National Minimum Wage Naming Scheme

Debate between Kelly Tolhurst and Rebecca Long Bailey

Tuesday 4th June 2019 Commons Chamber

[Kelly Tolhurst]

I thank my hon. Friend for outlining that piece of work. It is right that naming and shaming rogue employers is a key part of our enforcement. We have doubled the budget since 2015 for enforcement of the national minimum wage, and one of the key things that I am particularly interested in is making sure that we go after those individual employers or big organisations that are deliberately trying not to pay workers the minimum wage.

[Rebecca Long Bailey (Salford and Eccles) (Lab)]

I thank my hon. Friend the Member for Barnsley East (Stephanie Peacock) for securing this important urgent question. One of the proudest achievements of the last Labour Government was the introduction of the national minimum wage, safeguarding workers from exploitative pay practices. Sadly, from the Trade Union Act 2016 to their failure to address exploitation through zero-hours contracts or bogus self-employment, this Conservative Government cannot be proud of their record on workers’ rights. The admission today that the naming and shaming scheme has been effectively shelved only adds to that woeful record.

The national minimum wage is effective only if it is adequately enforced. The Government have stated that the naming and shaming element of minimum wage enforcement is vital, alongside other measures such as fines. Has the Minister made any assessment of the impact of the scheme’s suspension on minimum wage avoidance in the last year? Has the Department continued to identify those employers underpaying during that period, and what action has been taken?

The Minister will also be aware that the director of labour market enforcement also criticised the Government not so long ago in respect of their utilisation of the enforcement mechanisms available to them. The director also asked about additional resource, so it would be helpful if the Minister could identify what funding has been made available to enhance enforcement capacity at Her Majesty’s Revenue and Customs.

Not only is enforcement of the minimum wage important, but the level at which it is set is crucial. I know the Chancellor of the Exchequer thinks that poverty is a figment of our imagination, but the fact is that in 2017 more than 1.5 million people had less than £10 a day to live on, according to the Joseph Rowntree Foundation. Labour is committed to ending the scourge of low pay. We will introduce a real living wage of £10 an hour and end the unfairness of lower rates for those under 18. Will the Minister take this opportunity to improve her Government’s record on poverty and workers’ rights and commit to doing the same?

[Kelly Tolhurst]

The hon. Lady says that the Government have nothing to be proud of, but I am absolutely proud to serve in a Government who have put so much focus on enforcing the national minimum wage. As I have already mentioned, this year we increased the national minimum wage by the biggest amount in 20 years, up 4.9%.

It is simply not true to say that we have shelved the naming and shaming scheme. It is absolutely right for me, as the Minister responsible, to evaluate the scheme and make sure that any naming and shaming scheme is meaningful, adds value, acts as a tool to aid employers to make sure that they are able to comply with the national minimum wage legislation, and enables us effectively to communicate exactly what the breaches are and why, and the detriment to the individual worker. We remain absolutely determined to stamp out low pay.

We currently have larger numbers of people in work than ever before, and it is absolutely right that those individuals should get the hourly rates to which they are entitled. As I said in my opening remarks, we doubled the enforcement budget to £27.4 million in 2019-20. That was up from £13.2 million in 2015-16. We are committed to continuing that enforcement. I will not make excuses for reviewing the naming and shaming scheme, because we want to add value and make it more effective, and we want to make sure that we aid employers, help workers to understand their rights and offer routes to recourse.