Oral Answers to Questions

Debate between Margot James and Chris Stephens

Thursday 6th September 2018 Commons Chamber

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

4. What plans he has to regulate the processing of personal data by online technology companies.

[The Minister for Digital and the Creative Industries (Margot James)]

The Government take the protection of individuals’ data very seriously, which is why we introduced the new legislation, the Data Protection Act 2018 incorporating GDPR—the general data protection regulation—which updates our data protection framework, placing obligations on organisations, including online technology companies, to process people’s data lawfully, fairly and transparently.

[Chris Stephens]

A Select Committee report recently gave a withering account of the use of data and ads in our elections, with specific concerns about Facebook being unwilling to investigate claims that its platform was abused by the Russian Government. So can the Minister confirm that the Select Committee recommendations will be implemented in full in order to protect our democratic process?

[Margot James]

The hon. Gentleman raises serious issues of which I am aware. The Government will respond to the Select Committee report very shortly, and I can assure him that the Electoral Commission, the Information Commissioner’s Office and the Government will be looking very robustly at the evidence the Select Committee has provided.

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[Margot James]

As I said earlier, the Government are working hard to get a deal, because, no, we do not think that exiting from the EU without a deal would be to the benefit of the creative sector or, indeed, any other sector.

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

T1. If he will make a statement on his departmental responsibilities.

Blacklisting

Debate between Margot James and Chris Stephens

Tuesday 5th September 2017 Westminster Hall

[Margot James]

I thank the hon. Gentleman for his intervention. I can reassure him. If people in his borough have any evidence, the best thing they can do at the moment is to take it to the Information Commissioner, who will investigate it. In fact, the Information Commissioner does not need particular examples even. If they are seeing allegations made against a particular employer or within a sector, they will commit to investigating the issues that his constituents have raised.

[Chris Stephens]

The hon. Member for Ipswich (Sandy Martin), who made the previous intervention, mentioned procurement. Will the Minister tell us what steps the Government are taking on procurement to ensure that companies that blacklist workers do not get public sector contracts?

[Margot James]

I will write to the hon. Gentleman on that matter. We expect high standards of corporate governance for major contracts awarded by the Government. If there is evidence of companies acting in the present day in not only a disreputable but a potentially illegal manner, that will be taken into consideration.

Taylor Review: Working Practices

Debate between Margot James and Chris Stephens

Tuesday 11th July 2017 Commons Chamber

[Margot James]

I wholeheartedly agree with my hon. Friend. Productivity is central to our industrial strategy. We have established a £23 billion fund to promote quality jobs, better skills and the higher pay that is, as he says, so important.

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

I refer to my entry in the Register of Members’ Financial Interests and my trade union activity over the 20 years before my election.

Today’s response to the Taylor review from the Government tells us everything we need to know about their frailty and approach to workers’ rights—a weak set of proposals that probably will not be implemented and a set of talking points that leaves the balance of power with employers and big business. It was interesting that neither the Prime Minister nor the Minister mentioned or commended the role of the trade unions in securing fair rights at work. Does the Minister agree that a “right to request” is different from a fundamental right enshrined in law? If a request is refused, what enforcement action will the Government take to force employers to do better?

Does the Minister accept that the report makes no distinction between a flexible workforce and the exploitation of that workforce? Does she also agree that while the Taylor report tries to propose new rights, some of those rights have been secured by trade unions taking employers to court, as the shadow Minister suggested? Can the Minister tell us what action the Government will take to enforce minimum wage payments when 200,000 workers in the UK are not paid the minimum wage? Will the Government advertise rights at work services, such as the Equality and Human Rights Commission, and does the Minister agree that it is time for a fair rights at work Act to guarantee fundamental rights at work?

[Margot James]

I thank the hon. Gentleman for his critique. The “right to request” has been useful and valuable when it comes to requesting flexible employment. In any case, it is a recommendation that Matthew made, but it certainly warrants careful consideration. The hon. Gentleman mentions enforcement, and we are committed to making sure that workers on zero-hours contracts or the minimum wage get paid what they are legally entitled to be paid. That is why we have doubled the resources available to HMRC in the last two years to ensure enforcement of those important laws.

Construction Industry: Blacklisting

Debate between Margot James and Chris Stephens

Wednesday 8th February 2017 Westminster Hall

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Margot James)]

It is a pleasure to serve under your chairmanship, Sir Alan. I congratulate the hon. Member for Streatham (Mr Umunna) on securing this debate and on speaking with such knowledge and passion about this terrible blight—this terrible indictment of companies in the construction sector, particularly during the 1990s.

I share the hon. Gentleman’s view that the blacklisting of trade union members and activists is an indefensible practice. What I have heard today really horrified me. However, I think we have an appropriate legislative framework for dealing with any further attempts at blacklisting, which is why we are not in favour of a public inquiry at the moment. Such an inquiry would perhaps have had an effect 20 years ago, and I regret very much that one was not held then.

The Information Commissioner intends to undertake a call for evidence later this year to develop her understanding of the underlying issues, building on her office’s observations from its extensive investigations into blacklisting complaints. In an area where there have been many allegations, that is an important step forward in establishing a true picture of the level of blacklisting that may or may not take place now.

Following the 2009 investigation of the Consulting Association—a case that Members are all too familiar with, thanks to the hon. Gentleman—the Government strengthened the legal protections in this area. The Employment Relations Act 1999 (Blacklists) Regulations 2010, which the hon. Gentleman referred to, make it unlawful for an individual or organisation to compile, sell, use or supply a blacklist of trade union members or those who have taken part in trade union activities. Individuals can enforce the rights contained in the regulations through employment tribunals or the county court, as the hon. Gentleman said.

I am not aware of any evidence that the blacklists regulations are not doing their job, but should any new information come to light to suggest otherwise, we will certainly consider it.

[Chris Stephens]

In July 2016, the Minister told me in a written answer that the Information Commissioner was investigating some allegations of blacklisting. She committed to consider any further action that might need to be taken as a result. Will she give me an update, please?

[Margot James]

There is no further update. The Information Commissioner’s Office is undertaking such inquiries and when it reports to me I will consider the contents of what has been found.

The Information Commissioner’s Office is an independent regulatory body that was set up to investigate breaches of the Data Protection Act 1998. It has the power to take enforcement action, including searching premises and issuing enforcement notices and fines. Since April 2010, it has also had the power to issue a civil monetary penalty of up to £500,000 for serious breaches of the Act. That is a significant deterrent and a vast improvement on the previous rules, which allowed a maximum penalty of only £5,000. Data protection law is undergoing reform as a result of the general data protection regulation, which is to take effect on 25 May 2018. The powers of the Information Commissioner’s Office to impose fines will substantially increase as a result.

In 2009, the Information Commissioner’s Office established a fast-track helpline for those who thought that they might have been affected by the Consulting Association case. I congratulate the trade unions mentioned by the hon. Member for Ashfield (Gloria De Piero), which campaigned for and won compensation, and the Blacklist Support Group, members of whom are in the Public Gallery today, on their work on this matter.

When the Information Commissioner’s Office considered that a person might appear on the Consulting Association list, they were asked to provide further documentation. It has continued to run that service and to respond to written requests for information. To date, the helpline has received and responded to about 5,700 calls and 3,000 written requests. The nature of blacklisting is that it is secretive and discriminatory, however, and it can be difficult for individuals to know whether they have been affected by the practice. If people suspect that they have been blacklisted, they can report their concerns to the Information Commissioner’s Office, which will provide advice on how an individual may choose to take the matter further. The Information Commissioner has also attempted proactively to contact individuals who might have been affected, although that is only possible where up-to-date contact details are available.

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[Margot James]

We are now in a position where compensation and redress are available, and there is an absolute law against anything similar happening again. For the time being, we are not considering a public inquiry because action was taken back in 2010, as I mentioned. The Information Commissioner has also now announced a call for evidence. Pending the outcome of that, we will consider the framework and whether it is still appropriate. For now, no public inquiry is under consideration, but we will see what happens after the Information Commissioner’s call for evidence and its subsequent report.

I encourage anyone who thinks that they might have been blacklisted by the awful Consulting Association and who has not already done so to get in touch with the Information Commissioner’s Office through its helpline. Furthermore, the Trade Union and Labour Relations (Consolidation) Act 1992 prohibits an employer from refusing employment because someone is a union member, so that is illegal. Individuals who believe that they have been discriminated against can, as I said, bring a claim at an employment tribunal. Dismissal for such a reason would automatically be unfair.

I understand the desire for the blacklists regulations to be applied retrospectively, but in 2010 the Government decided that that was not appropriate. The compensation package is available, blacklisting is now against the law and the Government’s response to the consultation was clear about a new, specific criminal sanction not being proportionate. The Government will ensure that any allegations of blacklisting are investigated by the appropriate authorities.

[Chris Stephens]

Will the Minister say something about potential changes to procurement, as was asked for by the hon. Member for Streatham (Mr Umunna)? Are the Government minded to look at the procurement rules in that regard?

[Margot James]

We already have procurement rules that allow the Government not to enter into a contract with a company found guilty of a criminal offence or found wanting in ethical standards. It may well be that blacklisting can be shoehorned into that. Certainly, any company guilty of a criminal offence would not be considered for a public contract under the public contracting guidelines.

I think that I have answered the other points, so if there are no further interventions, I will sit down.

Question put and agreed to.

Draft Important Public Services (Health) Regulations 2017 Draft Important Public Services (Border Security) Regulations 2017 Draft Important Public Services (Fire) Regulations 2017

Debate between Margot James and Chris Stephens

Wednesday 1st February 2017 General Committees

[Margot James]

I can confirm that Ministers in what was the Department for Business, Innovation and Skills did have discussions with their counterparts in the Scottish Government.

As I was saying, strike action in important public services in the health, border security and fire sectors can have a significant impact on the public. That is why we have introduced a 40% approval threshold, which is to apply to important public services such as health, border security and fire, in addition to the requirement for a 50% turnout threshold.

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

Have the Government considered that part of the role of public sector workers—because of their role profiles and job descriptions—may be covered under the regulations, whereas some aspects of their work may not be? If so, how do the Government seek to address that with the trade unions?

[Margot James]

This is not a blanket coverage of every worker and every job description in the public service categories that we are debating. The regulations pertain to listed job descriptions within those important sectors. They do not encompass every single worker; they encompass workers whose work has a direct impact on the public in those sectors. If the hon. Gentleman wants a more specific answer on exact job categories, I can provide that, but not at this juncture.

During the passage of the Trade Union Bill last year, the Government consulted on the services within the public service categories set out in the legislation that should be subject to the 40% threshold and on how the threshold should operate in practice. We analysed more than 200 responses, reviewed the available evidence on the impact of strike action across different public services and listened to stakeholders’ views. The Government response to the consultation was published in January last year, when we also published the draft regulations. The substance of those draft regulations was discussed in Parliament during the passage of the Trade Union Bill. The regulations limit the application of the threshold to those services in the health, border security and fire sectors where there is the most compelling evidence of the impact of strike action. The regulations will ensure that the scope of strike action is proportionate.

What does that mean for the sectors affected? The pressing social need that we are addressing in the health sector is the risk to life or injury to the public in the event of industrial action. We have therefore focused the impact of the threshold where reduced service levels can have the most immediate impact on the lives and safety of patients and the public. That is why the regulations cover emergency and urgent health services. That includes—this goes some way to responding to the hon. Member for Glasgow South West’s question— ambulance staff, accident and emergency medical staff in hospitals, services that are provided in high-dependency units and intensive care in hospitals, and psychiatric, obstetric and midwifery services provided in hospitals for conditions that require immediate attention to prevent serious injury, illness or loss of life.

In the fire sector, our aim again is to protect the public against the risk to life or injury. In the light of that, we have focused on firefighting services, including co-ordination of the emergency response, because those services are critical to ensuring that fires are dealt with promptly and effectively to protect the public.

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[Margot James]

I thank hon. Members for their contributions. Positive industrial relations are the backbone of a productive economy, and the Government believe that trade unions can play a constructive role in maintaining such relations. The Government are equally clear that modernising reforms were required to ensure that strikes only happen as a result of a clear, positive decision. The regulations implement the provisions of the Trade Union Act in relation to the 40% threshold alone. A number of specific points have been raised, which I will go through as quickly as I can. First, the shadow Minister mentioned e-balloting. That review, under the chairmanship of Sir Ken Knight, should be published by December this year. I trust that the hon. Lady, bearing in mind that these provisions will not be implemented until 1 March, will not think that that is too long. In answer to the right hon. Member for East Ham, the last strike to take place in Border Force was in October 2014.

The advice that the Government have is that the provisions are not inconsistent with our international obligations under the European convention on human rights and the International Labour Organisation. That is because they do not undermine the right to strike, but merely redress the balance of rights between people taking industrial action and the public who depend on those vital services.

The hon. Member for Glasgow South West raised the issue of a grey area in some sectors where jobs are covered by these provisions. The alternative would be to take a more blanket approach, automatically including all workers in each of these three sectors, irrespective of the impact of their work on the public, to which Opposition Members would probably object even more. The Government have consulted on the distinctions between different groups of workers in this context and have provided guidance, which I trust unions and employers will find useful.

I cited in my opening remarks a strike that would have been averted had this legislation been in place—the strike by health unions in 2014. If the right hon. Member for East Ham wants another example, I draw his attention to a strike by the NUT in 2014 that led to the closure of 3,000 schools. That strike cost children their education and disrupted the lives of many parents on a turnout of just 27%, with the support of just 22% of those eligible to vote. I have explained that the purpose of the 40% ballot threshold is to rebalance the ability of union members in the three sectors under discussion to strike with the interests of the general public, non-striking workers and employers.

The pressing social needs we want to address in these regulations are to ensure the maintenance of public safety and security and the protection of life. Strike action in important public services in the health, border security and fire sectors can have a significant impact on those social needs. The regulations support the Government’s commitment to delivering a modernised industrial relations framework, better to support an effective and collaborative approach to resolving industrial disputes. I believe they are fair and appropriate, and I commend them to the Committee.

[Chris Stephens]

rose—

Draft Important Public Services (Education) Regulations 2017 Draft Important Public Services (Transport) Regulations 2017

Debate between Margot James and Chris Stephens

Tuesday 31st January 2017 General Committees

[Margot James]

I will come back to that point, if the hon. Gentleman permits.

The Act received Royal Assent in May 2016. Today we are debating two statutory instruments that implement a 40% threshold for ballot mandate approval for important public services in the education and transport sectors. As well as the requirement that 50% of union members who are eligible to vote do so, 40% of all eligible members will have to agree with the proposed mandate. We propose that the 40% threshold for the two sectors comes into force on 1 March.

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

The Minister will know that during the passage of the Trade Union Bill, there was some debate on other aspects of balloting, such as electronic balloting. What is the Government’s direction of travel on e-balloting and secure workplace balloting?

[Margot James]

I can certainly deal with the issue of e-balloting. The Government committed to undertake a review of the potential for e-balloting in advance of strike action. A review has been established under the chairmanship of Sir Ken Knight and it will report by the end of the year.

We propose that the 40% threshold comes into force on 1 March. At the same time we will bring into force a number of other provisions in the 2016 Act, including a 50% turnout threshold for those who are eligible to vote, as I mentioned; additional information to be provided about the result of any ballot; two weeks’ notice of industrial action to be given to employers; new requirements to manage picketing and new reporting requirements. That ensures that the key changes to the way official industrial action is decided on and implemented are prioritised and come into effect as a package.

The purpose of the ballot thresholds is to rebalance the ability of union members to strike with the interests of the general public, non-striking workers and employers. The 2016 Act takes proportionate action to redress the balance and ensure that unions in the education and transport sectors have a strong democratic mandate before they take strike action. The impact of strike action is most severe when it takes place in the important public services that people and businesses rely on every day, particularly when people are left with no real alternatives. That is particularly unfair when strike action goes ahead with no evidence of strong support from a unionised workforce. That is why we have introduced a 40% approval threshold to apply to important public services such as education and transport, in addition to the requirement for a 50% turnout overall.

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[Margot James]

The hon. Lady makes a very good point. The legislation does not purport to condemn all strike action as anathema. It is merely about a requirement to better balance the interests of the travelling public with the rights of people, including her father, to take strike action. There is no concerted effort by the Government to undermine a person’s or a union’s right to take strike action; we are merely requiring that right to be tempered by a strong democratic mandate.

Our aim is to rebalance the ability of union members to strike with the interests of the general public, non-striking workers and employers. In introducing thresholds, we have taken proportionate action that does not ban strikes, but simply redresses the balance by ensuring that unions have a democratic mandate before they take strike action. International bodies have persistently been asked to consider whether UK legislation is compliant, but the UK courts, the European Court of Human Rights and the governing body of the ILO have accepted that UK legislation strikes the right balance between the rights of union members and the legitimate interests of others affected by their actions. That is precisely what the Trade Union Act and the regulations continue to do.

We have taken account of the guidelines on essential services that some of the ILO’s supervisory committees have referred to in respect of services where it may be legitimate to limit or prohibit strike action, but our objective is not the same and that is why we have deliberately used a different term. As I have explained, we want to protect the public from the immediate and adverse consequences of strike action taken with the support of a minority of union members. We are not stopping strikes that have a reasonable democratic level of support, such as those the hon. Lady just mentioned.

[Chris Stephens]

Why are the Government seeking to rush ahead with these statutory instruments today, rather than wait until the outcome of the e-balloting review? I say that specifically because of the Government’s assurances to the House of Lords and hon. Members of this place during the passage of the Bill.

[Margot James]

The report of the e-balloting review is not far off and the matter is separate from the requirement to secure a proper democratic mandate for strikes in these important public services.

In relation to the regulations, the Secondary Legislation Scrutiny Committee pointed out that the Government had committed to issue guidance to clarify which workers will be captured by each of the important public services listed, in order to assist unions and employers when they are assessing how a ballot should be conducted. The Committee’s view was that the need for such guidance raises the question whether the regulations are sufficiently clear and understandable for those affected. Furthermore, the Committee expressed regret that the Government had failed to publish that guidance in early December when laying the draft regulations in Parliament.

I am grateful for the Committee’s scrutiny. I can confirm that the Government have now published guidance to provide advice for unions on applying the 40% threshold in practice, with examples of workers who will be covered by each of the regulations. In drafting the guidance, we engaged with key stakeholders affected by the provisions to understand how the guidance can be most helpful. We listened carefully to their views and have reflected those in the guidance.

In conclusion, the Government believe that the regulations are proportionate and strike the correct balance between the interests of unions and those of members of the public.

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[Margot James]

I will not give way, because I am merely responding to the hon. Lady’s—

[Chris Stephens]

On a point of order, Mr Evans. For the record, I was on strike in 2011 to protect my occupational pension, which was being attacked by the Government.

[The Chair]

That was a point of information, not a point of order.

Draft Trade Union Act 2016 (Political Funds) (Transition Period) Regulations 2017

Debate between Margot James and Chris Stephens

Wednesday 25th January 2017 General Committees

[Margot James]

We conducted a consultation and took it seriously. We listened to people’s views and arrived at a judgment. I remind the hon. Gentleman and other hon. Members that this is not news to the trade unions concerned. It passed into law last May, following intensive debate on the Floor of the House and a great deal of publicity. In effect, the unions have had more than 12 months to introduce the necessary changes to their systems.

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

I, too, declare my membership of Unison and refer to the Register of Members’ Financial Interests and my post as chair of the Public and Commercial Services Union parliamentary group. Why was 1 March 2018 chosen as the specific date, when we know from trade union feedback that that will cause considerable problems? Trade unions discuss rule changes at their conferences, but many of them are held biannually.

[Margot James]

If trade unions hold conferences biannually, they will surely have at least one conference opportunity between now and March 2018. As the hon. Gentleman probably knows, under the Trade Union and Labour Relations (Consolidation) Act 1992, it is not necessary for unions to amend their rules in this regard at a conference. They can apply to the certification officer for the acceptance of any form of union ballot on such a change of rules. Although many unions would prefer to give effect to the changes at a conference, there is no obligation on them to hold a conference to achieve that.

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[Margot James]

I have not finished responding to the hon. Lady. She correctly referred to a reliance on rules to provide proper accountability to members, and we respect that. However, the hon. Member for Glasgow South West said in an earlier intervention that many unions hold biannual conferences. There is therefore an opportunity between now and March 2018 for the vast majority of those unions with political funds to agree the rule changes at a conference. As I have said, if they cannot meet at a conference to introduce the new rules, they can at least ballot their members in consultation with a certification officer.

I am sorry that the hon. Member for Wallasey is frustrated and disappointed by my response, but I think that it is reasonable. The Government believe that a 12-month transition period is adequate for unions to ensure that they comply with the statutory requirement under the Trade Union Act. That balances the need to provide unions with sufficient time to implement the changes with the Government’s view that the measures are delivered promptly.

Once the regulations have received parliamentary approval, they will come into force on 1 March 2017 and the formal 12-month transition period will run from that date. The Government’s view is that unions have known about these changes for some time and it is not unreasonable to expect them to have already done some planning to meet the requirement. We are also grateful to the certification officer, who has consulted unions and issued model rules and guidance, which should assist them in complying with the new requirements.

[Chris Stephens]

I am grateful to the Minister for giving way again. It is important to note that the certification officer has indicated that there will be a period of at least five weeks for him to sign off the changes to a trade union’s rule book. Does the Minister agree that that means that, in effect, trade unions have only 11 months?

[Margot James]

The hon. Gentleman quibbles about weeks and months. We are approaching the end of January and the measure will not come into force until 1 March, from which point the unions will have 12 months in which to comply.

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[Margot James]

I will not give way for a little while. I want to go back to our purpose, and remind Opposition Members that when we concluded the Act’s Public Bill Committee sittings, the shadow spokesperson, the hon. Member for Cardiff West (Kevin Brennan), said on the record:

“we recognise that the Government’s new proposal”—

that is, that only new members should be required to opt into the political funds—

“is a substantial improvement ?on the original Bill, which would have required all members to opt in within three months and to renew that opt-in within five years.”––[Official Report, Trade Union Public Bill Committee, 27 April 2016; c. 1510.]

Hon. Members are making a great deal of something that really ought to be happening already, and is a modest advance.

[Chris Stephens]

I thank the Minister for giving way; she has been most generous. As the right hon. Member for West Dorset pointed out, there is a real problem with the date given in the statutory instrument—1 March 2018. Is the Minister indicating that she is amenable to moving that date by a couple of months, as the right hon. Gentleman suggested?

[Margot James]

I am not going to proceed down that path at this point. As required by the Act, we have consulted and sought views on the length of the transition period.

Draft National Minimum Wage (Amendment) (No. 2) Regulations 2016

Debate between Margot James and Chris Stephens

Thursday 8th September 2016 General Committees

[Margot James]

I thank the hon. Lady for her intervention. I propose meeting Marks and Spencer to discuss a range of matters, including some of the points that she makes. It is important to remember that, by law, as long as companies pay the national minimum wage and, in future, pay those over 25 the national living wage, there will be a limit to what the Government can do, apart from expressing a keen concern that employers should operate within the spirit, as well as the letter, of the law.

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

There is a real issue with enforcement. The National Audit Office said that, last year, 209,000 workers in the UK were not being paid the national minimum wage and that 56,000 were owed arrears. Will the Minister outline the Government’s plans to enforce the national minimum wage better throughout the UK?

[Margot James]

We are doing a great deal to improve enforcement. Sadly, there will always be cases of employers who have the very immoral intent of getting round this law, but the powers of investigation of Her Majesty’s Revenue and Customs are increasing, and we are increasing the expenditure on HMRC’s enforcement team. I will come on to make other points about enforcement; there are various other things that we are doing to increase it. Every single complaint made by an employee is automatically investigated by HMRC’s enforcement team. This year, we have increased the budget from between £13 million and £14 million to £20 million. We are serious about cracking down on employers that try to flout the law. I shall return to enforcement in due course, because I agree with the hon. Gentleman that it is crucial.

The Low Pay Commission has proved that a rising minimum wage can go hand in hand with rising employment. However, the carefully considered independent advice from the commission is central to this. The Government’s 2016 remit for the commission asked it to make recommendations for the new rates, based on maximising the wages of the low-paid without damaging their employment opportunities. The commission has made its recommendations following thorough consultation with business, workers, and their representatives, and extensive research and analysis.

The Low Pay Commission’s remit is clear: when considering the pace of increases to minimum wage rates, it should take into account the state of the economy. The commission has stated:

“the labour market had continued to perform well, with robust employment growth in low-paying sectors”.

Although the referendum result may have cast some uncertainty over forecasts and assessments made before June this year, we should remember that the labour market performed robustly during the worst recession in living memory.

The increases to the minimum wage rates are, of course, in addition to the national living wage for those aged over 25, which we implemented in April. It is the Government’s ambition for a national living wage to reach 60% of median earnings by 2020. In addition, the national minimum wage cycle will be aligned with the national living wage cycle from April 2017. That will reduce the burden on businesses of having to update their workforce’s pay more than once a year and will mean that the statutory pay floor for all ages is uprated simultaneously.

[Margot James]

I thank my hon. Friend for his informative intervention. The fact that it is more or less dollar for pound indicates that we in Britain are doing as much as we possibly can to protect the interests of low-paid workers, and to pay them the maximum that the economy can afford without damaging their employment prospects.

[Chris Stephens]

Since the Government announced their version of a living wage for those over 25, there has been no explanation of why the age of 25 was chosen. Will the Minister outline why that age was set for a living wage, rather than 21?

[Margot James]

The wages of young adults between the ages of 21 and 25 are protected by the minimum wage regulations, which will continue to apply. It is felt that prior to the age of 25, people in employment are gaining experience, and that the most important thing for them is to be in work and looking at their prospects in the workplace. I am sure that is felt by the Low Pay Commission, which advises the Government on such matters, while having a remit of having regard to the state of the economy as a whole and a mission to not damage people’s employment prospects. Those factors informed the Government’s decision to pick the age of 25 for the national living wage.

I point out to the hon. Gentleman that a lot of employers—particularly in the retail sector, for which I am responsible—are finding the prospect of a national living wage a huge challenge. If we lowered the age or dramatically increased the rate, there would be a grave danger to young people’s employment prospects, which it is the Government’s duty absolutely to protect.

If I may make some progress, I will come on to the issue of enforcement, which I know is of interest to the hon. Gentleman. We are absolutely clear that anyone entitled to the national minimum wage or the national living wage should receive it. The enforcement of the minimum wage is essential to its success, and we are committed to cracking down on employers who break minimum wage law in all sectors across the economy. That is why we have increased HMRC’s enforcement budget, as I was saying earlier, to £20 million from £13 million last year. This will bolster HMRC’s resources and ensure that it continues to respond to every worker complaint.

The Government will continue to take a tough approach to employers that break minimum wage law, and will continue to name eligible employers in the vast majority of cases. From April this year, the Government have also significantly increased the national minimum wage penalty, taking it from 100% to 200% of the arrears owed to the worker, up to a maximum of £20,000 per worker. HMRC will continue to refer the most serious cases of wilful non-compliance for criminal investigation.

In conclusion, the Government believe that the rate set out in the regulations will increase the wages of the lowest-paid while being affordable for business.

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[Margot James]

I thank hon. Members for the interesting points they have made. I will take the issues turn by turn, starting with the valid points raised by the hon. Member for Sefton Central about the national living wage. He quoted the other organisation for a real living wage, whose deliberations I follow. However, the Government follow the recommendations of the Low Pay Commission, rather than those of the other organisation. The Low Pay Commission is independent of the Government and, as I said, it makes its recommendations on the basis of what the economy can afford without damage to the employment prospects of young people.

I also mentioned the increase represented by the national living wage, which will rise over the next few years, as we all know. We on this side of the House think that is a very good thing. A lot of employers, particularly in the retail sector, are seriously concerned about their future viability with this new cost; for example, we have already identified that people in the social care sector, which several hon. Members mentioned, are very concerned. The Government are right to follow the recommendations of the Low Pay Commission, for those good reasons.

[Chris Stephens]

Will the Minister give way?

[Margot James]

I am going to make some progress, but if I do not cover the point the hon. Gentleman wants to make, he can intervene later.

I will say a little about enforcement, which was mentioned by the hon. Member for Llanelli; I very much agree with where she is coming from, and I thank her for her comments. As I said earlier, the Government are absolutely committed to cracking down on employers who break the national minimum wage law. I mentioned the budget increase for HMRC’s enforcement team; we have also increased the minimum wage underpayment penalties from 100% to 200% of the arrears owing to workers.

Employers who have underpaid their workers by more than £100 are eligible to be named. We name the vast majority of those employers: 700 have been named to date. I will make sure that that operation continues and is put on an expected footing of quarterly naming and shaming. I assure hon. Members that naming impacts on firms’ reputations, especially locally, because the local media always pick these stories up. It is a serious deterrent.

We are also creating a statutory director of labour market enforcement—I hope to have the individual in place by the end of the year—who will establish a single set of priorities for all enforcement bodies, and will back up the work of the HMRC enforcement team. The increased budget for HMRC will enable it not just to continue to investigate every single employee complaint, but to carry out more targeted inspections that do not depend on employee complaints.

I recognise that some employees, particularly in small firms, are worried about their future employment security if they make a complaint. There is the facility to make confidential complaints—people can complain directly to HMRC or they can call the free helpline that ACAS operates—but there is still that worry and fear at the back of people’s minds. I had someone come to my constituency surgery about it; they were so worried, and I took the matter up on their behalf. To ensure that that worry is not a barrier to enforcement, HMRC will carry out targeted inspections across various sectors of the economy.

That point leads me on to the care sector, which several hon. Members mentioned and which is a priority for the Government. HMRC is already undertaking targeted inspections: so far, it has made inquiries into almost 500 social care companies operating in the sector. It is worth pointing out that many of those inquiries result from targeted inspections; they are not dependent on employees making complaints. We have also enabled local authorities to charge a precept of up to 2.5% on council tax to provide considerably more funding for the social care sector, because we are concerned by what we have heard from companies operating in that space.

Hon. Members mentioned prosecutions—an issue that causes me concern. So far, HMRC has brought just 12 successful criminal prosecutions. I think we would all agree that that is a small number, but there is a good reason why HMRC prefers the civil remedy. It is far quicker; it is also cheaper, and we must have an eye on cost. Each criminal prosecution costs, on average, £50,000, and some cost considerably more. We need to make sure that criminal prosecution is in the armamentarium of HMRC, for the serious repeat offenders and employers who go out of their way to break the law. They should be the subject of criminal prosecution, but there is much more we can do, and hon. Members should not forget that when a civil remedy is pursued, the employees get their arrears immediately, whereas with a criminal prosecution they have to wait—and, of course, if it is not successful, they receive nothing.

I think I have dealt with most of the matters that the hon. Member for Sefton Central raised, including the Low Pay Commission. On the point about the disparity between people aged under 25 and those aged over 25, I listened attentively to the hon. Member for Llanelli, who obviously has expertise on the issue, and I accept that there is a difficulty in terms of strict equality between someone aged 18 and someone aged 37. I do not accept that they necessarily have the same costs, but there is an issue.

Let us not forget that the figure is a floor—a minimum. A lot of good employers who can afford it pay younger and older workers equally, and I think we would all like that to happen; but we must accept that the position of younger people in the labour market is different, and among the differences is the fact that sometimes they are training, or they need experience. I have already pointed out the significant difference in the unemployment rate.

I do not think that the provisions are a licence for exploitation. I think it is a realistic acknowledgement of the different position of different age groups, and the need to incentivise employers to employ younger people who do not have experience. Employers must have some kind of benefit from doing that. If they are in highly competitive and low-paid sectors that are under threat, such as the retail sector, which as I have mentioned is under severe threat for all sorts of reasons, they need that cushion, and that is what the Low Pay Commission recommends.

[Chris Stephens]

Some of those companies in the retail sector are multinationals making millions of pounds of profits. Is the Minister also looking at some of the companies that are changing contracts and taking away other premium payments to enforce the living wage? In debates in the House, evidence has been given of companies taking away other payments and changing hours and shifts to try to get round the living wage. Is the Minister looking at that issue?