Employment Bill [HL]

I would like to continue with my probing of this part of the Bill. Clause 11 markedly increases the penalties for offences under Section 31 of the National Minimum Wage Act 1998. Whereas before there was only a summary offence with a top level fine of £5,000, now there is an additional possibility of an unlimited fine from a Crown Court. The Government’s consultation document on national minimum wage enforcement states that these new provisions will expect enforcement officers to issue penalties in almost all cases of underpayment. This will be a noticeable difference from the current regime, where I believe only two cases last year led to a penalty notice. Can the Minister explain what is preventing the compliance officers issuing more penalty notices now? Where in the Bill are the new provisions that will lead to such a drastic improvement in enforcement procedures? I would also like to probe the necessity for the criminal offence. The consultation document states that only 3 per cent of cases of non-compliance would have incurred a penalty above £5,000 even on the new calculation of penalty arrears. Presumably it is to deter this 3 per cent in future that the Government have introduced the unlimited fine. How many times was the full £5,000 fine that the magistrates’ courts could levy under current legislation actually levied? If they are going to argue the need for an increased deterrent, presumably they have explored the full extent of their current powers. If not, it would seem more reasonable to assume that the lack of deterrent is a result of compliance officers not issuing penalty notices which were well within their power to levy, rather than the ability of offenders to avoid the Crown Court. I hope the Minister will provide some conclusive statistics showing that current penalties are stretched to the limit. If not, I fail to see what possible reason there can be for implementing this clause.