Editorial: The minimum wage must be enforced

With the central battle won, discussions now focus on the level at which the minimum wage should be set; witness the ructions over this year’s sub-inflationary rise
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For all the fulminations of the unthinking political right, it is increasingly difficult to argue credibly against the minimum wage.

Evidence from the decade-plus since its introduction by Tony Blair has put paid to the dire warnings of widespread job losses. And David Cameron publicly adopted the policy – often hailed as one of the most successful of any government in recent years – when he took over the leadership of the Conservative Party.

With the central battle won, discussions now focus on the level at which the minimum wage should be set; witness the recent ructions over this year’s sub-inflationary 1.9 per cent rise, a nod to the trying economic conditions. Meanwhile, the campaign for a higher “living wage” – sufficient to support a basic family life – is also gaining support across the spectrum. Alongside the principle that a full-time worker should earn enough to live, proponents also point out myriad other benefits. Staff stick around longer and are more productive, they say; and the state pays out less in tax credits, saving public money and ending the absurdity that sees taxpayers subsidising stingy or inefficient employers.

The debate on the matter of low pay is, rightly, far from over. There is another, altogether more immediate issue, however – and that is the extent to which some unscrupulous employers are dodging the existing rules.

The list of “scams” makes depressing reading. Some companies classify paid employees as volunteers, thus exempting them from the minimum wage; some charge for uniforms, say, or meals, eating into already low wages; some pay piece rates, or even simply lie about the hours worked. Such deceptions are not only shameful; they are illegal. They are also alarmingly widespread, particularly in, for example, the hospitality industry (where an arbitrary amount of tips can be counted as salary), and the social care sector (where carers are sometimes not paid for the travelling time between clients’ homes).

As things stand, then, Britain’s national minimum wage is rather an empty promise. Vince Cable is making the right noises at least. The Business Secretary says the Government is working on “tough new measures”. But he will need to do more than talk. Employee organisations have been warning of crooked operators sidestepping the law for almost as long as the minimum wage legislation has been in place. The Government has also launched previous crackdowns – not least the plan to “name and shame” offenders announced with great fanfare in 2010. Thanks to scant resources and minimal interest from ministers, though, little has been achieved and rampant exploitation at the low end of the income scale continues.

The situation is not only a moral blot on our wealthy and supposedly civilised society. With benefits now being squeezed, the Government is under more obligation than ever to ensure that laws protecting desperate and vulnerable workers are enforced. In fact, such enforcement must surely be a corollary of the much-vaunted effort to “make work pay”.

There are also any number of harmful practical consequences to consider. Not only do illegally low wages skew the labour market. They raise alarming quality implications, too – particularly in social care. Indeed, only this week, the relevant minister cautioned that “the next big scandal” will be in the care sector. With the appalling example of Mid Staffordshire NHS Trust still so fresh, such warnings cannot be easily ignored.

An effective campaign to name and shame offenders would be a start. But it must be accompanied by a hike in the fine levied on guilty parties and a concerted effort to bring prosecutions. The national minimum wage was a real step forward. But it is worth nothing unless it is enforced.