Lord Beecham

The Cabinet Office's interim guidance on applying the new clause in government grant agreements can be found online at:
https://www.gov.uk/government/publications/interim-guidance-on-applying-a-new-clause-in-government-grant-agreements

Grant agreements are routinely subject to conditions, as well as a monitoring/audit process. The new grant clause builds on those existing processes

The new clause has successfully been trialled by the Department for Communities and Local Government over the last 12 months.

The announcement on 6 February was on a new clause for all government grant agreements. This new clause makes clear that grant recipients must not use the grant funding for political campaigning and lobbying unless it is expressly authorised in the grant agreement.

Charities remain free to lobby the government, subject to charity law restrictions. They simply cannot use government grant funding to do so.

The Government welcomed the Committee's consideration of ethical procurement issues in its report "Ethical standards for public services".

In our response of June 2015 we accepted a large number of the Committee's recommendations, including championing high ethical standards in our relationships with strategic suppliers and implementing ethical awareness.

Information on the number and cost of special advisers for 2009 and subsequent years is available in the Libraries of the House. Information for 2015 will be published shortly.

Over £14million has been invested over the last two financial years to support activities aimed at increasing the completeness and accuracy of the register, including in the run up to the General Election. In addition, Electoral Registration Officers have been provided with grant funding in the current financial year of £20million. The Electoral Commission is due to publish its latest analysis of the electoral register later this month, including the impact of activity to promote registration before the election, and it is important to consider any further steps in light of this report.

The Government is clear that aggressive tax avoidance is totally unacceptable. That is why we are closing loopholes, bringing in a General Anti-Abuse Rule, and investing additional funding to help HMRC promote tax compliance.

The Government’s policy to promote tax compliance through public procurement is another tool that means government departments can exercise their power to exclude firms bidding for government contracts solely on the basis that they have been non-compliant in meeting their legal tax obligations.

This issue will remain under constant review by HM Government.

As stated in the Government publication ‘Managing Public Money’, which is available in the libraries of the House, during the evaluation stage of sourcing, it is important for public sector procuring organisations to establish the propriety of candidate suppliers.

Her Majesty’s Government has taken robust action to tackle tax avoidance during this parliament, including through investing in HMRC compliance activities, identifying and closing loopholes, and making strategic reforms to the UK tax system, such as the UK’s first General Anti-abuse Rule.

Since 2010 we have imposed tough central expenditure controls on ICT, as well as on consulting, recruitment, marketing and property, to reduce wasteful expenditure and help reduce the fiscal deficit:

https://www.gov.uk/government/publications/cabinet-office-controls

To further reduce wasteful expenditure, we have implemented a review process for all forthcoming departmental investments on IT with requested spend above £5m.

Expenditure on external legal advice is a matter for individual departments. As part of the Government's transparency programme, contracts above the value of £10,000 are available on Contracts Finder at: (https://www.gov.uk/contracts-finder). Departmental spending over £25,000 is published in departmental Annual Reports on (https://www.gov.uk/government/publications).

HM Revenue and Customs maintains data on arrears recovered in all cases – and actively pursues recovery through the civil courts where this is not paid. Due to the way this data is maintained, the requested figures could only be provided at disproportionate cost.

The criteria for prosecuting National Minimum Wage offences are outlined in the Government’s minimum wage enforcement policy document, which can be found here:

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/539577/bis-16-373-enforcement-policy-document-national-minimum-wage.pdf.

Costs incurred in the issuing of warning letters and penalty notices are minimal because they are part of the administrative process delivered by the Employment Tribunal penalties team in the Department of Business, Energy and Industrial Strategy.

Of the 168 warning letters issued, 29 recipients have responded by making payments bringing the total previously unpaid awards recovered by the Department to just under £99,500.

60 penalty notices have been issued and one recipient has complied by paying the outstanding amount of £750 and a penalty of £187.50 which, under the arrangements of the regime, goes to the Government.

HM Courts & Tribunals Service issue booklet T426 to claimants, which accompanies every employment tribunal judgment, about the enforcement routes available to them to pursue unpaid compensation awards. The information can be found on page 6 of the attached booklet.

The option for claimants is to inform the Department for Business, Energy and Industrial Strategy’s Employment Tribunal penalties team of non-payment of their award, 42 days after the employment tribunal award was made to allow for appeal. For Acas conciliated settlements, the claimant can submit a complaint if payment has not been received by the date agreed as part of the settlement. The team will advise claimants on next steps to take to recover the unpaid awards.

Since April 2016, the Department for Business, Energy and Industrial Strategy has issued 60 penalty notices as a result of 164 warning notices to employers for failure to comply with orders of employment tribunals to pay compensation to applicants.

As a result of the Employment Tribunal Penalty regime the department has secured over £83,000 in previously unpaid awards for applicants.

The Government has named 687 employers for failing to pay at least the appropriate minimum wage rate to their workers, since the inception of our naming scheme in October 2013. Civil proceedings were initiated against all 687 of these employers, resulting in almost £1.4 million of penalties being levied. In addition, over £3.5 million of underpayments were identified, which the employers are required to repay to workers. Public naming represents the final element of the civil enforcement process. No criminal prosecutions were initiated against these employers.

The Government’s priority is to ensure low paid workers receive the money they are owed, as quickly as possible. Civil proceedings are generally the most effective means of achieving this. However, where there is evidence that an offence has been committed the case will be considered for criminal investigation, which may lead to prosecution.

Since April 2016, the Department for Business, Energy and Industrial Strategy has issued 60 penalty notices to employers for failure to comply with orders of employment tribunals to pay compensation to applicants.

As a result of the Employment Tribunal Penalty regime the department has secured £83,245.52 in previously unpaid awards for applicants.

Should the penalty notices not be paid, the department will take further enforcement action as necessary to pursue payment.

I refer the noble Lord to the statement I made to the House on this matter on 31 October 2016, Official Report, Volume 776.

Since April 2016, the Department for Business, Energy and Industrial Strategy has issued 37 penalty notices to employers for failure to comply with orders of employment tribunals to pay compensation to applicants.

Should the penalty notices not be paid, the department will take further enforcement action as necessary and to the full extent of the law to pursue payment.

The Department for Business, Energy and Industrial Strategy has introduced robust Employment Tribunal enforcement processes, which can ultimately lead to a referral to a debt collection agency. A new process implemented in April 2016 allows for a penalty to be issued. The penalty is calculated as 50% of the value of the tribunal award up to a maximum of £5,000.

The National Minimum Wage naming and shaming scheme represents the end point of civil sanctions against employers who fail to pay at least the appropriate rate of minimum wage to their workers. Where there is evidence that an offence has been committed the case will always be considered for criminal investigation which may in turn result in prosecutions. But criminal investigations are reserved for the most serious cases of non-compliance.

Our number one priority is getting workers the money they are owed and the civil route is more successful in achieving this. Criminal investigations by HM Revenue & Customs and prosecutions by the Crown Prosecution Service will not necessarily result in arrears of wages being paid back to the workers. This would require further civil prosecutions following the Courts’ ruling.

Under the civil route, employers are not only faced with reputational consequences, but also face a financial penalty for breaking the law.

The National Living Wage will come into force on 1 April 2016. We estimate that a full-time National Minimum Wage worker will earn over £4,400 more by 2020 from the National Living Wage in cash terms.

This Government is committed to improving living standards, particularly for the low paid. Guided by a proportion of median earnings which leading experts recommend, the National Living Wage recognizes the balance needed of an affordable rate for businesses with achieving a significant increase in minimum pay.

The Low Pay Commission will continue to make recommendations on the appropriate rate for the National Living Wage going forward, to make sure that wages rise to reward workers while considering the impact on the economy.