenty of experience working in bars—quite often in Glasgow, actually. He has applied for various jobs in bars, including one at a bar in Chester. He had an interview. He has all the experience needed to work there, but was offered a trial shift despite the fact that he clearly could do the job. It transpired that the trial shift would run for eight hours and finish in the early hours of the morning, when there is no public transport, so he would have to pay for a taxi out of his own pocket to get home. That looked to me like blatant exploitation. Luckily for him, his father was the shadow employment rights Minister so he could be guided on what to do in that situation, but it begs the question: how many other times have they gotten away with that? How many hours each week are young people being asked to work trial shifts for which they get no payment? The Minister should be tasking his officials with trying to find out exactly how many times this happens each week, because we are probably seeing only the tip of the iceberg.

[Kevin Hollinrake]

What guidance did the hon. Member give his son in that situation? I would be interested to know.

[Justin Madders]

I am not sure Hansard can record in a polite way the suggestion that I conveyed to him. Let me put it this way: the employment relationship did not continue.

The six factors contained in the guidance are useful, but a lot of subjectivity is applied to them. For example, how is observation—which is one of the criteria—defined? How long is a reasonable period of observation? Ultimately, how can a jobseeker be expected to know if their employer has acted in line with the guidance, given how ambiguous it is? The ACAS website does not make any reference to trial shifts at all. People need a lot more support to understand when they are being asked to do something that is unlawful.

Ambiguities aside, the guidance needs to be properly enforced. As has been mentioned, we have this figure of £3 billion for unpaid work in various forms—it is probably is an even greater figure now. The continued reliance on an underfunded and overstretched tribunal system is failing our workers. Surely it is time for a single enforcement body to follow through for workers to ensure that their rights are enforced. I know the Government promised that along with an employment Bill, which we unsurprisingly have touched on. Will the Minister give us a timescale for when this single enforcement body will emerge?

The Government’s record on national minimum wage enforcement in recent times has been concerning. A naming and shaming list has not been published since December 2021, and I know the Minister has expressed his support for that as an important pillar of enforcement. As I have mentioned to him on previous occasions, a number of Departments have awarded lucrative contracts running into the hundreds of millions of pounds to companies that have appeared on the list of shame. What kind of message does it send to companies about the importance that the Government place on enforcement of the national minimum wage if they are then rewarded with Government contracts? I hope the Minister can give us an update on when the next list will be released.

In conclusion, the debate is a useful reminder that this is unfinished business. We can see very clearly how current ambiguities are being used to exploit workers. I want to hear from the Minister about what more can be done to ensure that people get paid for the work they do, and to ensure that these ruses, in all their forms, are put to an end, so that we get to a point in this country where a fair day’s work means a fair day’s pay.

Draft National Minimum Wage (Amendment) Regulations 2023

Justin Madders Excerpts

Monday 6th March 2023 General Committees

[Justin Madders (Ellesmere Port and Neston) (Lab)]

It is a pleasure to see you in the Chair this evening, Mr Hollobone.

I thank the Minister for setting out the regulations. Their purpose is to update the National Minimum Wage Regulations 2015 for the various age groups and categories of worker that the Minister set out, as well as to make adjustments for apprentices and the daily living accommodation offset rates. To be clear, we will not oppose the regulations; any rise in the minimum wage is a welcome step, particularly in the context of the spiralling inflation of the past year. I am sure that many workers are anticipating—indeed, counting on—the rises that we have heard about today.

The Minister said that this is the most generous increase in cash terms that we have seen. Obviously, that has to be looked at in the context of an inflation rate at a 40-year high. Last year, I raised concerns that the increases then were not calibrated to the cost of living, which had sharply increased in the weeks before the relevant regulations were announced, so it is welcome that the Low Pay Commission was able to factor in the high inflation on this occasion.

However, I am concerned that only the rate for 21 and 22-year-olds has been increased at a level comparable to inflation, with the 10.9% increase. The other wage categories have increased by 9.7%, which is actually 0.4% below the 12-month inflation figures released by the Office for National Statistics in January. We know that the cost of living for many people is significantly higher than that. Food, fuel and housing costs have increased at steeper rates. Food inflation is at about 17.6% and, according to a House of Commons Library report published two weeks ago, domestic gas and electricity prices have risen by 129% and 67% respectively.

On top of all that, private rents have reached a record high, including through a 16.1% rise in London rents in the last 12 months. On average, monthly mortgage payments have increased by £500 because of the Budget last autumn. The cost for people of sustaining the basics of everyday life, be it food in their stomach, a roof over their head or keeping warm, has skyrocketed. We agree that the regulations will take some steps to address the situation, but there is still quite a gap.

The Minister referred to the intention to have the national living wage reach two thirds of median earnings by 2024; in the current economic climate, does he still consider that aim to be achievable? He said that the target is subject to the prevailing economic conditions; does he consider the outlook over the next 12 months to be conducive, or otherwise, to meeting that target?

It is disappointing that the Government have once again not addressed the inequities of the minimum wage age limits. People’s age should not determine the price of goods and services, and it certainly should not determine their income. The decision to retain the different age rates is even more unfair given the cost of the basics that I have outlined, particularly the cost of energy, food and fuel. It should be noted that the number of young people on zero-hours contracts has risen again, with the proportion of 16 to 24-year-olds on zero hours contracts now at the highest level since 2013, and with a 4% increase in the last year of people in that age group looking for additional work. It seems that the younger generation is once again bearing the brunt of the current inequities in the workplace.

The Opposition value equally the contribution of people in work. It does not seem fair that two people who perform the same role should be paid differently because one is 24 and the other is 21. It is not fair that the year of someone’s birth will determine the rate of a wage increase or, as we have seen in respect of inflation, a real-terms cut in pay. Only 21 and 22-year-olds will see their pay rise at a rate equivalent to inflation; those on the national living wage aged between 18 and 20, and 16 and 17, as well as those on apprentice rates, will see a smaller increase. I understand that the purpose of giving 21 and 22-year-olds a higher rate of increase is to smooth their transition to the national living wage, but it means that is the only group to see a real-terms pay increase this year.

[Andy McDonald]

I wonder whether my hon. Friend can help me. Does he find it as inequitable as I do that there is prejudice against young people in the workplace? They do not go into supermarkets and find that goods are priced at a lower level because of their age, so how on earth can it possibly be justified that they should receive a lower rate of pay for the work that they do opposite somebody 10 years their senior?

[Justin Madders]

That is exactly the point: the expenses faced by people who live independently are the same regardless of their age. That is why the current differences are indefensible.

On the differences in the increase, will the Minister say a few words about why the accommodation offset is going up by only 4.6% this year? That is considerably below the other rates. I understand that there is a review going on in that respect.

The impact assessment states that the tight labour market has caused nominal wages to increase, particularly among the lowest paid. It says that many businesses consulted by the Low Pay Commission said that better wages are used to attract and retain their workforce. Alongside good working conditions, we believe that is central to good employment practice. However, I have heard from representatives of certain sectors that some do not treat the minimum wage with the importance that others do. When we met in Committee to discuss the relevant regulations last year, it was noted that non-compliance was greatest in the hospitality and care sectors. Will the Minister tell us what steps have been taken to deal with non-compliance in those sectors?

There is a particular concern that domiciliary care workers are not being paid for the time spent travelling between locations, thus causing their wages to fall below the minimum wage levels. I hear—a recent Unison survey confirmed this—that about 73% of care workers are not paid for their travel, and Unison estimates that that affects between 155,000 and 220,000 workers. The impact assessment is correct that some sectors use high wages to entice workers, but it is clear that some in the care sector are not doing that. The abuse of travel time means that the minimum wage is not being paid to hundreds of thousands of people.

I understand that, because of the fragmented work patterns, carers’ pay calculations are highly complex, and hundreds of time fragments per day are to be accounted for. That means it can be very difficult for people to ascertain whether they are being paid the minimum wage. Of course, it is possible under section 10 of the National Minimum Wage Act 1998 to get the pay records and inspect them, but I am told that those requests are frequently ignored, and information is often provided in a form that is difficult to decipher. Even pay experts sometimes find it hard to understand what pay is being received.

Employers are obliged to keep sufficient records, but there is a grey area in respect of what the standard constitutes in reality and, of course, the guidance can be ignored. No employer in the care sector has been prosecuted for poor record keeping, despite the high number of compliance failures and the clear evidence produced in the survey. Will the Minister talk to his officials about what more can be done to address the widespread abuses in the care sector, which deserve closer examination?

We should not forget that the minimum wage does not cover everyone. It does not cover the self-employed, many of whom do not receive the minimum wage. What is being done to address that? What is done to address the issue of people who are in bogus self-employment who do not get the minimum wage but, because the people who hired them are gaming the system, have no ability to challenge their pay and do not appear in any statistics? What steps are being taken to help those who are exploited because they are engaged on an internship that stretches out for months without pay? What about those who have to do a trial shift and work for eight, 10 or 12 hours, only to be told at the end that they are not required and will not get paid? Those are all abuses of the minimum wage and I want to hear from the Minister what is being done to tackle them.

Enforcement is key. If we are to have confidence that the regulations will benefit all our constituents, we need to be confident that they will be properly enforced. This year is the 25th anniversary of the Labour party having established the principle that workers are entitled to a minimum wage in law. It is important that the Government ensure confidence in the system by bringing to task unscrupulous bosses who exploit their workers. The law is positive only if it is enforced. The past 25 years have made a lot more employers consider the law when they pay their workers, but they have not ended the existence of unscrupulous bosses altogether.

One of the most crucial elements of the legislation is the need to tackle businesses that flout minimum wage regulations. The Minister understands the importance of enforcement because on 23 February he told me in a written answer to one of my questions that the naming and shaming of employers who fail to pay the minimum wage is an “important part” of enforcement and compliance. He is right about that, because companies should expect to be found out and called out when they underpay their staff, but given it is such an important part of the Government’s strategy, why has not a list of shame been released since the previous time the relevant regulations were debated? Given that the lists are supposed to be published on a quarterly basis, a hiatus of a year and a quarter since the last one, with no explanation, is concerning, so I hope the Minister will address that point when he responds.

The delays in publication have serious implications. The December 2021 round of naming included only investigations that had concluded back in 2018, and some of those had looked into breaches that went back almost a decade. We now have no publicly accessible register of firms found to be underpaying staff since before the covid pandemic. We all know that the labour market has changed drastically in that time, so it really is important that we get on to round 19 as soon as possible.

Leadership and setting an example are important. Naming and shaming is one thing; modest fines are another. If transgressors are allowed to continue to procure lucrative contracts from Government Departments, it could be said that the consequences of their actions are light. When handing out work to the private sector, the Government have billions of pounds at their disposal to distribute. Whether such reliance on the private sector is a healthy or wise option for the Government is a matter for another debate, but at the very least I would hope that those found not to be paying the minimum wage are at the back of the queue when it comes to handing out Government contracts, if not removed from the queue altogether.

It seems the Department for Business and Trade does not even bother to ask itself the question when contracting with the private sector. In response to a recent written question on whether the Department has issued any contracts in the last three years to companies that had appeared on the list of shame, the Minister told me that he

“does not hold information about the number of named employers who have a contract with a Government Department.”

He cannot stand up today and categorically tell us whether his Department has or has not contracted work with a company found to be illegally underpaying its workforce. How can the Department responsible for ensuring that businesses in this country comply with minimum wage requirements be unable to confirm something so basic and so important? Is compliance not a question worth asking of those who receive taxpayers’ money to undertake Government contracts?

There are concerns about other Departments that have sought to engage with companies that have appeared on the list of shame. I will not go through them all now, but it is important that the Department responsible for enforcing the minimum wage should look closely at whether the people it engages are paying it.

[Andy McDonald]

My hon. Friend makes an important point that speaks to the lack of commitment from the Government, given their previously expressed view to create a single enforcement body that could have embraced the enforcement of the national minimum wage. Is he as disappointed as I am that we still do not have any clarity from the Government on whether that single enforcement body will be formed?

[Justin Madders]

My hon. Friend is absolutely right about the questions in respect of the level of commitment. When I was preparing for today’s debate I looked back at previous discussions, and the Minister has always talked about the single enforcement body. We have not heard any of that from the Minister today. Perhaps he will confirm that it is still the Government’s intention to introduce a single enforcement body. They will have to table legislation to do that, so we might yet be disappointed. Will the Minister confirm, in the light of the answers we have received, that he will undertake a full investigation and ensure that in future those who do not pay the minimum wage face further scrutiny before they are given Government contracts?

As I hope to have demonstrated today, legal minimum levels of pay are not the whole solution to low pay, but they are an important part of it. Trade unions, as the collective voice of workers, also play a vital role in securing better working conditions. I hope that one day we have a Labour Government who will help all our constituents to receive the pay and conditions that they deserve.

--- Later in debate ---

[Kevin Hollinrake]

I thank hon. Members for their valuable contributions during today’s debate. As has been pointed out, these rises are more important than ever in the context of the continued high inflation and cost of living pressures. I am glad to see cross-party agreement—largely—on the issue.

A number of points were raised, principally by the shadow Minister, the hon. Member for Ellesmere Port and Neston. When the Low Pay Commission made the recommendation of 9.7%, which we fully accepted, inflation was at 8.9%, so the rise was greater in most cases than inflation at the time. As the hon Member for Ellesmere Port and Neston knows, this Government are committed to halving inflation by the end of the year, so lots of people who received those high pay increases, in percentage terms, will benefit even more as a result of reduced inflation and a growing economy. Creating more jobs is very important and eventually leads to high wages, as my hon. Friend the Member for Basildon and Billericay pointed out.

[Justin Madders]

I am grateful to the Minister for explaining that the Low Pay Commission recommended an above-inflation pay rate. We often hear from Ministers that one reason that they cannot accede to pay demands from various public sector unions is that anything approaching the inflation rate would boost inflation even higher. Does that not apply in this situation?

[Kevin Hollinrake]

No, because this applies to a much smaller cohort. If the hon. Gentleman is proposing that we pay everyone across the public sector an inflation pay increase, which I guess he is from his comment, he has to explain to the taxpayer how we will raise that £28 billion a year, because that is what it would cost. Obviously, the Low Pay Commission works with employer groups, but it also works with business groups, other stakeholders and other employers to try to strike a balance between what is affordable for employers and what is an appropriate rise for those at the bottom of the income scales.

The hon. Gentleman asked about our ambition to get to two thirds of the median salary by 2024. That is certainly what we believe to be attainable, and it remains our target. With the growing economy that we expect to see by the end of the year, the economic context will be a lot brighter than it has been over the last few months.

On age limits, the hon. Gentleman is right; our ambition is to lower the age limit in terms of access to the national living wage, as we did from 25 to 23 in 2021, based on the Low Pay Commission’s recommendation. We are hoping to lower it to 21 by 2024. Part of the reason that it is lower—other Members asked the same question—is that there is no doubt that there is a greater vulnerability for young people. Unemployment levels tend to be higher in these lower age groups and it is important that we do not price people of low age out of the market. That is probably why Labour had different rates for 18 to 21-year-olds when it introduced some of these provisions when it was in government.

Let me turn to zero-hours contracts. Only 3% of the population is on a zero-hours contract. Sixty-four per cent. of those people do not want more hours, so the contracts kind of work for both sides, but we recognise that there is an issue with exploitation in some situations and we are trying to create the conditions for a conversation between employers and employees while not putting too great a burden on employers. That is why we are legislating for a right to request predictable hours. We have already legislated for things such as exclusivity clauses, which are not allowed for zero-hours contracts. For those below the lower-earnings limit, there cannot be an exclusivity clause in a zero-hours contract.

On compliance, the hon. Gentleman was absolutely right. It is very important to us, which is why we have doubled enforcement since 2015. I have met His Majesty’s Revenue and Customs team to discuss that. I welcome the fact that they have put £100 million back in the pockets of lower-income workers since 2015 through their excellent work. The care sector is one of the sectors they look at all the time, and there was no differential between it and any other sector. As far as employment law is concerned, travel time to appointments should be covered within employment law when it comes to calculating the national minimum wage or national living wage.

We believe that internships should be paid positions and should be subject to the national minimum wage or national living wage, and that trial shifts should be no more than a few hours.