§ Mr. Hancock
asked the Secretary of State for Employment if he has any evidence of a correlation during the years 1979 to 1985 between the numbers of people employed in the wages inspectorate and the numbers of workers paid arrears after their employers were found to have been underpaying them; and if he will make a statement.
§ Mr. Peter Bottomley
The number of inspectors influences the number of underpayments found, but the link is not necessarily causal and does not hold under all circumstances. For example, in 1969, when there were 146 inspectors in post, only 13,000 workers were found to have been underpaid whereas in 1984, when there were 115 inspectors in post, over 18,000 workers were found to have been underpaid. As 17 per cent. of the establishments visited in 1969 were found to have been underpaying one or more workers compared with 35 per cent. in 1984, it is clear that the general level of compliance is a very important factor.
The figures for the period to which the question relates were as follows: 168W
Wages Inspectors in post Workers paid arrears and wages Percentage of establishments visited under-paying one or more workers per cent. 1979 159 22,457 31.5 1980 155 28,373 35.1 1981 117½ 24,117 41.3 1982 116 18,562 39.8 1983 116 18,494 37.4 1984 115 15,801 35.6 1985 (June) 120 * * * Not available
In interpreting the figures given above it is important to bear in mind that the Wages Inspectorate is influential in helping to secure the current generally high level of compliance. Only 6 per cent. of the workers whose pay was checked in the past three years were found to have been underpaid.
In addition to the general level of compliance, there are other factors which influence the relationship between the figures. These include:
- (1) the tendency in recent years for more workers to be paid at or slightly above the minimum rate thereby leaving less margin for error;
- (2) the increase in the number of businesses closing down and having no resources to meet claims for arrears of wages;
- (3) the size of awards by wages councils;
- (4) increased compliance resulting from the publicity given to wages councils matters during the past two or three years; and
- (5) the extent to which individual workers ask the Inspectorate not to pursue payment of arrears.