It is important that HMRC has the power effectively to investigate allegations that offences have been committed under the National Minimum Wage Act 1998, and particularly the more serious offences of systematically refusing or locally neglecting to pay the national minimum wage. As I have said several times on this group of clauses, we should remember that we have to deal with the fact that vulnerable workers are often reluctant to come forward.

The intention behind the clause, and the reason why we oppose the amendment suggested by the hon. Gentleman is that HMRC investigators are currently hampered in obtaining evidence of offences to the requisite standard, as we do not have the necessary powers on search and, to a lesser degree, the production of evidence. Investigators therefore have to rely on worker testimony to prosecute employers.

I have referred before to the Government’s vulnerable workers forum, which has been meeting over the past year. It has heard from representatives of business, trade unions, citizens advice, enforcement agencies and so on. Time and again we have heard of workers being reluctant to come forward because they fear that they could lose their jobs, albeit low-paid jobs, often leaving them with a marginal existence.

Based on investigations, we know that securing worker testimony can be difficult, as workers can face intimidation and threats, and sometimes the loss of employment. HMRC has been forced to abandon some potential prosecutions as a result of such factors. The hon. Gentleman asked how many. Between 2005 and 2007, HMRC identified 17 cases in which the lack of powers of the kind outlined in clause 12 hindered its investigations of non-payment of the minimum wage.

We cannot have it both ways. We cannot say that the enforcement effort to date has resulted in too few prosecutions and that it is not tough enough, and then say that we are not convinced that we need tougher powers. None the less, HMRC is able to identify cases in which, if it had had those powers, it believes that it could have gone further.