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Lord Razzall: My Lords, I begin with a slight admonition of the noble Baroness, Lady Miller of Hendon. In the debate on the Bill, I disagreed with virtually everything she said, but she is someone with whom I have had the best of relations. It is not true that the Opposition opposed the Bill. One opposition party did so, and that was the Conservative Opposition. There is more than one opposition party in this House. One might say that there are three opposition parties, if one takes the two wings of the Conservative Party--but that is for another occasion.
It should be made entirely clear that the Liberal Democrats have been four-square with the Government on the necessity of introducing the minimum wage legislation. We have supported them throughout. I trust that the Minister will take my remarks in that context. Unlike the noble Baroness, we come from a position of overall support for the legislation's aims and objectives.
We entirely support the position that the Government adopted after consultation with regard to record- keeping. We were concerned, like many others in the House and the business community, that a draconian structure would be imposed--particularly on small employers. We much welcome the approach indicated by the Minister and set out in the Bill. We hope that the same commonsense approach will be adopted by the Government when listening to the concerns of the business community on other regulations as the legislation moves forward initially in coming years.
I want to put down markers for three areas of some concern. Although the Minister was not involved directly in the legislation, he will be aware--together with the noble Lord, Lord Simon of Highbury--that one of our concerns is to advocate permanent status for the Low Pay Commission. Although some progress is reflected in the regulations, we would press the Government to go further in entrenching the commission as a permanent body to monitor the regulations' effects on the general business community, young people and regional variation--on which we have bored for Britain.
Our second concern goes less to the form of the regulations and more to the timing. The regulations are intended to come into effect on 1st April 1999. That is a short time for regulations of such complexity affecting all employers to be introduced. Indeed, both in this House and in another place a number of people have expressed concern with regard to the working time regulations. Some felt that these were introduced on a very fast time track without necessarily allowing an appropriate period for the business community to take them on board, accommodate them and implement the results. We have some worries that the timetable will impose pressures on business. In future, when new regulations are to be brought in or finalised, we ask the Government to undertake to ensure that there is perhaps a longer lead time into the period than will actually happen between early March and 1st April when the regulations come into effect.
A further point flowing from that is that, as the noble Baroness, Lady Miller, indicated--indeed, it was touched upon by the Minister--these are complicated regulations; indeed, by definition, they must be complicated. Presumably the key document for employers and employees will be not so much the regulations, which will provide the framework within which rights are given and obligations undertaken, but the explanatory memoranda that are sent out and the information that the department gives to firms, companies and staff regarding the implementation of these regulations. Such explanatory memoranda should be written in as easy a manner to understand as possible. They should also be produced and disseminated, in the light of the very tight timetable, as soon as the regulations have been approved by Parliament. I would welcome some indication from the Minister that that point has been taken on board; that the process is under way; and that employers can expect to receive clear instructions on how to implement these regulations as soon as they are in place. But overall, as I said at the beginning, we support the Act and clearly, therefore, we support the regulations that are being brought in to implement it.
The Lord Bishop of Bristol: My Lords, in addressing your Lordships' House I want to make it quite clear that the Church is not taking issue with the principle of the minimum wage or of the legislation to establish and regulate it. Indeed, many of us have fought for this for a long time and we believe it to be right. The Church is not seeking any general exclusion from the provisions of this Act. However, the Church does have concerns about the possible impact of the legislation on religious communities. About 200 community houses have been identified as being affected by the legislation and some 20 communities have actually been actively lobbying on behalf of the rest. If I may say so, it is estimated that each community is involved with about 500 people a year at the lower level; indeed, in the L'Arche Communities, the number is something like 5,000 people a year. Those are considerable numbers of people who are being served.
Perhaps I may give the House just one example, which I believe will help noble Lords understand the exact nature of the problems. I should like to take the L'Arche organisation which describes itself as,
The major problem with the new National Minimum Wage Regulations is that they do not allow L'Arche to take any account of the value of free subsistence and accommodation that its live-in assistants receive over and above the figure of £19.95 per week, as set out in the regulations and to which reference has already been made. That is clearly unrealistic, given the fact that such accommodation actually costs more in the region of £100 a week. If L'Arche were allowed to take account of the full value of the accommodation and living costs at the same level paid to live-out assistants in its workshops, the wage levels of live-in assistants would exceed the minimum wage figure given in the regulations. So it is not trying to find a way to make things work on an easier basis; it is the way in which costs are actually worked out.
However, if the people we are talking about here were demoted to the status of volunteer they would fall outside the regulations; but would be denied any additional payment over and above basic subsistence and accommodation. Their long-term security would be totally the responsibility of the state. L'Arche believes that it is thus being penalised for treating people well. So surely, if no concessions are made, L'Arche believes that it will be faced with an increased wage bill of about £500,000 a year. As it is dependent on local authority funding that is already fixed, it could only continue to operate by making assistants redundant or, in extremis, returning people with learning disabilities to the care of their local authority, with all the costs implicit in that action.
Surely the latter is not the intention of the legislation, or of the Government in introducing it. I was, therefore, delighted to hear the Minister say that officials are even now preparing guidance on the interpretation and application of minimum wage regulations. But as they are now to come into being on 1st April of this year, noble Lords can understand that 200 community houses look to this month with considerable concern. Representatives of those communities and other Church bodies look forward to the opportunity to discuss how these voluntary workers are to be considered under the legislation, and how they are to be treated. Such religious communities do very special and valuable work; indeed, it is often work that no one else is willing to undertake. Surely it is in no one's interest that their service should thus be jeopardised.
Lord Sainsbury of Turville: My Lords, we have had a useful debate which has focused on a number of key aspects of this important measure. I should like to deal with the main points which have arisen. We estimate that there are 2 million workers who will benefit from these regulations. Employers, too, have welcomed the regulations as laid. The Confederation of British Industry has said that the Government have made a number of sensible changes which should help keep down the administrative burden.
I should like, first, to deal with the question of delay and the concern that has been raised that there has been too little time between laying the regulations and their entry into force. On the other hand, others--and we will come to this later--may see the regulations as being
In the first place, the Government have conducted a very thorough consultation on the regulations. A large number of representations were received raising important issues which required careful consideration. I believe that it was right for the Government to take the time to ensure that the regulations properly reflected the outcome of the consultations. However, I do not believe that it would have been right to put back the date of the implementation from 1st April. That would have gone against the recommendation of the Low Pay Commission and would have denied low paid workers the benefit of the minimum wage for a longer time: they have waited long enough.
I turn now to the question of complexity. It is always easy to take a piece of legislation and make it sound ridiculous by concentrating on particular aspects of it. These regulations are inevitably complex in some places. This is because they need to cover the great variety of working and pay arrangements throughout the country. For example, they must cater for piece workers at home and in the factory, people who work on commission, workers who are engaged in unseasonal employment and workers who do long or unusual hours as well as their employers. That is where the complexity comes in--because life and work are indeed complex. In this respect, these regulations are no different from other areas of employment law which must cover the exceptional as well as the standard cases.
I can, however, assure the House that for the great majority of businesses and workers who operate on the basis of a nine to five day with regular pay, the regulations represent a straightforward approach which is in line with the definition of pay and working hours that was recommended by the Low Pay Commission in its report published last June.
In addition, the Government are committed to ensuring that employers are aware of their obligations and that workers are aware of their rights under the minimum wage. As I said at the start of the debate, we have decided to spend some £5 million on telling people about the national minimum wage in the run-up to 1st April and after.
There is already a helpline which sends out preliminary guidance and answers enquiries. My department is already issuing preliminary guidance based on the overall scope and effect of the National Minimum Wage Act. When, subject to the approval of this House, the regulations are passed, my department will be releasing detailed guidance as well as shorter leaflets designed for employers and for workers. We asked businesses what they wanted to see in such guidance and we have aimed to produce it. In particular, businesses have told us that they wanted clear and comprehensive guidance with worked examples. I believe that the guidance we have produced, and the back-up enquiry lines, will be helpful to both small and large businesses in adjusting to the minimum wage.
I shall now deal with one or two other specific points raised in the debate. There was the question of au pairs. I think we have arrived at a sensible position on this in which au pairs will be excluded, but only to the extent that they are treated as part of a family, particularly as regards the provision of accommodation and meals and the sharing of tasks and leisure activity.
The guidance note, to which the noble Baroness referred, was specifically listed as preliminary guidance. We have instructed the distribution company not to give out any more copies until the definitive guidance is available, and the definitive guidance will make clear what we have done in relation to au pairs and the extent to which they are exempted.
I turn to the question of wages: what wages should be counted as income. The situation here is simple. It is different from the point of view that it is specifically defined in the regulations because we do not want all the possible benefits other than the specific case of accommodation to be counted against the minimum wage and therefore lead to the dilution of the basic principle. That is why we have only set on the accommodation offset and we have fixed that at a specific figure of a maximum of £19.95.
The question was also raised of charities and intentional (religious) communities. The position of charities and religious groups is one to which we have given a great deal of thought. We have concluded that there is no way of allowing workers to opt for less than the national minimum wage without giving less scrupulous employers the opportunity to put pressure on vulnerable workers to sign away their rights. DTI officials are in contact with many of these groups and will be working with them to produce special guidance for charities adjusting to the National Minimum Wage. Our overall approach has been endorsed by the National Council for Voluntary Organisations, community service volunteers and major charities. If you are a genuine volunteer there is no reason for you to be caught by the minimum wage in the first place. But if you are a low paid worker, you will be caught by the minimum wage. There are in this case particular issues which relate to the interaction between intentional communities and the question of accommodation, and we will need to work through that with the DTI officials.
The question of apprentices was raised. I would only say here that there is a complicated balance to be made between incentives to employers and incentives to employees. I believe that employers who believe in the value of training will continue to do this even in circumstances where, after the first year, they have to pay the minimum wage.
In approving these regulations we have been taking part in a historic process. The introduction of a national minimum wage into a flexible labour market--the first time since the last war that this has been attempted--will help lift 2 million people out of poverty and reliance on benefit and I hope will prove also a spur to improved business performance. I beg to move.
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