National Minimum Wage (Offshore Employment) (Amendment) Order 2020

Lord Hain Excerpts

Thursday 25th June 2020 Lords Chamber

[Lord Hain (Lab) [V]]

My Lords, I, too, welcome this proposal to extend minimum wage protection to a group of workers whose vital contribution to the UK economy too often goes overlooked and underappreciated and who frequently do their jobs in dangerous conditions. Mentioned fleetingly in paragraph 7.8 of the Explanatory Memorandum is the Government’s claim that the amendment,

“will allow HMRC to focus enforcement on seafarers working domestically in UK territorial waters”.

Our whole experience of minimum wage law since 1999 has been of weak enforcement with insufficient resources spread widely and thinly, leaving low-paid workers vulnerable to rogue employers who ride roughshod over the minimum wage laws. In 2017, the then director of labour market enforcement Sir David Metcalfe pointed out that a UK employer was on average likely to be inspected by HMRC only once every 500 years. In February this year the Department for Business, Energy and Industrial Strategy reported that since 2007, only 15 employers had been successfully prosecuted for underpaying the minimum wage, around one a year. Neither the department nor HMRC has the budget or the staff numbers vigorously to enforce Britain’s minimum wage laws. We have become used to this Government overpromising and underdelivering and sadly, they are doing so again here for seafarers working in UK territorial waters or in the UK sector of the continental shelf. The Low Pay Commission reckons that between 300,000 and nearly 600,000 over-25 year-olds were paid below the minimum wage in 2016. No wonder the Low Pay Commission concluded that

“there remains a rump of employers and businesses that consider the low likelihood of enforcement worth the non-compliance gamble.”

That is the reality of life in Britain’s so-called flexible labour market, including for seafarers. Sir David Metcalf believes we need tougher penalties for breaking the minimum wage laws. Companies caught paying staff below the minimum wage can currently be fined up to twice the value of the wage arrears they owe. Metcalf says that five times might be better. The total amount of fines imposed on employers for underpaying the minimum wage recently was £3.9 million, much less than the £10.9 million in wage arrears identified by HMRC. Millions of exploited people work in low-paid, insecure jobs and they deserve much better, including offshore workers.