HC Deb 22 March 2001 vol 365 cc475-7
8. Shona McIsaac (Cleethorpes)

If he will make a statement on the impact of the minimum wage in Cleethorpes. [153638]

The Minister for Competitiveness (Mr. Alan Johnson)

At least 120,000 workers in Yorkshire and Humberside have benefited as a result of the introduction of the national minimum wage in April 1999. The national minimum wage has also helped to close the gap between the highest and lowest earners, and to reduce the differential between men's and women's pay, both in Cleethorpes and throughout the United Kingdom. Between April 2000 and February 2001, Inland Revenue enforcement officers visited 348 employers in the Inland Revenue's northern region, which includes Cleethorpes, and identified about £240,000 in underpayments for workers in that region.

Shona McIsaac

I represent a part of the world in which low pay, such as £1 an hour piecework rates, was rife. The national minimum wage, and the increase in it that will be made later this year, has given a real boost to eliminating poverty pay in Grimsby and Cleethorpes. My hon. Friend mentioned cases of employers who do not meet their obligations. That is probably the tip of the iceberg in some parts of the country. What rights do workers have to report employers who may not be paying the national minimum wage, or who may alter their terms and conditions of employment to get round the requirement to pay the minimum wage?

Mr. Johnson

My hon. Friend raises an important point. The second report of the Low Pay Commission last year examined enforcement, and its authors were pleased, by and large, with the way it was operating. We have 14 teams of Inland Revenue officers around the country, dedicated to national minimum wage issues. Thanks to the Employment Relations Act 1999, they have access to returns for tax, national insurance and working families tax credit. The Low Pay Commission will re-examine the subject, and its conclusions will be included in volume 2 of its third report, which will be published in May.

If workers are scared of their employers, and scared to enforce their rights, they have only to ring the helpline. The rest will be done for them; they need have no further involvement. Enforcement officers will ensure that the employer complies—and so far, the enforcement officers have recovered £4 million in wages for people who had been denied their rights under the National Minimum Wage Act 1998.

Mr. Edward Leigh (Gainsborough)

I was in a nursing home recently—[Interruption.] I was only visiting. The nursing home was in my constituency, but only a couple of miles from the constituency of the hon. Member for Cleethorpes (Shona McIsaac), and the people there said that the minimum wage had had a severe impact on their business. Although we all want people to receive decent wages, is the Minister conducting a survey of areas of traditionally high unemployment and low wages, such as Humberside and north Lincolnshire? The area contains his own constituency, and he knows it well. The issue is serious, and I am sure that the Minister would not want to increase unemployment in the area. What impact studies is he conducting, especially into the TUC's demands for a minimum wage as high as £4.50 or even £5 an hour?

Mr. Johnson

The Low Pay Commission is an example of social partnership in action, and may not be too popular among Conservative Members. It was established to carry out the type of analysis that the hon. Gentleman has described.

The sector mentioned by the hon. Member for Gainsborough (Mr. Leigh) has been a cause of concern in respect of the effect of the national minimum wage. What—for want of a better term—one could call social care employees have had a major input to the commission's deliberations. Indeed, the commission's second report found that 14 per cent. of establishments in the sector had experienced lower staff turnover since the introduction of the national minimum wage, that 18 per cent. reported higher staff motivation, and that 44 per cent. had increased investment in training and development.

The matter is important. This Government introduced the national minimum wage, and the level at which it is set obviously has to take cognisance of the points raised by the hon. Gentleman. That is why it is important that the process should be careful and steady, and that it be overseen by the Low Pay Commission. Anyone who reads the commission's reports will see that it conducts a thorough analysis of points such as the hon. Gentleman raised.

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