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Baroness Miller of Hendon: My Lords, I know the Minister will not be surprised when I say that the Opposition did not welcome this Act and did not believe it to be a good one. However, we believe that any proposal that ameliorates the problems that might arise with the National Minimum Wage Act is to be welcomed.
During the passage of the Bill through both Houses we warned the Government that it would have adverse effects on employment prospects of some vulnerable categories of employees. Though the noble Lord spoke to both orders together--I will continue to deal with them together--my comments now refer specifically to the amendment regulations.
To adapt an aphorism of the late Harold Wilson as he then was, one person's minimum wage is another person's job seeker's allowance. This is not the first U-turn that the Government have had to make over the operation of an Act which has not yet even come into
I mentioned this matter to the Minister outside. This morning two pieces of paper were faxed to me. One was an extract from Stephen Byers' report on regulations supplementary to the national minimum wage dated 16th February. It contained a paragraph which said that au pairs are excluded from the national minimum wage regulations. At the same time, or shortly afterwards, I was faxed something from one of the activity centres (to which I shall turn later) which appears to be preliminary guidance on the national minimum wage from the Department of Trade and Industry. The activity centre is not sure whether it received it on 23rd or 24th February, but it was certainly either last Tuesday or Wednesday. It stated that all workers, including part-time workers, pieceworkers, home workers, agency workers, domestic workers including au pairs must receive at least the national minimum wage.
I understand that a problem arose in that the Home Office did not anticipate what the DTI would announce a week later. Those things happen. But it is extraordinary that, once the Secretary of State at the DTI had made a statement on it, a leaflet on guidance was dispatched by officials of the DTI more than a week later saying that au pairs are included in the national minimum wage.
I am particularly glad to see that the Government are going to take powers to exempt those over the age of 26 in the categories (b) and (c) referred to in the regulations. Those are persons who participate in a scheme under which shelter is given in return for work and those participating in a scheme designed to provide training and work experience.
In the debate on one of my amendments I drew attention to the problem of those working at holiday summer schools, what are usually called "activity centres". I warned that the application of a national minimum wage to their staff, who were actually engaged in gaining work experience towards national vocational qualifications, would not only put the activity centres out of business but would also have a devastating effect on local communities who depended upon them, as well as depriving up to 200,000 children every year from a much-needed facility provided by these charities.
Unfortunately the noble Lord, Lord Haskel, who dealt with the amendment at that time, was unable to offer me any comfort except to refer to Section 44 of the Act, which I do not believe to be applicable. However the provisions go some way towards meeting the needs of the activity centres. I hope that the Secretary of State will exercise the powers he had taken in that regulation in their favour as soon as possible. I say, "go some way" because it would only be applicable if they were over 26; not in the gap between 18 and 26 when people might be working in those centres or studying there.
It is also a matter of some considerable disappointment, especially to those in the engineering industry, that the Government, when taking these second thoughts, have still not exempted apprentices. That was a recommendation of the Low Pay Commission and I hope that even at this stage the Secretary of State will consider that.
There is also a change in the proposed record-keeping requirements, which I will mention later and which the Minister has just discussed. I am not against politicians of whatever party making U-turns whenever they realise that they have got something wrong or have discovered that the electors who sent them to the other place do not agree with them. I am certainly not criticising the Government for their change of mind in respect of people over 26. On the contrary, I congratulate the Government and welcome their decision.
The main regulations, which we awaited with bated breath, define the value of the elements that make up the national minimum wage--cash payments, residential accommodation, food and other benefits in kind. In Committee, I introduced an amendment that defined in the simplest possible terms wages, benefits and anything so defined by the Inland Revenue for the purpose of income tax. I hope that your Lordships will excuse me for quoting myself. I said:
Paragraph 36(1)(a) on page 33 defines the amount to be taken into account where living accommodation is provided. The length of the regulations speak for themselves when compared with my nine-word definition:
To describe those regulations as a dog's breakfast is to risk running foul of the RSPCA. The Minister said that guides are being produced. I ask that those produced by the DTI are written in simple language capable of being understood by unsophisticated employers and employees, and that they will be published as soon as possible.
Part V of the regulations refers to the records that the employer is required to keep. Regulation 38(2) says that the records that an employer shall be required to keep shall be in the form a single document. Let me applaud that uncharacteristic brevity and simplicity.
I remind your Lordships that in Committee, I argued for an amendment requiring the records to be kept in a quote "reasonable" form and that PAYE records should be regarded as adequate records, to avoid duplication.
The noble and learned Lord, Lord Falconer, rejected my amendments as being unduly prescriptive, but offered to consider closely and sympathetically the relationship between the PAYE and national insurance records and those required for the purposes of the 1998 Act. I am glad that after the consultation process, the Government conceded that I was correct and that two sets of records on two separate bits of paper are not required. I am also delighted that the Government have abandoned the idea of the massive written statement that in their original consultation document an employer would have had to prepare weekly.
The Government professed the desire that employees would be able easily to see that they were getting their entitlement to the national minimum wage. I doubt that they will be able to do so simply by reading the regulations. The main beneficiaries from the regulations are likely to be the lawyers, but then they work for much more than £3.60 per hour. This is the Government's Bill.
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