McDonnell: Tory “shame” over businesses which fail to pay minimum wage

John McDonnell today says a huge increase in the number of workers owed money because they have not been paid the national minimum wage (NMW) should  “bring shame” on George Osborne and the Conservative Government.

The shadow Chancellor spoke out after new figures showed the number of workers owed arrears from being illegally underpaid more than doubled to 58,000 in 2015-2016, compared to 26,000 in 2014-15.

The Conservative Government does not measure how many employers do not comply with minimum wage rules. The number of referrals coming from the national helpline has reduced by 42 per cent since last year, since the Government changed the administration of the line.

The report from the National Audit Office highlights social care as a specific area of concern. Up to 10.6 per cent of care workers may not be paid the NMW, resulting in the Low Pay Commission classifying the occupation as “high risk”.

McDonnell called on ministers to urgent investigate why workers were not reporting breaches through the national helpline, adding that Osborne should not have reduced staff at HMRC, cut union rights or attacked in-work benefits.

The report should “bring shame to George Osborne and this Tory Government who pretend to be on the side of working people”, McDonnell said.

“The further shocking figures that show such a large number of people, 313,000 people – the equivalent of a city the size of Cardiff, who are still owed £68 million due to breaches in the since 1999, suggests more still needs to be done to make sure that they get the pay owed to them.

“But alarm bells should also be going off at HMRC today following such a stark fall last year in the number of people not reporting breaches through the helpline since the government changed the operator. We need Treasury Ministers to urgently look into why this large drop off has happened.

“The problem is that it’s hard to truly believe that we have a Chancellor who really takes such matters seriously when he has spent his time in Government cutting the staffing numbers at HMRC, attacking trade union rights and cutting in-work benefits for the low paid.

The Conservatives’ “living wage” was introduced in April. Labour politicians have called the scheme a “cruel slight of hand” because most will be worse off following cuts in benefits and public services. It scheme has been followed by revelations many employers are cutting perks such as overtime pay and bonuses when introducing the scheme.