HL Deb 20 April 1999 vol 599 cc1021-2

3.1 p m.

Lord Newby asked Her Majesty's Government:

What action they are taking to ensure that companies pay their workers the national minimum wage.

Lord McIntosh of Haringey

My Lords, the national minimum wage is 20 days young. It has the support of the vast majority of employers; a success story despite some reports of evasory tactics. It would be nothing short of astonishing if no attempts at evasion were reported. The Inland Revenue will deal with non-compliance by acting on complaints received and carrying out targeted visits to areas where underpayment is suspected.

Lord Newby

My Lords, I am grateful to the noble Lord for that Answer. Will the Government give us an assurance that the Inland Revenue minimum wage enforcement unit has adequate resources to deal, in a timely fashion, with the increasing number of complaints that it is likely to receive over the coming months?

Lord McIntosh of Haringey

My Lords, of course we shall ensure that the resources are available. I am not sure that I agree with the noble Lord that we can expect an increasing number of complaints. This is the time when complaints might be expected. Of the 25,000 calls to the helpline—1,500 a day—since the minimum wage was introduced, only about 200 have been specific complaints.

Lord Clark of Kempston

My Lords, can the Minister say whether the Government are fully convinced that there will be no increase in unemployment because of the introduction of the national minimum wage? If the Government are so confident, on what evidence are they so confident?

Lord McIntosh of Haringey

Yes, my Lords, we are still convinced, as we were at the beginning, on the basis of the very detailed inquiry made by the Low Pay Commission. Of course, evidence post hoc will be available only when the new earnings survey and the labour force survey start to produce results for the period after 1st April, which is three to six months away.

Earl Russell

My Lords, will the Minister agree that employers who fail to pay the minimum wage risk free-loading on the budget of the Department of Social Security? Therefore, will the Government attempt to use data-matching with social security records to detect those employers who fail to pay the minimum wage?

Lord McIntosh of Haringey

My Lords, employers who fail to pay the minimum wage not only encroach on the social security budget, but also break the law. That is our first position. Issues of transfer of data between the Inland Revenue and social security, as the noble Earl well knows, are extremely complicated.

Baroness Castle of Blackburn

Is the Minister aware that when I introduced the Equal Pay Act, which was passed in 1970. I was dogged by the same dire warnings that firms would be bankrupted and that without this massive inequality between men's and women's remuneration our economy could not survive? Would he agree that those dire warnings were as irrelevant then as the ones he receives today are now?

Lord McIntosh of Haringey

My Lords, I am very pleased to have my noble friend's support and very pleased to be reminded that in this country the kind of dire warnings that she received are likely to arise again and should be ignored as she ignored them. Of course, minimum wages laws have been in force in many countries for many years without the kind of dire effects that people seem to expect now.

Baroness Miller of Hendon

My Lords, in view of what the Minister has just said, will he agree that national minimum wage laws in other countries have always had exemptions, which the Government have declined to provide in this country?

Lord McIntosh of Haringey

No, my Lords, I do not think I can agree. I have inquired into it and the most difficult area of the minimum wage is piecework. I found that the French minimum wage law includes coverage of piecework, as does that of the United States, so I do not agree that ours is a more draconian minimum wage law than that of other countries.

Baroness Gardner of Parkes

My Lords, can the Minister tell us whether recourse will be through the industrial tribunals? If so, what steps are being taken to increase the number of people dealing with industrial tribunal cases? There has been a huge increase in the number of employment cases and there is a backlog at the moment.

Lord McIntosh of Haringey

My Lords, the noble Baroness is right in saying that such matters will be referred to industrial tribunals in the first instance. There is also the possibility of reference to the civil courts. Of the 200 specific complaints to which I referred and which have been followed up by the Inland Revenue, there have been only 10 refusals to comply with the law. I believe it. is premature to make arrangements now to increase the facilities of the industrial tribunals, although we are prepared to do so if necessary.