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Minimum wage move is welcome

What is that eerie silence?

It is the sound of the Westminster parties agreeing.

Employers who exploit workers by failing to pay the minimum wage are to face hair-raising fines. Penalties are to quadruple to a maximum of £20,000 per employee, when at present firms get away with one collective £5000 fine for all those workers they have underpaid. It is also to be made easier to name and shame the wrongdoers. That should give some unscrupulous bosses a few sleepless nights.

For this bold move the Coalition deserves credit. It is deeply unfair both on vulnerable workers and on firms that operate above board that some employers are routinely flouting minimum wage legislation. It is time they had a good scare: that alone should prompt some to clean up their act. To help the HMRC track down stubborn offenders, the Government must now ensure the service has adequate funding and staffing. It must also look again at ways employers get around the minimum wage. They may currently offset it against tied accommodation for workers, but given that sometimes such housing is overcrowded and substandard, that loophole is open to exploitation. The new penalties are welcome, but as well as enforcing the repayment of unpaid wages to staff, there is also a case for adding a proportion to compensate workers for their earlier mistreatment.

This move should hopefully take some of the heat out of the increasingly fractious debate on immigration. A charge often levelled rather unfairly at migrant workers is that they will work for less than the minimum wage, undercutting indigenous workers. Even though this is often because they are being exploited, it is a contentious issue.

The Labour leader, Ed Miliband, has said for some time that the answer is to enforce the minimum wage to create a level playing field, benefiting all low paid workers. Would that reduce European migration? The jury is out. If everyone were paid the same, only if British workers matched their Eastern European counterparts for skills and attitude would employers be likely to choose them. The important point is that creating a level playing field should benefit all workers, wherever they are from.

The Coalition will certainly see the move as stealing Mr Miliband's thunder and it is. The Labour leader can take comfort, however, from knowing that his attacks are finding their mark. The Coalition is vulnerable to talk of a cost- of-living crisis. The next political battleground will be the level of the minimum wage. Mr Miliband has been saying for months that Labour would raise it because it has failed to increase in line with the cost of living and is leaving many people struggling to make ends meet. Now that idea is gaining ground inside the Coalition, having been pushed by the Liberal Democrats. The Tories will certainly face opposition to a rise from business lobby groups, but raising the minimum wage is the right thing to do for households that are severely under pressure.

Setting and enforcing a fair minimum wage helps define the sort of country Britain is. All parties should be proud to do it.

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Local government

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