Wages Inspectors (Hansard, 13 November 1990)

§ 3. Mr. Tony Banks
To ask the Secretary of State for Employment how many wages inspectors are now in post; and how many were in post in 1979.

§ Mr. Forth
In 1979 there were 158 wages inspectors. The greatly simplified wages orders resulting from the Wages Act 1986 allowed the then complement of 120 inspectors to be adjusted to the present total of 71. There are currently 70 inspectors in post.

§ Mr. Banks
May I say how much I agree with your strictures about barracking, Mr. Speaker? It is disgraceful, just like the figures given by the Minister. It is no surprise that so many employers break the law in view of the small number of inspectors. Why are the Government so soft and selective on law breaking? Apparently it is okay for Rupert Murdoch to break the law, seemingly with the connivance of the Prime Minister, and it was all right in 1989 for 5,528 employers to underpay workers in wages council sectors. Why are the Government soft on those law breakers? Is it because robbing the workers is no crime in the Tory book?

§ Mr. Forth
The hon. Gentleman, perhaps uncharacteristically, displays an appalling lack of knowledge as to how the system works. The truth is that 96 to 97 per cent. of workers are paid the statutory minimum or above, so the non-compliance rate is low. The crucial factor is that not only do inspectors target employers and premises to ensure that they home in on those that they suspect may be in breach of the regulations, but when they find them, they use methods of persuasion and information—[HON. MEMBERS: "Ah!"]. The hon. Gentleman may have a blood lust for prosecutions——

§ Mr. Banks
Yes.

§ Mr. Forth
We are much more concerned with the employees' interests and to try to ensure that the employer will continue in business and pay the wages required by the 435 regulations. That is a far more fruitful way of approaching the issue than that which the hon. Gentleman seems to favour.

§ Mr. Favell
As 57 wages inspectors to inspect the wages of more than 20 million people must be but a drop in the bucket, would not it be a good idea to clear away the whole system and save the taxpayer some money?

§ Mr. Forth
I know that my hon. Friend is trying to be helpful, but I will quote from my right hon. and learned Friend the then Secretary of State for Employment, who said earlier this year: I have decided not to proceed with the abolition of the councils for the present. he went on to say, and this may be of some consolation to my hon. Friend—— I therefore intend to keep its operation under close review."—[Official Report, 6 March 1990; Vol. 168, c. 541.] That is as far as I can go at present to satisfy my hon. Friend.

§ Mr. Tony Lloyd
Has not the Minister just let the cat out of the bag? Is not the reason why we do not have a prosecution policy for underpayment and why there are so few inspections of premises and wages inspectors the fact that the Government intend to let the wages council system wither on the vine? The Minister accuses my hon. Friend the Member for Newham, North-West (Mr. Banks) of being wrong, but the Minister is being outright misleading, because the reality is that 30 per cent. of firms visited were found to be underpaying their employees in one form or another. Is it not about time that the party of law and order made the law work in everyone's interests? When low pay in this country is a growing problem, as it is, Ministers have a responsibility to do something practical, get the inspectors in and get the prosecutions coming.

§ Mr. Forth
The hon. Gentleman obviously formulated his supplementary question before I gave my earlier answer, as he is apparently unaware of what I said to his hon. Friend the Member for Newham, North-West (Mr. Banks). I shall therefore repeat it. The inspectors target their visits on those whom they suspect may not be paying the minima, which is why the non-compliance rate among those targeted is the higher figure that he mentioned, but the overall rate is as I stated earlier. The total non-compliance rate among employers is small. We and the inspectors believe that using persuasion and information is a much better way of dealing with the problem than blundering in with fines and penalties on small businesses which could be put out of business. There is no point in putting people out of business and destroying jobs in an effort to apply minimum wage levels.

§ Mr. John Marshall
Does my hon. Friend agree that minimum wage legislation can only create unemployment among those receiving low wages, who are among the most vulnerable in our society? Is he therefore surprised by the Opposition's enthusiasm to introduce such legislation?

§ Mr. Forth
Indeed, it is worse than my hon. Friend suggests. The truth is that if there were a statutory minimum wage of 50 per cent. of average pay, which I understand may be the policy of the Labour party, my Department estimates that 750,000 jobs could disappear as 436 a result. If the Opposition want to be responsible for the destruction of 750,000 jobs that must be on their heads —it certainly will not be on ours.