New Clause 1
Employment Bill [Lords]
2:30 pm
Stephen Crabb (Preseli Pembrokeshire, Conservative)
It is a pleasure to serve under your chairmanship, Mr. Caton. Obviously, I rise to speak to the new clause tabled by my hon. Friend the Member for Huntingdon, but I support the sentiment in the new clause tabled by the Liberal Democrats.
At the start of the Committee’s proceedings on Tuesday, the Minister referred to an article that he had read in the Sunday Mirror purporting to convey some foresight into what might be a future Conservative Government’s approach to the minimum wage. On behalf of the Conservatives, I should say that we are positive about the minimum wage. When discussing an amendment earlier this afternoon, my hon. Friend said that changes can occur in political parties. One change in our party is that we recognise that the minimum wage has been a good thing, and we want it to be properly enforced and to be effective.
We are also positive about the service industry. We recognise that we have a vibrant, successful service sector that is an increasingly important component of the economy, and we want that success to continue. Our new clause would support a successful and vibrant service-based economy, from the perspective of both employees and employers. From an employer’s perspective, our new clause would make a significant difference to many people working in cafÃ(c)s, restaurants or hairdressers. Let us take, for example, the case of a student working in a city centre restaurant, doing three shifts a week, six hours each shift, totalling 18 hours a week. That person might be paid the minimum wage rate of £5.73 an hour and can expect to take home £103.14. If they anticipate that they will receive £20 in tips per night, which is not unusual in a city centre restaurant, an extra £60 will bring their wage up to £163.14. By having a properly enforced minimum wage, £163 is far better than if they were receiving a wage below that level.
Let us compare that scenario to the one uncovered by The Independent on Sunday and reported on in May this year. It was about a leading Italian restaurant chain that employed its 300 members of staff at £3.75 an hour. There was a substantial difference in what those employees were taking home. The company said in its defence that it took care to maintain that the money that its employees received at the end of each week or month was equivalent to the minimum wage level, and that it bumped it up to ensure that its staff received at least the minimum wage. That defence was weak.
Many restaurant owners argue that that it creates an incentive for good performance on the part of their staff if they know that they need to work hard and put in a good performance just to bring their wage up to the minimum wage level. I do not buy that. A far more powerful incentive for employees in cafÃ(c)s, restaurants, hairdressers—or whatever the service-based scenario—is to be guaranteed a decent legal minimum wage at the end of each week, knowing that whatever tips, bonuses or gratuities they receive are in recognition of extra-good performance.
I am sure that I am not the only hon. Member who has experienced particularly bad service or an unhelpful, stroppy waiter or waitress, nor would I be the first to observe that we have a problem of patchy quality in our service sector. Guaranteeing a decent minimum wage for people in the service sector will help to raise their esteem and lead to overall gain for the industry and the British economy.