§ Lord Sainsbury of Turville
My right honourable friend the Secretary of State for Trade and Industry (Ms Hewitt) has made the following Written Ministerial Statement.
Last summer the Government asked the Low Pay Commission to produce its next report on the national minimum wage by the end of February 2005. We asked the commission to monitor and evaluate the impact of the minimum wage and make recommendations on the need for any change.
The Government arc today publishing the commission's 2005 report and I would like to take this opportunity to thank the chair of the commission, Adair Turner, and its other members for their work on this very important issue.
The main recommendations put forward by the commission concern the rates of the minimum wage.
The commission has first recommended increasing the adult rate of the minimum wage from the present £4.85 to £5.05 in October 2005, and to £5.35 in October 2006, subject to confirmation by the commission in February 2006, to check that the macroeconomic conditions continue to make it appropriate, and in light of the implementation of forthcoming age discrimination legislation.3WS
The final key commission recommendation is that we should introduce interest charges on arrears of underpayment of the minimum wage and impose financial penalties for seriously non-compliant employers. The great majority of employers are either compliant or pay minimum wage arrears without the need for any formal enforcement action. However, the Government understand the underlying point that the commission makes about the need to tackle seriously non-compliant employers more effectively. We are already considering a number of options for improving enforcement and intend to make a Statement on this in early summer. We will consider the point about interest charges in this context.
I would also like to take this opportunity to announce that the Government have decided not to pursue employers where workers are paid below the minimum wage in some pay periods, but above the minimum wage overall. Such action will enable us to concentrate our resources on employers deliberately seeking to pay workers below the minimum wage.
I have placed copies of this Statement, the report from the Low Pay Commission, the Government's individual response to the commission's recommendations and our draft regulatory impact assessment in the House Libraries.