Mr.
Djanogly: We only have a few minutes, but I will make a
start. There are some important principles in relation to this clause.
My main issue is to address whether these provisions dealing with the
level of penalty and mode of trial are going to fulfil their objective
of improving payment of the national minimum wage. The underpayment of
the national minimum wage is poor practice. It has a negative impact on
both employers and compliant companies, with the former being underpaid
and the latter being undercut. Further, those businesses that are
undercut are often small local businesses which bear the resulting
burden of unfair competition heavily. For this reason, we welcome the
Government’s proposal to address the issue of enforcement of the
minimum wage, which comes on the back of recommendations of the Low Pay
Commission’s report. However, I have recently had the
opportunity to review that report and I was surprised to read the
figures that it recorded for enforcement actions taken by HMRC. In the
period of 2006-07, it identified some 1,523 cases of non-compliance but
issued only 71 enforcement notices and two penalty notices. The total
value of underpayments was identified at some £3 million, with
the average arrears per worker being £214, as against a figure
of only £130 for the previous year.
The
Committee is no doubt aware that under the National Minimum Wage Act,
provision is made for criminal prosecution under six offences that
relate to the payment of the minimum wage, the maximum penalty for
which is £5,000. Those were not used for nine years until 2007
when two prosecutions were successfully made. One of them, a director
of a day nursery, was fined £2,500 and ordered to pay costs of
£500 for the offence of obstruction under section 31(5)(a) of
the Act. More recently, there have been two further prosecutions, most
notably, the case of a Sheffield butcher’s shop, which was fined
£800 plus costs and ordered to pay more than £11,000 in
compensation to two previous employees. The payment of that fine was
due by 1 October. I would be interested to hear from the
Minister whether it has been paid. My point is that we must not wonder
why we are being asked to give HMRC more powers when those that it
currently has are being used so sparsely.
The
Chairman: Order. My understanding is that the room
will be locked so that hon. Members can safely leave their papers here
if they so
wish. It
being One o’clock, The Chairman
adjourned the Committee without Question put, pursuant to the Standing
Order. Adjourned
till this day at half-past Four
o’clock.
|
