Dodgers of minimum wage face tax probe over wage dodge

THE GOVERNMENT yesterday declared war on employers who refuse to pay the minimum wage by insisting their confidential tax files will be opened to scrutiny.

The decision by Stephen Byers, Secretary of State for Trade and Industry, means only businesses operating in the black economy will be able to get round the legislation.

Ironically, the initiative simply means one set of officials in the Inland Revenue who police the pounds 3.60 minimum wage will have access to the files of another group of civil servants responsible for taxation.

But this will require a new law which the Government is tabling as an amendment to the Employment Relations Bill now going through the Lords.

Mr Byers told the annual conference of the Amalgamated Engineering and Electrical Union in Jersey that the decision would make a "huge" difference to the implementation of the law introduced on 1 April.

The Trade Secretary said the statutory minimum was operating "remarkably well" given the radical nature of the law. Mr Byers said the arrangement would mean a very significant toughening of the powers of inspectors..

The AEEU later passed a statement drawn up by its leadership which declared the union's belief in a legal floor to wages, and emphasised the need to set it at a level which took account of the impact on the economy. The union declared its disagreement with TUC policy that the minimum should be struck at half of male median earnings which some unions calculate at pounds 4.79 an hour.

John Monks, TUC general secretary, welcomed Mr Byers" initiative. "It was always ridiculous that the left hand of the Inland Revenue which enforced the minimum wage, could not talk to the right hand responsible for tax evasion," he said. "There should be no hiding place for minimum wage cheats."

In a speech, Sir Ken Jackson, general secretary of the AEEU, attacked critics who called for a return to Old Labour, sending a clear message to those who wanted to "hark back to a golden age that never was".

He said: "The more you carp from the sidelines the more you play into the hands of our opponents. The more you look to confrontation and conflict, the more you conspire in your own decline."