National Minimum Wage: Sports Direct

John Bercow Excerpts

Monday 14th December 2015 Commons Chamber

[Mr Chuka Umunna (Streatham) (Lab)]

(Urgent Question): To ask the relevant Minister if he will make a statement on Sports Direct plc and its compliance with the national minimum wage legislation.

[Mr Speaker]

I call the relevant Minister, Mr Nicholas Edward Coleridge Boles.

[The Minister for Skills (Nick Boles)]

Thank you, Mr Speaker.

I share the hon. Gentleman’s concern that working people are paid the full amount that the law requires for every hour that they work, and I welcome his urgent question. We take the enforcement of minimum wage laws very seriously. That is why we have increased the enforcement budget from £8.1 million in 2010 to £13.2 million in 2015-16. While I am not able to comment on enforcement action in relation to individual employers, I can assure the House that Her Majesty’s Revenue and Customs follows up every complaint it receives in relation to breaches of the national minimum wage. I encourage any employer or worker who is concerned that these laws are not being complied with in their workplace to contact HMRC or ACAS, through its confidential hotline. HMRC undertakes targeted enforcement activity in the most high-risk sectors of the economy.

As the Prime Minister announced in September, the Government are taking a number of further steps to crack down on employers who are not paying workers the minimum wage. We have already increased the penalty for breaches of minimum wage legislation to 100% of arrears, up to £20,000 per worker, and from April 2016 the Government will double the maximum penalty from 100% to 200% of arrears so that employers comply with the law and working people receive the money they are due. Furthermore, a new team of compliance officers will be established within HMRC to investigate the most serious cases of employers not paying the relevant minimum wage. The team will have the power to use all available sanctions, including penalties and criminal investigation. We will also continue to name and shame employers who do not pay their workers what they are entitled to.

As a Government, our message to employers is straightforward. We will work to reduce burdens on business by cutting regulation and corporation tax. In return, we expect employers to pay working people at least a decent legal minimum—the national minimum wage and, from next April, the national living wage for workers aged 25 and over. I can assure the House that we will not hesitate to crack down hard on employers, large and small, who break this social contract by failing to pay the wage that the law requires.

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[Several hon. Members rose—]

[Mr Speaker]

Order. I am glad that the Minister graciously welcomed the urgent question. Unfortunately, the Treasury wrote to me this morning to say that the matter was not urgent and should not be aired. Upon examination, I concluded that it was and should. We look very much forward to the exchanges.

Mr Peter Lilley was standing, but the right hon. Gentleman has thought better of it. Never mind—fair enough. I call Mr Marcus Fysh.

[Marcus Fysh (Yeovil) (Con)]

My constituents have approached me with concerns about Sports Direct on several occasions since the election. It appears that Sports Direct can sometimes make somewhat aggressive use of and have a somewhat aggressive attitude towards flexible working. Flexible working can suit some people, but does not always suit others. When it comes to such employment laws, has my hon. Friend given any thought to a general anti-avoidance rule, such as the one we are considering in the tax sphere?

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[Hannah Bardell (Livingston) (SNP)]

rose—

[Mr Speaker]

We will come to Mr Skinner, who is the constituency Member, but I call Hannah Bardell.

[Hannah Bardell]

The allegations against Sports Direct are extremely concerning, and we echo the calls of Unite the union for an HMRC investigation into the reported breaches of the national minimum wage legislation at the Shirebrook warehouse. We stand in unity with the employees, because such practices do nothing to engage them and make them feel positive about the place in which they work.

Allegations of such a serious nature must be taken very seriously by the UK Government, and they must do much more to support the accreditation of living wage employers. The Scottish Government have led the way in encouraging more than 400 living wage employers in Scotland. We have the second highest proportion of employees paid the living wage—80.5%—across the countries and regions of the UK.

Scottish National party Members want the Government to commit wholeheartedly to supporting an HMRC investigation into these business practices. What lessons can be learned from this case, especially when the UK Government are gearing up to implement the new minimum wage premium, which is not a living wage? If they cannot enforce the current minimum wage, how on earth will they manage to enforce such increases?

[Robert Jenrick (Newark) (Con)]

I echo the Minister’s comments on the ACAS hotline. I called the hotline with a constituent who came to my surgery believing that he had been paid below the minimum wage. I found ACAS extremely professional during that phone call and would recommend the service to any hon. Member who had a case in their constituency.

May I question the Minister on the upcoming change to the minimum wage, with the introduction of the living wage? I read that in a recent Department for Business, Innovation and Skills survey of 1,000 employers, nine out of 10 employers strongly welcomed the introduction of the living wage and said that it would boost productivity and the morale of their employees. However, it was concerning that four out of 10 employers said that they had not communicated with their staff regarding the upcoming potential rises in pay, and that eight out of 10 still had not updated their payroll or created new procedures to implement the living wage. Will the Minister comment on that, so we can be sure that legitimate businesses are ready and do not get into a similar situation?

[Mr Speaker]

I was going to recommend that the hon. Gentleman conducted an Adjournment debate on the subject until I realised that he had just done so.

[Nick Boles]

I thank my hon. Friend for pointing out, from direct experience, how good the ACAS hotline is. On the national living wage, which is coming in next April, a substantial Government communication campaign will start in the new year. We feel that it is in the months leading up to its introduction that communication will be most effective in making sure that employees and employers know that it is coming in, know what is required and begin to work out how to implement it in their systems.

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[Nick Boles]

The hon. Lady always comes to this House knowing the complete answer to every question, but it might help her sometimes if she would actually listen to the list of measures we have introduced that go significantly further than any enforcement activity the Government she supported ever brought forward to defend their minimum wage. When the set of enforcement measures is working as well as it currently is, I see no reason to take any instruction, however helpfully phrased, from the hon. Lady.

[Mr Speaker]

This is an extremely important matter but we have other important business to follow, so I am looking for pithy questions and answers.

[David Mowat (Warrington South) (Con)]

On the facts, the case in The Guardian is disturbing. Does the Minister agree that one good piece of news is that, whatever else happens, in April next year Sports Direct will have to pay these people 11% more than they are getting now?

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[Nick Boles]

In my experience the hon. Lady is often on to things before the rest of us, so I would be delighted to meet her.

[Mr Speaker]

What a perceptive fellow the Minister is. We are most grateful to him, and I thank him for engaging with the urgent question so comprehensively.