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Lord Thomas of Gresford: My Lords, my objection to the way in which Clause 26 is framed is its breadth, referring to any witness in any case. I suggest there is no inconsistency in conceding that in the case of a child or a person suffering from mental incapacity, special provisions should and could be made. One is broadening the whole scope of the clause to people who are not simply intimidated--the word used by the Minister--but those who can claim eligibility for having their videoed interviews shown by way of evidence-in-chief through distress at giving evidence. It is very much a weakening of the existing position where fear has to be proved before a statement can be read to the court.

I am grateful to the Minister for his usual courtesy in dealing with the amendment. However, he has not addressed the fact that there is no criterion that the courts should act in the interests of justice nor has he addressed the lack of sanction that applies to a videoed interview. In my view, these matters are important and must be returned to at Third Reading. For the moment, however, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Hoyle: My Lords, I beg to move that further consideration on Report be now adjourned. In moving this Motion I suggest that the Report stage begins again not before 8.25 p.m.

Moved accordingly, and, on Question, Motion agreed to.

National Minimum Wage Act 1998 (Amendment) Regulations 1999

7.43 p.m.

Lord Sainsbury of Turville rose to move, That the draft regulations laid before the House on 16th February be approved [10th Report from the Joint Committee].

My Lords, I am proud to come to this House today to present these draft regulations on the national minimum wage. For the convenience of Members I shall speak about both sets of regulations together.

This Government were elected on the promise that they would introduce a national minimum wage. We are now approaching the end of a long road which has brought us to the brink of delivering that promise.

Your Lordships have, of course, already contributed to this process. There were useful and interesting debates on various issues when the National Minimum Wage Bill was being considered last year. I hope that the debate this evening will be equally productive.

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The Bill provided the framework of powers to establish a national minimum wage. The draft regulations which are now before the House use some of those powers to put the detailed technical arrangements in place. I shall explain what they do in a little while.

The Government have placed a premium on consultation and transparency throughout the process of bringing forward the minimum wage. We set up the Low Pay Commission which did a UK-wide consultation, receiving some 600 responses from all sectors and sides of industry. We placed its report before this House. We carried out a further consultation on the draft regulations and received some 300 responses. A report on its outcome has been placed in the Library of the House. We have also laid before the House a report on areas where the regulations depart from, or build on, the original Low Pay Commission recommendations.

I believe that this has been a massive and continuing effort with input from all sides: employers, workers, trade associations, unions, academics and Government. My noble friend Lord Haskins has welcomed the way in which my department has carried out this process.

As a result of the consultation, we have adjusted the regulations in a number of ways. These reduce unnecessary burdens on business, but without compromising protection for workers. First, we have decided not to proceed with a requirement for employers to provide a statement of the minimum wage on every payslip. We believe it is preferable to wait and see whether that should become necessary in the light of experience. I believe in any case that employers will find it to be in their own interests to ensure that their staff know about the minimum wage in order to avoid confusion and unnecessary disputes. My department is including, in the guidance that will be available, a model poster which I hope employers will want to display at the workplace. We cannot require employers to do that but it seems a sensible thing for good employers to do.

We have always regarded it as important to ensure that workers are aware of their rights, and employers of their obligations. We fully recognise that the Government have a role in this process as well. That is why the National Minimum Wage Act requires the Secretary of State to publicise the minimum wage. That is why we are spending around £5 million to ensure that people know what the national minimum wage is all about.

Secondly, we have decided not to require employers to keep specific records, but that they should be required to keep sufficient records instead. In other words, it will be left to the employer to judge what counts as sufficient in the first instance. We considered this issue very carefully because some businesses have told us that they would welcome knowing precisely what records should be kept. As a result, the guidance will contain advice on the kind of records that might be regarded as sufficient.

I believe that is a sensible starting-point. It should not reduce protection for workers, because they will still have a right of access to the records if they believe they are not receiving the minimum wage. In the event of a dispute, it will still be for the employer to prove that he

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has paid the minimum wage, rather than for the worker to prove that he has not received it; and it will still be a criminal offence not to keep records or to keep or produce false records.

We have also included special rules for workers who receive an annual salary in regular payments but who work irregular hours at different times of the year: for example, workers who work only during the school term but who are paid a regular amount throughout the year. During the consultation, concerns were expressed by representatives of employers and workers that the original draft regulations would require them to restructure their work and pay arrangements, even though the workers in question received the minimum wage for the time they were actually working. The effect of these rules is to treat annual working hours as if they were evened out across the year, reflecting the evening out of pay received. As a result, there should not be any need to restructure existing arrangements.

I hope that I have shown that the Government have taken pains to listen to responses, and have adjusted the regulations where appropriate but without reducing protection for workers or affecting the integrity of the minimum wage. As a result I am confident that the regulations will achieve their main aim; that is, the elimination of unfairly low pay, but with minimum knock-on effects or disruption to existing arrangements. The cost, as estimated in the Regulatory Impact Assessment, is confined purely to the impact on the paybill at around 0.6 per cent. of the total UK paybill.

I said that I would come back to the coverage of the regulations themselves. In my view the regulations do the minimum necessary to enable a minimum wage system to operate effectively. Without going into all the details, I shall pick out the main areas which they cover.

They set the rate of the minimum wage: £3.60 for those aged 22 and over; £3 for those aged from 18 to 21; and £3.20 for those aged 22 and over who are undertaking accredited training in the first six months of a new job. In this respect, the regulations also define what counts as "accredited training".

The regulations define what counts as pay--broadly in line with what the Low Pay Commission recommended. It is absolutely essentially to do that for certainty and to ensure that the rate amounts to the same thing for every worker and employer. The starting point is gross pay including, for example, incentive payments or bonuses as well as tips paid through the payroll. Accommodation can be counted, up to a maximum of £19.95 per week. But other elements are excluded; for example, overtime and shift premia, allowances that are not consolidated into basic pay, the provision of tools, a uniform or other equipment needed for doing the job.

It is equally essential to define what hours count as time when the minimum wage is payable. Again, the regulations keep broadly to what the Low Pay Commission recommended. In general, the times when a worker is at work and required to be at work will count, as well as travelling or training during working hours. There are also special arrangements for calculating the hours of pieceworkers and workers who have specified tasks but no set hours in which to do them.

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It is also essential to show how to calculate a worker's hourly rate of pay, so as to check whether he or she is receiving the appropriate rate of the national minimum wage. The basic principle of the regulations is straightforward: the amount of pay that counts towards minimum wage pay is divided by the number of hours for which the minimum wage is payable.

I hope that that has given a flavour of what the regulations cover. The guidance will provide a comprehensive introduction to the rules, with many worked examples to assist understanding.

The introduction of a national minimum wage represents a significant step in tackling poverty in this country. At the same time we have sought to make certain that small businesses in particular do not have to take on any unnecessary administrative burdens. These regulations represent a sensible and reasonable starting point. But it will also be important to ensure that we keep a close watch on how things develop in practice, so that we are in a position to respond as necessary.

As I have already indicated, the Low Pay Commission has been given a role in monitoring the introduction of the minimum wage. I am confident that it will carry out this task as expertly as it conducted its first investigation and I look forward to receiving feedback. We shall also be getting more continuous feedback from the Inland Revenue, who have been appointed to enforce the minimum wage. In addition, we shall keep an eye on cases that come forward to the courts and the tribunals. By keeping all these avenues open, I am confident that when the time comes to make any adjustments to the regulations in the light of experience, we shall be able to do so in a reasonable way.

I hope that I have been able to explain what the regulations are, what they do and why, and to show that they reflect the outcome of a very thorough process to which the Government responded in a flexible and realistic way. I commend the regulations to the House.

Moved, That the draft regulations laid before the House on 16th February be approved [10th Report from the Joint Committee].--(Lord Sainsbury of Turville.)

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