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Lord Fraser of Carmyllie: My Lords, we have considerable sympathy for the amendment and would like to discover the Government's present proposal. Press reports indicate a conflict of view as to whether the Low Pay Commission should be permanent or have only a limited life. At the previous stage I was unsuccessful in ascertaining whether the Government's
intention is that it should be permanent. It would be helpful to understand their intentions and I should be grateful if the Minister could place them on record.
Lord Clinton-Davis: My Lords, I tried earlier, perhaps unsuccessfully, to do precisely that. If the argument needs reiteration, so be it. The Opposition and the Liberal Democrats have argued in another place and in this House that the Low Pay Commission should be permanent. Therefore, it is reasonable to ask the question posed by the noble and learned Lord, Lord Fraser of Carmyllie.
The Liberal Democrats, notwithstanding the aberration earlier today, have shown strong support for the Government's objective as regards the minimum wage. We see the commission having a continuing and important role to play and I will go into that in a little more detail in a moment. That will be important during the running-in period of the minimum wage and possibly in the longer term, too.
We intend that the commission should undertake two tasks. The first is to review the position of 21 year-olds. The rate for them is to be set in April 1999 at £3 an hour. We want the commission to review that in 1999 following the transitional rate being imposed at that level and then to provide a further report on whether, in the light of experience, it wishes to reconfirm its advice that 21 year-olds can safely be covered by the main adult rate. That is an important and useful role and we shall await with interest its conclusions formed in the light of experience.
As I said earlier, we are also asking the commission to continue its work on monitoring and evaluating the introduction and impact of the national minimum wage. That is an important role for the commission, too, because this is the first time this country will have had a national minimum wage and we need to have a reliable assessment of its effects.
However, I do not believe that the amendment, which would require the Government to appoint a permanent body, is necessary. The commission can be required as appropriate to add to its expertise in the whole developing area. The Bill already allows the Government to call on the commission in this direction under Clause 8(9). I hope therefore that the noble Lord will examine further what I have said in that context. We provide the necessary way ahead to ensure that the commission can contribute as necessary and I hope that he will not press the amendment to a Division.
Amendment No. 14 prescribes particular issues which the commission must cover in its annual report. However, it does not limit the commission to looking only at those issues. We say that the amendment is somewhat overly prescriptive and too open ended. I would not disagree with the noble Lord in the way in which he wishes an examination and an assessment to be made in some of the important areas which need to be reviewed--for example, different sizes of business, different areas, gender, race and so on. However, I do not believe that we need to spell it out on the face of the Bill in the way that the noble Lord seeks to do. What
the LPC is already required to do is to look at economic and competitiveness factors in making its recommendations.Under Clause 7(5)(b) the Government may in fact establish other factors which the commission should consider. As I said, we want the commission to continue monitoring and researching the impact of the minimum wage; indeed, that is a perfectly reasonable thing to do. It is also a sensible way in which we can look forward to a reassessment of the position. I believe that the noble Lord also spoke to Amendment No. 63--
Lord Razzall: My Lords, I should point out to the Minister that it was the original intention that Amendment No. 63 should be included in the grouping, but that is no longer the case.
Lord Clinton-Davis: My Lords, I apologise and thank the noble Lord for that information. I hope, therefore, that the noble Lord will feel that our approach to the important issue that he raised is positive and that he will not find it necessary to test the opinion of the House. However, if he does so decide, that is a matter for him.
Lord Razzall: My Lords, I thank the Minister for that response. The relevant clause on which the issue turns is Clause 8(9) to which the noble Lord referred. That subsection says:
- "The Secretary of State may at any time appoint a body ... to discharge the functions conferred or imposed on the Low Pay Commission under this Act".
As the Bill has crawled its way through the other place and also through the various stages in this Chamber, I believe I detect that the Government are getting ever closer to actually confirming that they do intend to appoint such a body. Indeed, if between now and Third Reading the Government could go just that extra mile or, indeed, that extra centimetre and so confirm, it would, as the Minister said, completely take the heat if not the sails--and that may be a mixed, strangulated metaphor--out of our amendment. I certainly do not wish to press the two amendments at this stage. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
6.45 p.m.
Clause 9 [Duty of employers to keep records]:
Baroness Miller of Hendon moved Amendment No. 15:
The noble Baroness said: My Lords, in moving the above amendment, I shall speak also to Amendment No. 16. When I moved the same two amendments in Committee, I truly believed that I was proposing a constructive improvement to the Bill. The amendments would not affect in the slightest degree what the Government claim are the objects of the exercise. The amendments would not reduce in the slightest degree the right that the Government propose that employees should enjoy, nor would they reduce the obligations on an employer to maintain accessible records that would provide employees with all the information that they need to check that they are receiving the minimum wage.
What I proposed in Committee--and again propose now--is the blindingly obvious suggestion that the various records that the employer is already obliged to maintain for the purposes of PAYE and national insurance, coupled in due course with the records required to comply with the European Community's Working Time Directive, should also be sufficient for the purposes of this Act.
What a helpful suggestion that was! It would reduce the amount of paperwork required to be done by very small firms without the ability to handle more than a minimal amount of clerical work and bookkeeping. The records would be in a form which would be easily understood, especially after the Secretary of State made regulations under Clause 12 about the information to be included in their pay packets. The accuracy of the records themselves would be guaranteed under the sanction of severe financial and criminal penalties provided by the taxation and social security legislation--sanctions far more severe than those proposed under this Bill. Using the PAYE, the national insurance and the working time records would enable those responsible for enforcement to check compliance by referring to documents in a form with which they would already be familiar. How prophetical that last point has proved to be, as your Lordships will see shortly.
So what happened to my totally non-political reasonable, helpful and entirely practical suggestion? The noble and learned Lord the Solicitor-General shot it down in flames in a speech that was half as long again as the one that I had made. The noble and learned Lord conceded my point about what he called,
He said that that was an aim that the Government unquestionably shared. So why do the Government not accept the amendment? The Minister said that it was because they had made a commitment to consult on the draft regulations before bringing them to the House.
I am really trying to avoid making political points in this very non-partisan amendment. So I will not say that I wish I did not have this nagging feeling that the Government will simply go through the motions of consulting, and then use their rather large majority in the other place to do exactly what they intended to do in the first place. I see the noble and learned Lord is looking surprised; but I am not a bit surprised. However, I shall be interested to know what better and improved types and form and format of records the Secretary of State has in mind. Surely she must already have some idea.
On the last occasion that these amendments were debated at col. 1385 of Hansard, the Minister said:
In the month that has gone by since that speech was made, can the Minister say whether the Secretary of State has even begun to formulate the most sketchy of ideas? If so, perhaps the House could now be informed as to what they are. I should also be interested to know how the Secretary of State believes that it will be helpful to employers and employees--and to those who are responsible for enforcement--to require a different form of records or the same form of records written on a second piece of paper.
In any event, despite what I thought was the reasonableness of my suggestion, the Government rejected my amendment; as, indeed, they have done with every one of the 108 amendments that bore my name up until today. But luckily I am made of sufficiently stern stuff to take such rebuffs with total equanimity. Therefore, I decided to let the Government stew in their own juice over the matter. If the Secretary of State was bent on empire-building, with more inspectors and enforcement officers, then perhaps the silver cloud was that it could provide employment for the many people who will be forced out of their present jobs, or who will fail to get jobs, as a result of the adverse effects of this misconceived piece of legislation.
However, something then happened: the report of the Low Pay Commission was published. What did it recommend? This is where the prophecy to which I referred earlier comes in. The commission enthusiastically endorsed the idea of the Contributions Agency, soon to be combined with the Inland Revenue, to be responsible for overseeing compliance and to be responsible for enforcement. It spoke in glowing terms of the expertise of the agency in such matters.
I assume that the noble and learned Lord the Solicitor-General was as much in the dark as I was on 15th June about what the commission would recommend. He did not know--indeed, he could not have known--that my proposal would fit in precisely with the recommendation about the enforcement authority. If he had known that, he would undoubtedly have agreed that it would be ludicrous to have the
Can the Minister tell us whether the Government are going to accept the commission's recommendation on the enforcement agency? If not, perhaps he can tell us why not. However, if the answer is yes, what is the continued objection to this amendment? I look forward with much pleasure to hearing the Minister telling us just for once that he will say "yes" instead of "no". I beg to move.
Page 7, line 30, at end insert--
("(1A) Records kept by an employer in relation to any worker for income tax or national insurance purposes shall be deemed to satisfy in relation to such worker any requirement as to records of remuneration paid as may be provided for in accordance with subsection (1)(a) above, save for details of the number of hours worked and any benefits in kind or other items having a monetary value which in accordance with the directions of the Low Pay Commission are to be taken into account in calculating the worker's gross pay, of which employers shall keep an adequate separate record.
(1B) In subsection (1A) above, "income tax or national insurance purposes" means the purposes of compliance with--
(a) section 15 of the Taxes Management Act 1970,
(b) section 203(2)(b) of the Income and Corporation Taxes Act 1988,
(c) paragraph 8 of Schedule 1 to the Social Security Contributions and Benefits Act 1992,
(d) any regulations for the time being in force made under any of the above Acts, or
(e) any statutory re-enactment or modification of any of the above Acts or regulations.").
"an entirely laudable aim ... to avoid undesirable duplication in the records kept by the employer".--[Official Report, 15/6/98; col. 1382.]
20 Jul 1998 : Column 638
"I cannot tell the Committee at this point exactly what type of records we shall be requiring".
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