My Lords, I join both the noble Baroness, Lady Donaghy, and the noble Lord, Lord Stevenson, in offering my thanks to the Low Pay Commission. I had not realised that the noble Baroness was a founder member of it 20 years ago, and I offer congratulations on its 20th anniversary. Unlike her, I have never been lobbied by a Mother Superior from a Devon convent, but one looks forward to all new experiences in life. I will just say that I can imagine what it is like.
We are very grateful to the Low Pay Commission for the work it does. It is a good body that understands that it has to make difficult decisions in trying to come to the right figure for the different rates, representing the interests of those in work, those out of work, employers and the effect on employment. We are grateful to it for its advice.
The Government, as noble Lords will note, set an annual remit for it asking it to recommend the highest possible national minimum wage rates such that it does not increase unemployment. Again, we have that target, referred to in my opening marks and by the noble Lord, of getting to 60% of median earnings by 2020, subject to sustained economic growth. I hope we can do that; we are on track for it at the moment. As I made clear, my right honourable friend the Chancellor will set out further guidance in the Budget Statement
for life beyond 2020. The duty of the Low Pay Commission is to advise us. It is then for the Government to produce a figure and put it into the regulations. That is what we are debating today.
The noble Baroness, Lady Burt, asked about the difference between the national minimum wage and the national living wage. The latter is just another phrase for the statutory minimum wage that applies to those aged 25 or over. It was brought in in 2016 and we are aiming to get that statutory minimum wage to that 60%. She asked why we could not follow what the Living Wage Foundation suggested. It is possibly better to follow the advice of the body that we have sought advice from—the Low Pay Commission—rather than another external body. I believe that setting the national living wage too high or increasing it too quickly could in the end lead to higher unemployment and harm the very people whom the policy is intended to help. That is why we look to the Low Pay Commission to set those rates; it will draw on economic, labour market and pay analysis, independent research and stakeholder evidence, as well as its own experience from trade unionists, business representatives and economists. I commend the work of the Living Wage Foundation, but the key distinction of the rates recommended by the LPC is that that body has to consider the impact on business.
The noble Baroness also asked about levels of non-compliance and about how many were underpaying. In 2017, 1,000 businesses were found by HMRC to have underpaid the national minimum wage. The cases resulted in £15 million of pay arrears being identified for more than 200,000 workers. There have been 14 successful prosecutions since 2007, but the important thing is to identify the businesses that are non-compliant and get them to comply. She also asked about the percentages of public sector workers receiving the living wage. I will write to her with any exact figures on that.
Finally, the noble Lord, Lord Stevenson, asked about the large increase in the accommodation off-set. The LPC seeks to raise the accommodation off-set to reach the level of the 21 to 24 year-old rate. A high rate for the off-set better reflects the cost of provision and enables investment in higher standards of accommodation by business. I hope that that deals with that point.
I think that that covers all the points that have been raised. I beg to move.