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Lord Falconer of Thoroton: There are three amendments in this grouping, Amendments Nos. 65, 67 and 68. As the noble Baroness said, they all relate to record-keeping. I think we all agree on the importance of record-keeping to the success of the Bill. Without adequate records, it will not be possible to enforce the legislation. A worker needs to see what he is being paid, and an employer needs records in order to be able to defend himself in case he is accused of under-paying. It is therefore in the interests of all that adequate records are available. I believe that the noble Baroness accepts that.

Perhaps I may deal with the amendments in the order in which the noble Baroness did. Amendment No. 67 seeks to limit the Secretary of State's flexibility to decide the form and content of records by tying them to the types of records already required for income tax or national insurance purposes. It is drawn on what seems an entirely laudable aim; namely, to avoid undesirable duplication in the records kept by an employer. Underlying it there would also seem to be the desire to place as little a burden as is necessary upon the

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employer. That is an aim that we unquestionably share. We agree with the motive of avoiding duplication. We have said so clearly on a number of occasions, in particular in the regulatory appraisal for the Bill, where we pointed out that most wage detail will indeed already be kept for tax purposes.

Without being boring, perhaps I may remind the Committee of what we said in that document. We stated:

    "It is in employers' own interests to know how much they are paying their staff. Therefore, it is reasonable to expect that employers will already have records for the calculation of total pay that will be sufficient to calculate pay as it relates to the national minimum wage. They will already have such records available for inspection by the Inland Revenue and Contributions Agency".

The regulatory appraisal went on to note that there will be differences in the types of records to be kept, not least in relation to the number of hours worked and any non-monetary payments which may be allowed to count towards the hourly minimum wage rate. The amendment acknowledges that. That is why it expressly allows for different requirements to be added.

The noble Baroness has made the case for the clause as it stands within the terms of her own amendment. It is for the very reason that different types of records may be required that we have drafted the power to make record-keeping regulations quite broadly.

I should also remind the Committee of our commitment to consult on the regulations in draft form before bringing them to the House. There will therefore be an opportunity for businesses and individuals to make representations on the record-keeping regulations. I thank the noble Baroness for drawing my attention in the proposed amendment to the various related statutes covering record-keeping for tax and national insurance purposes. The Government will be considering very closely the relationship between those records and any further records to be kept for national minimum wage purposes in the light of the feedback from the forthcoming consultation.

I hope it is clear from my remarks that the noble Baroness's Amendment No. 67 and the Government's purpose in relation to it are very similar. We say that there should not be an amendment because we want to give maximum flexibility with the same aim. However, it goes slightly further. The noble Baroness may know that the Delegated Powers and Deregulation Committee regards the affirmative procedure that we have laid down in the Bill and which is required for these regulations as too high a level of parliamentary control for use of the power in Clause 9 to impose record-keeping requirements on employers. The committee believes that the negative procedure would be adequate. I also note its indication that this is a rather unusual conclusion for it to reach in the context of its security functions.

Far be it from me to want to make life unnecessarily difficult or complicated for the Government. However tempting the committee's proposal might be, I consider it preferable to stick with the affirmative procedure for this measure. It potentially affects all firms; it could add burdens upon firms; and we can expect this measure to attract substantial interest from employers and their

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organisations, who are always sensitive to the perceived expansion of red tape. It is a measure which could also involve quite complicated issues such as the keeping of records in the case of homeworkers and pieceworkers.

I very much hope that our introduction into the Bill of the affirmative procedure in relation to this matter, and our sticking to it despite the remarks of the delegated powers scrutiny committee, indicate that we are concerned about burdens on employers and want to make sure that they are as limited as possible. For those reasons, I do not believe it appropriate for the Bill to be changed in the way suggested in Amendment No. 67.

I now turn to Amendment No. 68. The noble Baroness made the point that she could not believe that a burden imposed by Europe could be less than a burden to be imposed by the DTI. Amendment No. 68 would limit on the face of the Bill the Secretary of State's flexibility to decide the formal manner of records to be kept in respect of hours worked for minimum wage purposes by tying them to records of hours worked which may be kept for the purposes of showing compliance with the working time directive.

Noble Lords will, I hope, welcome both these initiatives as a sign of the Government's commitment to improving the lot of workers who are obliged to work for too long and/or for too little. These are basic matters of social justice and fairness, as well as matters of sound common sense. It is much to the credit of this Government that we are proceeding apace with making them part of domestic legislation. As I have already said, we do not think it right to prescribe on the face of the Bill the type of records that must be kept. We intend to consult.

I have referred to the affirmative procedure. I should make it clear that the draft working time regulations, on which further consultation has just been completed, contain a general record-keeping requirement on all employers. Employers simply need to show that the limit of 48 hours' working time is being complied with. They are not necessarily obliged to keep records of hours worked as proof. For example, it might be sufficient for an employer to show that his premises are only open for 48 hours a week and that therefore none of his workers could be exceeding the time limit. Therefore there is no general requirement on all employers to keep records of hours worked. On that ground alone, the amendment would be unsuitable.

There is a more specific record-keeping requirement in the draft working time regulations which does require employers to keep records of hours worked. However, that applies only to those employers with employees who have opted to work longer than the 48-hour limit. I therefore have considerable doubts as to the suitability of this amendment in the context of the minimum wage.

However, I take the general point at which the amendment is perhaps aimed; namely, that minimum wage records will almost certainly need to cover hours worked, however that may be defined, and there may be scope for avoiding duplication with other, similar records. All of those sorts of issues will be examined during the consultation, and those particular issues can be examined when the regulations are placed before the House.

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Finally, the noble Baroness gave an extremely accurate account of the law in relation to Amendment No. 65--and thereby clearly demonstrated why it was wrong to insert the word "reasonable" in relation to this provision. I am sure that everyone agrees that reasonableness is something that we all desire. When we require an individual to make certain records and to keep them, we would not require him to keep them for an unreasonably long time, or indeed for an unreasonably short time. I cannot tell the Committee at this point exactly what type of records we shall be requiring, or the period of time for which they must be kept, because the detail will be determined by secondary legislation following a process of consultation. We shall draft the regulations and draw up a consultation document as soon as the Bill is enacted, if that be the wish of Parliament.

But let me take this opportunity to reiterate our overall enforcement objective. We will do our utmost to encourage everyone to comply with the national minimum wage. We will ensure that it is effectively enforced, and with the minimum necessary burden on business. Record-keeping is the key to that.

There are plenty of precedents for record-keeping requirements. There are already laws about keeping income tax, national insurance and VAT records, and about keeping sick pay and maternity pay records, to give just a few examples. I can assure the House that we shall look at those precedents, and more, in considering the periods for which records must be kept.

But the word "reasonableness" does not need to be written on to the face of the Bill. As the noble Baroness pointed out, the case of Associated Provincial Picture Houses in Wednesbury means that, in making a decision such as this, the Minister is required to act within the bounds of reasonableness. If he or she acts irrationally, perversely or outside the bounds of reasonableness, then subject to the circumstances of the case, there will be an opportunity for the person affected to go to court and raise the matter. If, however, as the noble Baroness now suggests and as she suggested on a previous occasion, you put in the word "reasonableness", you invite the applicant to bring proceedings to get the court to determine what it believes is the appropriate course, not what the policy Minister thinks. However, the last people in the world who should determine the matter is the courts. It should be the Minister, after consulting the people who will be affected--namely, business.

So despite the beguiling--I use the word again--and reasonable way in which it was put, with the greatest respect, the amendment is misconceived. I ask the noble Baroness to be reasonable and to withdraw the amendment.

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