National Minimum Wage Naming Scheme

Stephanie Peacock Excerpts

Tuesday 4th June 2019 Commons Chamber

[Stephanie Peacock (Barnsley East) (Lab)]

(Urgent Question): To ask the Secretary of State for Business, Energy and Industrial Strategy to make a statement on the suspension of the national minimum wage naming scheme.

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Kelly Tolhurst)]

Enforcement of the national minimum wage and the national living wage is a priority for the Government, and we take tough action against the minority of employers who underpay. Last year, employers were ordered to repay over 220,000 UK workers a record £24.4 million of arrears. We have more than doubled the budget for minimum wage compliance and enforcement since 2015, and it is now at a record high of £27.4 million.

As part of our enforcement approach, we name employers who have breached the legislation, which raises awareness of national minimum wage enforcement and deters others who may be tempted to break the law. To date, the Government have named almost 2,000 employers who have underpaid the national minimum wage. The Government are reviewing the naming scheme to ensure that it continues effectively to support minimum wage compliance. This is in response to a recommendation made by the director of labour market enforcement, Professor Sir David Metcalf, last year.

In December 2018 we accepted both of the director’s recommendations relating to the naming scheme, specifically to review the scheme’s effectiveness and to consider how to provide further information under the scheme in future. The Government have sought to learn from other naming schemes and other regulatory approaches. We have also discussed the evidence with the director of labour market enforcement and have conducted further analysis to understand the impact that any changes to the scheme would have on the number of employers named.

Naming and shaming remains an important part of our enforcement toolkit, and the review will be concluded in the coming weeks. Any changes to the scheme will be communicated through the national minimum wage enforcement policy documents.

[Stephanie Peacock]

Thank you, Mr Speaker, for granting this urgent question, which finally forces a Minister to admit to the House that the Government have quietly dropped one of the few policies they had to protect vulnerable workers. The naming scheme had exposed nearly 2,000 employers who illegally underpaid nearly 100,000 workers by millions of pounds, including household names from TGI Fridays to Marriott hotels, but the last such list was almost a year ago.

As we now know, the Government have privately decided to suspend the scheme, despite the Department’s official guidelines maintaining that the scheme still operates. The Minister claims this was based on a recommendation of the director of labour market enforcement, made over a year ago, yet the director made no such recommendation to suspend the scheme; he simply called for an evaluation and specific improvements. The Government accepted those recommendations, so why have they not simply implemented them and continued with the scheme in the meantime? Can the Minister confirm that as this review has “no set completion date”, this policy has been effectively halted? Can she tell us what progress the review has made in the last year? What evidence has it taken, what research has been commissioned, what work has her Department done, and what proposals will come to the House and when? Or is the so-called review in reality just an excuse to let bad employers off the hook?

This is the latest in a long list of policies that would help working people, from fair tips to equality for agency workers, that have been delayed or dropped by the Government. Time and again, they crack down on the vulnerable and back down before the powerful. When will this capitulation to rogue employers over working people finally end?

[Kelly Tolhurst]

I have to say that the hon. Lady is incorrect: the scheme has not been dropped. Given the impact that being named can have on a business, it is right that we properly consider the effectiveness of the naming scheme. We want to make sure that our enforcement approach balances the need to crack down on the most terrible employers, who purposely and persistently break the law, with the need to be fair to and educate employers who try to do the right thing.

We are in no way going soft on employers. Last year, we issued record financial penalties to more than 1,000 non-compliant employers to the value of £17 million. That was part of our commitment to support workers’ rights. Our good work plan sets out a vision for the future of the UK labour market and includes an ambitious programme of work to implement 51 of the 53 recommendations Matthew Taylor made in his review of modern working practice.

I must point out, however, that it was this Government who gave the lowest paid workers the biggest increase in the national living wage in 20 years.