By Alex Appleby, reader at the Sunday Times
Critics of minimum wage laws describe them as an “attack on small businesses” while business leaders warn they harm the job market and “put small businesses out of business”. But the government’s own committee on economics and employment disputes this.
The Work and Pensions Select Committee made clear it believed workers should be paid at least the minimum wage – £7.50 per hour for over 18s in England and £6.50 per hour for over 21s – as part of a range of benefits.
It was also critical of the government’s delayed response to a freedom of information request into why those working for specific employers – such as sugar barons, multi-millionaires and private jet owners – do not get the minimum wage.
The committee said employees working for a financial services firm were struggling to get a job amid the Brexit vote, while the private jet industry was booming as new aircraft began entering the market.
The government has rejected calls to widen the definition of “dependent contractor” and bring them into line with workers on the minimum wage.
Ministers argue the definition of the classification – which was originally defined for seasonal fruit pickers – is necessary to protect businesses.
But the committee warned that current rules must be changed to change the game and allow the UK “to thrive in a global economy”.
They pointed to the uncertainty created by Brexit and the incoming General Election as major concerns for people working in the employment market.
The government’s failure to raise the minimum wage properly, they said, put them “at a disadvantage in a new economy”.
They said minimum wage workers should be paid benefits such as time off when they want, sick pay and protection for employees who suffer sexual harassment or bullying.
The committee said that, while a case can be made for cuts to the minimum wage, this needed to be the “most limited in order to avoid penalising small businesses”.
It said it wanted the government to publish a policy document stating its main objectives and an action plan to deal with them.
It added that the government should “strengthen, formalise and expand” the role of the Minimum Wage Board, which advises ministers.
The select committee said it would consider expanding the definitions of who is covered by the minimum wage and the benefits it provides if the government made its recommendations.