Low Pay

Opposition Day – in the House of Commons at 3:44 pm on 15th February 1984.

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Photo of Mr John Smith Mr John Smith , Monklands East 3:54 pm, 15th February 1984

I beg to move, That this House deplores the poverty, injustice and discrimination caused by low pay; condemns the Government for deliberately fostering low levels of pay; and calls upon Her Majesty's Government to abandon its threat to abolish Wages Councils.

In the House we frequently and rightly debate the problems of unemployment and the misery, distress and diminution of life opportunity which afflict the standing army of unemployed. So we should. However, it is not to diminish one iota of our concern for the millions of our fellow citizens who are unemployed to say that unemployment is not the only social evil of contemporary Britain. Today the Opposition seek to place firmly on the agenda of debate in the House and in the nation the serious and growing problem of low pay—the problems of the millions of our fellow citizens who are paid less than is necessary to maintain what the Council of Europe has called a decency threshold.

Low pay is traditionally defined either as a problem of subsistence or in relation to other wage levels. From the subsistence point of view, a good proxy for an official poverty line of earnings would be a wage necessary to leave the wage earner with an income equivalent to supplementary benefit levels. In 1983–84 a family of four would need to have gross weekly earnings of £105·45 in order to take home an income equivalent to the supplementary benefit entitlement. The same family would be eligible to claim family income supplement to top up its wages on an income of less than £95 a week:.

Viewing low pay from the relativity standpoint, the National Board for Prices and Incomes and the Royal Commission on the distribution of income and wealth defined low pay as the lowest decile—the lowest 10 per cent.—of the manual male wage. In other words, 90 per cent. of male manual workers would have wages above that level. In 1983–84, the figure for the lowest decile is £91·30 weekly.

If we accept the TUC's low pay target of two thirds Of average male manual earnings, we reach a figure of £95·73; and if we take it as two thirds of the medium male earnings, it is £100·20. If we take an international standard, the Council of Europe specified a decency threshold for wages equivalent to 68 per cent. of average adult earnings. In 1983–84 that definition would give us a figure of £101·25.

Although each of those approaches is different and international, they all arrive, whether viewed from the poverty standpoint or from the relativity standpoint, at a figure not far below £100 a week. On that standard, the dimensions of the low pay problem in our society are staggering. According to the new earnings survey of the Department of Employment for April 1983, 3·5 million adult full-time workers—two-thirds of them women— are earning low wages for a full working week, including overtime. If overtime is excluded, 4 million full-time adult workers could be classified as low paid.

The survey also shows that more than 3 million part-time adult workers earned a low hourly wage in 1983, and more than half of all the part-time workers in Britain are included in that. Therefore, it is clear that the earnings of almost 7 million adult workers—nearly one third of the adult work force in Britain—fell below the Council of Europe's decency threshold for wages.

Photo of Dennis Skinner Dennis Skinner Member, Labour Party National Executive Committee

Is my right hon. and learned Friend aware that as a result of the current overtime ban in the mining industry, which has lasted for about 16 weeks, it has become apparent to most miners—some might not have been aware of it previously—that, because there is no overtime, a substantial minority of NUM employees now earn less than the figure that he described, and a great majority of the pit head workers earn less than that? It is worth noting, when one hears about highly paid miners, that, in effect, a large percentage of them now earn less than the figure that he quoted.

Photo of Mr John Smith Mr John Smith , Monklands East

If my hon. Friend examines the new earnings survey, he will find that the lowest wage for a miner is very close to the minimum wage for the average working week. My hon. Friend's intervention shows that low wages in this country are disguised by perpetually worked overtime, and that if it was not for overtime and women working there would be more poverty among people in full-time work.

We assert that a problem of such dimensions is a major cause of poverty and injustice in our society. We know that the low paid are now the largest group among the non-pension poor. In 1981, 680,000 people were living on an income below the supplementary benefit level, although they were in families with at least one wage earner. One quarter of those living in poverty—that is, people living below the supplementary benefit level—and over two fifths of those on the margins of poverty — that is, people with an income at supplementary benefit level and up to 40 per cent. above it—were dependent on an income from full-time work. In all, more than 3·75 million people—one tenth of all those in working families—were in poverty or on its margins.

We cannot dismiss that simply as a problem of working wives. If it were not for the earnings of married women, four times as many families would have incomes below the poverty line. In 400,000 families, the wife is the sole breadwinner, due to her husband's unemployment. More than one in 10 families in Britain are single-parent families headed by a woman, a working woman. Altogether, in one quarter of all households in Britain today, the main or sole breadwinner is a woman.

It is a problem of injustice—not just because of the diminution of life opportunities which low pay imposes on all those who are affected by it. It is also an injustice and a major source of discrimination, because the four groups in our society most afflicted by low pay are manual workers, women, young people and ethnic minorities.

Moreover, it is a worsening problem. In 1979, one tenth of male manual workers were low paid. By 1983,. The proportion was one in six. Two thirds of manual working women were low paid in 1979. Now the figure is three quarters. That rapid increase in the dimensions of the problem has been caused by the deliberate policies of the Government, and justifies our condemnation of them, as we say in our motion, for deliberately fostering low levels of pay".

Although the numbers of low-paid workers have been increasing, the Government have continued to argue that people are pricing themselves out of jobs. Government policy is directed — and increasingly directed — at lowering wages, with the so-called aim of job creation through low pay. We know already the depressive effects of unemployment itself — the use of the fear of redundancy as a political weapon to curb the ambitions of the poorly paid.

That has been reinforced by the Government's attacks on the wages councils, by the effects of abandoning the fair wages resolution and repealing schedule 11 of the Employment Protection Act 1975, by the effects of privatisation, and by the driving down of young people's wages through YTS allowances and the young workers scheme.

I shall start with the wages councils. They were first established by Winston Churchill as trades boards almost three quarters of a century ago, in 1909. Since then, they have sought to set legally enforceable minimum rates of pay in low paying industries where workers were particularly vulnerable — what were once called "the sweated trades". In their justification, and the justification for their past and present existence, I can do no better than quote the words of Winston Churchill when he introduced the concept. He said: It is a serious national evil that any class of His Majesty's subjects should receive less than a living wage in return for their utmost exertions. It was formerly supposed that the working of the laws of supply and demand would naturally regulate or eliminate that evil … But where you have … no organisation, no parity of bargaining, the good employer is undercut by the bad, and the bad employer is undercut by the worst … Where those conditions prevail you have not a condition of progress, but a condition of progressive degeneration … the degeneration will continue, and there is no reason why it should not continue in a sort of squalid welter for a period which compared with our brief lives is indefinite." —[Official Report, 28 April 1909; Vol. IV, c. 388.] I can do no better than commend that thought to the modern Conservative party, which has turned its back even on policies that were pursued by Conservative Governments during the 1930s.

Wages councils have remained part of the scene of this country ever since they were introduced in 1909. Now this Government, going even further than the hard-faced Governments of the inter-war years, are set to abolish them and renounce our international obligations under the International Labour Organisation. In the meantime —they cannot renounce them until they give notice to the ILO on a specified date—they are busy undermining the wages councils. The number of inspectors to police the wages councils legislation has been cut by more than one third since this Government came to office. Not unnaturally, the number of inspections has gone down, and the number of prosecutions following those inspections has gone down.

We know that illegal underpayment by employers has substantially increased. We know, too, that the Government themselves have withdrawn information about the minimum rates, with the result that even in their own jobcentres—this was recently proved in the west midlands—they often advertise jobs with illegally low pay. So much for the rule of law that we heard so much about only a few months ago. What respect is there for the rule of law when the legislation that Parliament has passed for the protection of some of our most impoverished citizens is deliberately undermined?

Why are the Government against the wage councils? The Foreign Secretary—whose concern for working people is well known—says that they price people out of jobs.

I realise that there has been substantial criticism to the effect that wages councils have not been effective enough as protectors of the low paid. There is some substance in that criticism. We hoped that the wages council system would achieve better pay and conditions for our people than has been achieved during their existence. I argue that we should seek new ways of strengthening them, making them more effective and getting the minimum wages increased. To argue that people paid at wages council levels in hairdressing shops and garment factories are pricing themselves out of a job is simply laughable. It is about as risible as the Foreign Secretary's comments about the GCHQ dispute.

That is the conclusion reached by a group of Cambridge economists, whom the Government specifically asked to look at the matter. They were asked to look at the effects of abolishing the wages councils, and I shall quote from their conclusions. They said that there was no evidence of direct benefit from the abolition of wages councils. We found no evidence of any increase in economic efficiency, of any increase in total numbers of jobs in the industry and yet, at the same time, there was significant evidence of an extension of low pay". The Government's plan to undermine wages councils and then abolish them is to drive low levels of pay even lower and to make unprotected workers even more unprotected.

There is a parallel in the abandonment of the fair wages resolution of this House, which was revoked in the last Parliament, and of schedule 11 of the Employment Protection Act 1975, which was repealed in the last Parliament. Both those protections for fair wages—to stop wage undercutting to the prejudice of low-paid workers — were removed by the Government in the course of that Parliament. The fair wages resolution had stood for many years. It was commended by a series of Conservative Governments before the political ice age descended in 1979. It was supported by successive Governments, and by both employers and trade unions. Good employers did not want the wages that they paid to be undercut by bad employers and other competition in wage cutting. Moreover, it was part of an international obligation, but the Government renounced it.

Those protections, like the wages councils, were thrown away. We now know why the fair wages resolution and schedule 11 to the Employment Protection Act were thrown away. It was to facilitate the privatisation of public services in this country and to let loose a spiral of destructive wage undercutting that would cut down the costs of providing ancillary services through the private sector.

Private firms tendering for public services such as cleaning schools or doing ancillary health work cut their costs by cutting workers' wages. After being sacked from the public sector, people are re-employed by private sector firms at deliberately lower pay. Cowboy competition is let loose as firms which want to pay fair wages are undermined by more ruthless competitors. Lower pay will lead inevitably to lower standards all round and throughout the public service.

The most direct of the Government's wage-cutting schemes is the young workers scheme under which for the first time in this country employers are subsidised to encourage them to pay low wages to young workers. Believe it or not, employers receive a subsidy of £15 a week if they employ young people at below £42 a week. They get a subsidy of £7·50 a week if they are generous enough to increase the wage to £47 a week.

Evidence to the Public Accounts Committee shows that 77 per cent. of the jobs under the young workers scheme would have existed anyway, at higher rates of pay, and that few new jobs have been created. Less than 10 per cent. of all subsidised jobs can be classified as new. That means that the Exchequer pays £5,355 for each new job with deliberately low pay.

The Government's determination to keep the YTS allowance down to £25 is part of their low-wage strategy. The Manpower Services Commission has recommended regular updating of the YTS allowance, but of course that has not been done. If the updating had taken place, the allowance would now be between £34 and £38 a week.

The Government have a deliberate policy to keep the allowance low so that it has a lowering effect on the wages of young people in work. The employer can say, "You would get only £25 under the YTS scheme, so you will not get any more from me." The Government seem to have a particular way of ensuring that young people are particularly badly paid.

I have described deliberate acts of the Government. They cannot claim that the increase in the incidence of low pay is inevitable and cannot be avoided. I have established beyond doubt that the Government have done little other than foster low pay by deliberate policies.

What is the Government's defence? It is in the amendment to the motion— that the most important step towards any improvement in pay levels is by a general improvement in the economy". I suppose that we might agree with that. It would be helpful to have an improvement in the economy. The amendment then asks us to welcome the encouraging signs of economic recovery". I confess that those signs escape me since there has been an increase in unemployment of 120,000 in the past week or two. I find it hard to find a place in my imagination, let alone in my sight, for encouraging signs of economic recovery.

The amendment refers to "the improvement in training". We shall have to see about that. I welcome any steps taken to improve training, as far as they go, although I do not like the connection between training and very low remuneration. I shall not criticise the Government too much for that. The amendment refers to "the increase in productivity". Of course there will be some increase in productivity if employment is drastically cut. In some institutions there will be a bogus increase in productivity for a short time, but there will be no long-lasting or real improvements in productivity. We have experienced the short-term variety, if any, recently.

The amendment also says that there has been a "reduction in inflation". Inflation is at about 5 per cent., but the Government have completely abandoned all other objectives to keep inflation low. Part of the price of keeping inflation at 5 per cent. is 3 million unemployed. That is too high a price for that economic objective.

I draw the attention of the House to the concluding part of the Government amendment, which says that the House should recognise. that the number of people who have a job will depend directly on the levels of pay received by those in work.

That is the most gobbledegook of defences of Government policy that I have heard for a long time. There is no reference to the direct connection between investment levels and those in work, between the general management of the economy and those in work or between the level of demand in the economy and those in work. According to the Government, the only connection is between the wage levels of those at work and the level of unemployment. That is another piece of evasion by a Government who continually evade their responsibility and are always transferring responsibility to some convenient scapegoat. The whole responsibility for increasing employment is removed from the Government and placed on the shoulders of those at work and, in the context of the motion, on the shoulders of the poorly paid. The notion of shuffling off the responsibility of promoting full employment from the elected Government on to low-paid workers is shocking and lamentable.

I do not believe that a general cut in wages will lead to more jobs. If no jobs are available, it will not help if everyone takes a 10 per cent. cut in wages. Recent bogus studies by the Department of Employment which try to show that young workers price themselves out of jobs is not justified by the evidence. There is no proof that cuts in wages lead to more jobs. Indeed, that assertion reveals the confused state of Government economic policy which now appears to be, "Keep wages low and we will recover."

Low demand will generally keep economic activity low. If we want an expanding, efficient economy we should go for targets of efficiency and productivity which, as we know from competitor countries, are associated more frequently with higher wages than with lower wages.

An amendment has been tabled by the Liberal and Social Democratic parties. It was tabled with less than total enthusiasm since only one SDP Member and one Liberal Member are here to support it. They are always telling us that they do not have sufficient opportunity to take part in such debates. I am sure that they will have the opportunity today.

The alliance amendment states that we should take immediate action to tackle poverty by integrating the tax and social security systems and by introducing a basic benefit to reduce the number of existing benefits. It would be wrong to seek to solve the low-pay problem within the context of social policy, as if low pay and the poverty that accompanies it can be solved only by the social security system. That was the justification for the family income supplement. It is the justification for a Government who pay their own employees in the Civil Service, particularly in the manual grades, very low wages. When workers complain, the Government say, "You can come and collect your family income supplement." The Government refuse to increase pay, but say that workers can have the increase by claiming family income supplement. What the Government refuse to put in the pay packet they hand over the social security counter.

The family income supplement carries a stigma so serious that only half of those entitled to apply do so. People do not want to admit that they are poorly paid and ask for a supplement from the social security system. They want a fair day's wage for a fair day's work. That is what they should get. That is consistent with human dignity.

Photo of Mr Ian Wrigglesworth Mr Ian Wrigglesworth , Stockton South

The right hon. and learned Gentleman's comments reveal a lack of understanding of the proposals in our amendment. I suggest that he looks further at the proposals because they are designed to deal with his criticism of the low take-up of benefits. Does he recognise also that our amendment proposes to make an addition to the motion and that we, like he and his hon. Friends, oppose the abolition of the wages councils and the other aspects mentioned in the motion?

Photo of Mr John Smith Mr John Smith , Monklands East

I am glad to know that there is at least some wisdom in the hon. Gentleman's thinking and that he accepts our motion. When he leads us into a discussion of social security benefits, there is a serious danger of attempting to get rid of the problem of low pay in the context of social security. That is the error into which the hon. Gentleman may fall. He is hinting at a so-called negative income tax system. I do not believe that many hon. Members would come into that category. [Interruption.] It might assist us if the hon. Member for Stockton, South (Mr. Wrigglesworth) were to pay some attention when I am seeking to answer his question. We should not ask the taxpayer to subsidise low-wage employers in order to bring the wages of their employees up to a reasonable level. Why on earth should the rest of the community be asked to bail out the low-wage paying employer who is not prepared to discharge his responsibilities? Why should low-paid workers, who should be paid decent wages for their work, be forced to go to social security offices to obtain a supplement to their wages? Why should the responsibility be shuffled off the backs of those employers on to taxpayers?

Photo of Mr Ralph Howell Mr Ralph Howell , North Norfolk

Why has the Labour party never taken on the idea of a minimum wage?

Photo of Mr John Smith Mr John Smith , Monklands East

I proposed to deal with that point a little later, but I shall deal with it now. An important debate has started within the trade union movement and the Labour party about moving towards the adoption, I hope, of minimum wage provision. I do not disguise the fact that some problems must be overcome. [Interruption.] It will not help our discussions if idle-minded Conservative Members snigger. They are not prepared to face any of these problems.

We are near the start of a new Parliament. We must face serious social and economic problems. The Labour party is thinking seriously and radically about solutions. We will be open and honest in the way that we discuss those problems. We shall cause those problems to be discussed in the House in debates such as this. [Interruption.] If the hon. Member for Stockton, South stopped bleating so much and listened patiently, he would learn something to his benefit. We would all be assisted if he could control himself a little more. He usually has a better chance to speak in these debates than many Labour Members.

I believe that we shall move towards a policy of adopting a national minimum wage, but it must be thoroughly discussed and analysed and proper proposals must be put forward. As a first step, before we have the opportunity—this may be a little time from now—of implementing our policies from the Government Front Bench, we should reverse the recent regressive steps taken by the Government. Instead of seeking to abolish the wages councils, we should be strengthening and reinforcing them so that they act effectively in accordance with the law to protect low-paid workers. We should restore the fair wages resolution, which stood for decades through Government after Government, as a badge of the determination of the House that fair wages should be enforced. We should reintroduce schedule 11 to the Employment Protection Act, which allows low-paid workers the right to complain about poor comparability with others. The Government should show an example to their employees and abandon a policy of paying their employees wages below the levels which the Government say are insufficient properly to maintain a household. The Government should end the farce of paying wages partly in the pay packet and partly over the social security counter.

I hope that the motion will start a serious debate about a serious problem. We believe that we have some of the answers to the problem, but we do not know confidently that we have all the answers. The Labour party cares deeply about the problems of low-paid people. That is one reason why the Labour party was brought into existence. Whoever fights or does not fight for the rights and cause of those people, the Labour party will always be in the forefront of the campaign against low pay.

Photo of John Gummer John Gummer Minister of State (Department of Employment), Party Chair, Conservative Party 4:25 pm, 15th February 1984

I beg to move, to leave out from "House" to the end of the Question and to add instead thereof: believes that the most important step towards any improvement in pay levels is by a general improvement in the economy; therefore welcomes the encouraging signs of economic recovery, the improvement in training, the increase in productivity and the reduction in inflation; and recognises that the number of people who have a job will depend directly on the levels of pay received by those in work.". I welcome the motion moved by the right hon. and learned Member for Monklands, East (Mr. Smith) which gives us the opportunity to discuss low pay. He was right to make those points in his penultimate paragraph. We are not discussing a subject that can be written off by a series of slogans of any kind. I hope that both sides of the House are concerned to find answers rather than merely pose problems.

In our comparatively prosperous society, the relative disadvantage of lower paid workers is highly visible to them and to others. It is no good constantly pointing to the considerable improvement in real pay of those workers since the second world war because there is still the clear awareness of relative disadvantage. It is true that 50 years ago the low levels of real pay meant physical distress and grinding poverty of a type that no longer is the case. Nevertheless, that is small comfort—

Photo of John Gummer John Gummer Minister of State (Department of Employment), Party Chair, Conservative Party

It is not the same type of grinding poverty. If the hon. Gentleman will allow me to finish the sentence, he will find that we are not far apart in the analysis of the problem, and that we can discuss our answers to the problem. That is the issue we are here to discuss.

That small comfort is not very great for a worker on low income, even if he can house, clothe and feed those for whom he is responsible, if he cannot provide them with the standard of living to which he and they aspire and which he sees his neighbours enjoying. Those who pretend that we can provide a definition of low pay or of poverty unconnected with the general standard of living seem to be entirely missing the point. Such people cannot suggest that, because 100 years ago certain domestic necessities of life, such as the bathroom, were not available to anyone, that is still the case today. We must be careful, before we dismiss the correct view of all types of organisations whose work has been mentioned today., to remember that the question with which we are dealing is largely one of comparison. I hope that the House will agree, from the beginning of the debate, that none of us has a monopoly on compassion. Both sides of the House are equally concerned. We agree on the problem. We differ in how that problem can be tackled.

It is notable that the original motion—

Photo of John Gummer John Gummer Minister of State (Department of Employment), Party Chair, Conservative Party

The hon. Gentleman would get further in discussing these issues if he started by accepting the sincerity of both sides of the House and arguing about the answers afterwards.

It is notable that the original motion is strong on deploring and condemning but extremely weak on proposing solutions. The motion fails to relate the problems to general economic conditions and thereby fails even to suggest answers.

I agree that the right hon. and learned Member for Monklands, East made a number of proposals, and l hope to come to them, but the motion is about condemnation and does not contain any answers. I shall proceed shortly to discuss how justified that is.

Photo of John Gummer John Gummer Minister of State (Department of Employment), Party Chair, Conservative Party

I should like to get into my speech and then I would be willing to give way to the hon. Gentleman. When that time comes, I shall look forward to his contribution.

If low pay is defined in relative terms, no matter how much we increase the standards of living for all our people, there will always be the low pay issue. The Government have therefore proposed an amendment to the motion because we believe that low pay deserves to be addressed in a constructive way. If we are to improve the position, we must improve low pay in absolute terms. That, inevitably, means that we must improve the country's economic performance. It is surely self-evident that the level of real pay in this country, or elsewhere, depends upon what we can produce and sell. Real pay can be improved only by improving our economic performance. There are no easy solutions. Legislation, incomes policies and printing money do not produce real wealth. That may not be palatable for the Opposition, and it may not be novel, but it happens to be true that to increase real earnings and to improve job prospects we must keep inflation down, improve productivity and sharpen our competitiveness. There is no short cut. Those who say that there is are conning themselves and the most vulnerable people in our society. That is the issue between us.

When people talk about compassion but offer solutions that will make the low-paid less well off and create greater inflation, they are only holding out false hopes. Conservative Members say that that is false compassion.

Photo of Dennis Skinner Dennis Skinner Member, Labour Party National Executive Committee

How can the Minister talk about sincerity and compassion when his hon. Friend the Member for Derbyshire, West (Mr. Parris) tries a week on supplementary benefit and finds that he cannot manage towards the end of the week? The hon. Member is not here today. Although there are low pay levels, the Government are threatening the wages councils while the Minister picks up another £5,000 to stuff in his back pocket without doing an extra day's work for it.

Photo of John Gummer John Gummer Minister of State (Department of Employment), Party Chair, Conservative Party

I rather expected most of what the hon. Gentleman said. He has supported every inflationary wage settlement since he has been in politics. Through his support, he is responsible for a great deal of low pay. If the hon. Gentleman had the sincerity that he professes, he would support the idea that those people who can force their position on to others should hold back and allow lower paid workers to take rather more of the available money. When those groups of workers are prepared to do that, and he supports it, we shall take him seriously.

Those who believe in a minimum wage and constantly want to raise the lower wage levels are normally, with the honourable exception of the hon. Member for Birkenhead (Mr. Field), not those who carry the logic through to the idea of a maximum wage level. The only argument that can advance the idea of an effective floor is one that provides for a ceiling as well. We shall come to the argument against that. The hon. Member for Bolsover (Mr. Skinner) does not put that case forward and until he is prepared to do so we cannot take him seriously.

We must improve our competitiveness if we are to—[Interruption.] Is it not interesting that Opposition Members do not like that fact when it is mentioned because, as it is true, it is difficult for them to argue against it. It is not the simple shorthand answer, but it is the answer that comes from real compassion and it would be honourable to say that it is the only way in which we can solve our problems.

We entered the world recession after a period in which our cost competitiveness had been heavily eroded by vast increases in money wages — [Interruption.] I do not know how the hon. Gentleman can interrupt when he has not been quiet enough to listen to what I have said. Those increases had been unsupported by the necessary increases in productivity. Money wages had been taking an increasing share of national income at the expense of profits and, therefore, of investment for the future.

Over the past two years, because the Government have been carrying out their economic policy, our economic performance has greatly improved. The right hon. and learned Member for Monklands, East spoke disparagingly about bringing inflation down to 5 per cent. and probably towards 4·5 per cent. My goodness, when his Government were in power would they not have loved to have been able to say that, because they know that bringing inflation down is the first prerequisite to improving living standards.

Photo of Mr Dale Campbell-Savours Mr Dale Campbell-Savours , Workington

Coming to the subject of competitiveness and inter regional competitiveness, the "Regional Industrial Development" White Paper published by the Government before Christmas refers to wages being a component of regional policy. To what extent will wages policy affect the Government's decision on the allocation of industrial aid?

Photo of John Gummer John Gummer Minister of State (Department of Employment), Party Chair, Conservative Party

The hon. Gentleman knows perfectly well that that was part of the request for discussion, and the advice is that wages policies do not have that effect. That is why the wording is in italics in the document. If he had read it more carefully he would have seen that. That is why the document was written in that way.

Photo of John Gummer John Gummer Minister of State (Department of Employment), Party Chair, Conservative Party

If one allows one's inflation to increase higher than that of one's competitors, and one's goods become more expensive than theirs, it is not just more difficult to sell those goods but it becomes impossible to protect the jobs of the people who produce them. That is why inflation has a direct effect on jobs and wages.

Photo of Mr Nicholas Budgen Mr Nicholas Budgen , Wolverhampton South West

My hon. Friend talked about inflationary wage increases and seemed to be connecting wage levels with the level of inflation. Is it still his view that inflation is caused by wage levels?

Photo of John Gummer John Gummer Minister of State (Department of Employment), Party Chair, Conservative Party

I know that my hon. Friend takes the view that there is no connection between wages and inflation. He is well aware that I do not take that view, which is why he interrupted me to ask that question. I shall repeat to him that I do not agree with him; I have not agreed with him, and I am not going to change my mind in the middle of this debate. The connection is simple. If that part of the cost of goods caused by wages is higher here than in other countries, people are more likely to buy those other countries' goods rather than ours. My hon. Friend the Member for Wolverhampton, South-West (Mr. Budgen) asked me to discuss the details of the connection between wages and inflation.—[Interruption.] We are not discussing the circulation of money; we are discussing the effect of wages upon inflation. Wages that are not earned by productivity increase inflation. If the hon. Member for Bolsover does not agree with that, he agrees with my hon. Friend the Member for Wolverhampton, South-West. It is the first time that they have agreed, and I am pleased to bring both sides of the House together so effectively.

We have reduced inflation and increased profits. Opposition Members used to make noises when that was said, so I shall say it again. We have increased profits. That is good, because investment will come only from profits.

The CBI is now forecasting a net real rate of return of 7·5 per cent. for 1984 compared with an estimated 4·5 per cent. for 1982. That is a major and important increase for the advancement of the economy.

Photo of John Gummer John Gummer Minister of State (Department of Employment), Party Chair, Conservative Party

The CBI believes me because those are its figures. It is interesting to note the Pavlovian reaction when the CBI is mentioned, and yet a large number of our jobs depend upon the CBI. The CBI produces a great many more jobs than the hon. Member ever has. He is in no position to attack the CBI.

The third element, which is the good news, of which the right hon. and learned Gentleman told me there was none, is that investment is picking up. A rate of return of 7½ per cent. in real terms in manufacturing investment in 1984 is now expected by the CBI. Our cost competitiveness in manufacturing has improved by about 20 per cent. since 1981. Although the fact has escaped the notice of the Opposition, not only by the country's internal measures, but by the measures of those outside the country, the situation is improving considerably, and, with that improvement, we can do a great deal more for those on low pay.

Photo of Mr John Smith Mr John Smith , Monklands East

I am grateful to the Minister for giving way. If it is true, as he asserts, that profits are up throughout British industry, why is it necessary to deprive workers of protection? Will these well-doing employers whose profits are up not be able to pay the wages that a wages council insists, instead of the Government driving them down?

Photo of John Gummer John Gummer Minister of State (Department of Employment), Party Chair, Conservative Party

I assure the right hon. and learned Gentleman that I shall deal with wages councils in great detail, and shall give way to him, if he so wishes. I will make the situation absolutely clear, I shall not duck the question, but will deal with it when I deal with wages councils.

However, there is still a great deal of lost ground to make up, and it is on this that I wish to address my remarks to the right hon. and learned Gentleman. Those recent signs of the improvement in competitiveness that has been achieved since 1981 are not being maintained. In the year to the third quarter of 1983, unit wage costs in manufacturing industry in the country rose by 3 per cent. That was better than the 12 per cent. increase for one sector—engineering—in France, but unit costs in Japan did not rise. In the United States of America and in West Germany, they actually fell by 2 per cent. That is a serious fact for the future of jobs, and for wages in the country. It means that our competitors are able to produce goods more cheaply than we can in world markets, and that cannot but be harmful to our people. Our manufacturing earnings—

Photo of John Gummer John Gummer Minister of State (Department of Employment), Party Chair, Conservative Party

I shall not give way. I wish to answer the point made by the hon. Member for Bolsover (Mr. Skinner). He referred to my grandmother. I wish that he had a grandmother as sensible as mine. My grandmother would have told him that the only answer to low pay is to improve the general profitability and the general standard of living of the whole country.

Our manufacturing earnings are increasing faster than those of our main competitors. Looking again at the year to the third quarter of 1983, not only unit wage costs give cause for concern. Average earnings in manufacturing industry in this country rose by about 9 per cent. That is a little better than France which was 10 per cent., but it is very much higher than the 3 per cent. increase in the United States and in West Germany, and the 2 per cent. increase in Japan.

The increase in our manufacturing earnings is partly accounted for by less short-time working—hours lost are running at the lowest level for four years—by more overtime, which is at the highest level since August 1980, and by higher bonus payments. That is to be welcomed. That all reflects the growth in the economy, but some of the increase simply reflects the current level of pay settlements. Those pay settlements are, therefore, too high for our prospects. We must further reduce the level of settlements in manufacturing and other parts of industry.

There has been a welcome return to economic reality over pay bargaining in the last few years. In the disastrous 1979–80 pay round, settlements were averaging nearly 20 per cent. across the economy. The previous Administration's failed incomes policy chickens came home to roost, including the famous comparability commission's post-dated awards for the public services. By 1980–81 we were down to 8·5 per cent. In 1981–82 the figure was 7 per cent, and in 1982–83 it was about 5·5 per cent. There is some indication that that will fall further, but it is falling only a little, which is not sufficient to maintain, let alone improve, our present cost performance compared with those of the country's main overseas competitors. Unless we are viable to maintain our competitiveness with the rest of the world, we shall be unable to maintain even the present level of jobs. The Opposition must accept that—

Photo of John Gummer John Gummer Minister of State (Department of Employment), Party Chair, Conservative Party

Irrespective of the exchange rate, if the position on settlements is made worse, that makes the overall position worse. The suggestion is that to the problems of the exchange rate must be added the extra problem of higher costs compared with those of our competitors.

Photo of John Gummer John Gummer Minister of State (Department of Employment), Party Chair, Conservative Party

I shall finish the point, Mr. Deputy Speaker, and then I shall give way to my hon. Friend.

It is important that the fruits of the recovery in the economy are not squandered on excessive pay settlements, with the prospects for further improvements thereby weakened. It is all right for Opposition Members to find it amusing to object to this, but the fact remains that, if we price ourselves out of markets at home and abroad, we shall have fewer jobs, and the wages of people in jobs will be severely affected.

Photo of Mr Nicholas Budgen Mr Nicholas Budgen , Wolverhampton South West

Since my hon. Friend is saying a great deal about competitiveness, will he explain the role of the exchange rate in deciding, or ameliorating, uncompetitive-ness? When dealing with the exchange rate, will he say what his policy is for exchange rates, and whether his Department has a view about holding them up or anything of that kind?

Photo of John Gummer John Gummer Minister of State (Department of Employment), Party Chair, Conservative Party

I am sure that my hon. Friend came into the Chamber on time, and that he will realise that the House is debating low pay. In debating low pay, we are concerned with wages also. The question that I put to my hon. Friend is a simple one. We are arguing about whether we should add problems of the exchange rate to the problems that are caused by excessive wage demands. If my hon. Friend wishes to discuss the question of exchange rates, there are many opportunities in the House to do so. However, this does not avoid the real issue, namely, why should one add to those problems the problems that arise from excessive wage rates?

Low pay is, and must be, linked with lack of skills. That is why the Government have brought training to the top of the list of priorities. It is interesting that the Opposition have made no mention in the motion of training. They have not thought it worthwhile even to attack the Government's training record. The word "training" does not appear. If Opposition Members can talk about low pay without talking about training, it shows that they do not know much about the reason for low pay. One of the reasons for it is a lack of skills to sell. Unless those skills can be improved, and there is training towards such improvement, pay cannot be increased. The most remarkable fact about the motion is that the Opposition purport to deal with low pay without any reference to training.

The fundamental characteristic common to almost all cases of low pay is the relatively low degree of skill that individuals have to offer. Training must, therefore, play a crucial part in enabling individuals to earn more. That has always been true, but it is the more so when rapid technological change reduces the traditional opportunities for the unskilled. If we are to meet the needs of the low paid, we must ensure the improvement and extension of training opportunities to which the Government are committed. Therefore, it is not unreasonable for impartial onlookers to ask themselves whether the Opposition are serious about low pay when the motion contains not one word about training, about skill improvement, or about the needs of the young who have less than adequate educational qualification. That is why the Government amendment specifically raises the question of training, and that is why my hon. Friend the Minister of State responsible for the Manpower Services Commission will be winding up the debate.

The Government's recent White Paper sets out what we have achieved, and how far there is still to go. The new youth training scheme launched last year to provide school leavers with basic training for work is proving itself to be a great success, despite the opposition of Opposition Members.

Photo of John Gummer John Gummer Minister of State (Department of Employment), Party Chair, Conservative Party

The hon. Lady says that it is untrue. I suggest that the hon. Lady talks to those who are on training schemes; and she should be ashamed at the way she has stopped people getting on to youth training schemes. The record of the hon. Lady in this matter is disgraceful. Training for work is proving itself to be a great success. The guarantee to all unemployed minimum age leavers of the offer of a suitable—

Photo of Clare Short Clare Short , Birmingham, Ladywood

Long before the Minister had ever heard of training for young people I was arguing for its expansion. We all had great hopes that we would create from the youth opportunities programme a better and finer training system, but because of the Government's commitment to cutting wage levels and using training schemes to cut young people's wages that opportunity has been destroyed. That is what I oppose, and that is why the Government's rotten training scheme is not working.

Photo of John Gummer John Gummer Minister of State (Department of Employment), Party Chair, Conservative Party

All that the hon. Lady has said shows just how wrong she is, and how much harm she and her kind are doing to the young people of this country.

The scheme provides young people with a real chance of getting a sound footing on the earnings ladder—a step which becomes more difficult as the pace of technological change quickens and skill requirements constantly increase.

In other areas, too, our training policies will open up new opportunities. In the reform of apprenticeship we are seeking to get rid of old fashioned age restrictions and time serving, so that a much broader range of people can obtain training in occupational skills. Our adult training strategy will ensure that many more people, both employed and unemployed, can be trained under the MSC's programmes.

So training is a vital element in our approach to working with the market to improve levels of pay. It must be seen as an investment, in which employers and trainees are prepared to forgo short-term gains for longer term benefits. Here, as elsewhere, that is the essence of our approach.

In the amendment that I propose we state—and the right hon. and learned Member for Monklands, East mentioned it—that this House recognises that the number of people who have a job will depend directly on the levels of pay received by those in work. I listened with considerable care to the speech of the right hon. and learned Gentleman. I noted that he said that those words were gobbledegook, and spoke about another piece of evasion from the Government, the search for some convenient scapegoat and about how the amendment revealed the confused state of Government economic policy. I was very interested to know that.

Does the right hon. and learned Gentleman really believe that there is no connection between wage levels and unemployment? Has he discovered an economic law that exempts from the influence of supply and demand all those on less than average earnings? If so, and he thinks that it reveals the confused state of Government economic policy, he has achieved something that eluded the right hon. Member for Leeds, East (Mr. Healey) when he was Chancellor of the Exchequer. For the right hon. Member for Leeds, East made the position absolutely clear. He said: the number of people who have a job will depend directly on the level of pay received by those in work." [Official Report, 6 April 1976; Vol. 909, c. 271.]

Those are the words of the right hon. Gentleman and they were true. If they were true when he uttered them as Chancellor of the Exchequer, why does the right hon. and learned Member for Monklands, East now tell us that that is gobbledegook, another piece of evasion and that it reveals the confused state of the Government's economic policy?

Photo of John Gummer John Gummer Minister of State (Department of Employment), Party Chair, Conservative Party

What a very interesting revelation! It appears that the policies change not because they are right or wrong, correct or incorrect, but because they win or lose elections. If we care about unemployment and believe that we must use every effective method to reduce it, and to find permanent and real jobs for our people, we must be prepared to look at all the factors that affect employment. If that is our aim, we would be deceiving ourselves not to face squarely the problems posed by wages councils.

I shall answer the points that the right hon. and learned Member for Monklands, East put to me and I hope that he is prepared to listen to my argument. On the one hand, those wages councils were set up, and are continued, in order to protect those whom we believe to be most vulnerable and most likely to receive low pay. We do not disagree about that. We both agree with Winston Churchill's comments in 1909 on that point. The reason for their existence is a thoroughly good one and the purpose behind their creation wholly laudable. But the other side of the coin is that if the operation of such councils leads to more unemployment—I say "if—and if it leads to fewer jobs and less opportunities, it would be quite wrong for any Government concerned about unemployment not to consider carefully the way in which those wages councils work.

It is only in the past few days that we have heard of two wages councils — [Interruption.] If hon. Members listened they would see that there was a clear argument to be made and that they must answer it instead of trying to caterwaul it away. The fact is that it is only in the past few days that we have heard of two wages councils that seem to want to place the minimum rate of 17-year-olds at a level that would exclude many employers from being able to benefit from the young workers scheme. The narrow wage differentials between young people and their skilled and experienced counterparts may mean that there are fewer jobs available for the young. The operation of a number of wages councils is such that a Government would be failing in their duty if they were not clearly willing to look with a fresh eye at the system.

That is why I am not willing to give an undertaking to the House that the Government will take no notice of any argument that links some of the increase of unemployment to the operation of wages councils. It is our job to look at this matter most carefully, and to see how best to improve the prospect of jobs for the people of Britain. For the present, we are constrained by the ILO convention, and there are therefore clear restrictions on what can be done. However, in the meantime the wages inspectorate will continue to act as it has always acted to enforce the law and to uphold the system that we have. This Government utterly repudiate the suggestions that we should, in a hole-in-the-corner way, make the wages inspectorate turn a blind eye to the decisions of wages councils. That would be to ignore the law, and this Government are here to uphold the law and nobody will make any difference to that.

The right hon. and learned Member for Monklands, East told us about the cuts in the wages councils, but I should point out that we are inspecting the same sort of 10 per cent. of the companies covered as were inspected throughout most of the period of the previous Labour Government. So do not let us overdo the cuts that we have had. Apart from the year in which the Labour Government pushed the figure up to 13 per cent., the record is pretty similar. The right hon. and learned Gentleman should check those facts. If the right hon. and learned Gentleman wishes to intervene, I shall give way. It is only fair that he should hear the whole argument, because I may say something that is even more upsetting to him.

We will look with a most searching eye into the operation of the wages councils and examine fairly—not ignoring the facts or refusing to face them—whether their existence and operation increase unemployment. If that turns out to be true, it would be a dereliction of duty were the Government to continue the system merely because we have always had it and merely because Winston Churchill proposed it in 1909.

Photo of Gordon Brown Gordon Brown , Dunfermline East

What wage level was proposed for the 17-year-olds that was so high that the Minister thought that it should be reduced? Is there any shred of evidence to show that by cutting that wage rate more jobs would be created?

Photo of John Gummer John Gummer Minister of State (Department of Employment), Party Chair, Conservative Party

I made it perfectly clear that the wages councils would be affected only if we thought that we had that evidence, and it was clear that a change should be made. I have made that point clear. There is no official statement of what wage levels are being contemplated. I am saying only that we understand that the wage levels might well have the effect that I mentioned. No doubt we shall see when they are given.

Photo of Mr Michael Shersby Mr Michael Shersby , Uxbridge

Will my hon. Friend turn a searching eye or the effect of wages councils on the employment of married women, particularly in the retail and grocery trade?

Photo of John Gummer John Gummer Minister of State (Department of Employment), Party Chair, Conservative Party

My hon. Friend has pointed to one of the areas in which many people suggest that employment opportunities are reduced by the activities of wages councils. However, many others put the opposite view, and it is our job to make a sensible decision on the facts. The difference between the two sides of the House is that we are seeking to solve the problems on the facts, and the Opposition are seeking to hide them beneath their prejudices.

The right hon. and learned Member for Monklands, East and his hon. Friends are right to ask the House to consider the problems of low pay. I hope that before the debate is concluded I shall have received an answer to a question that I put earlier. If it was true for the right hon. Member for Leeds, East that the level of wages has an effect on the level of employment, what has happended in the meantime to change that, and how can the Opposition's present view be squared with that of the former Chancellor of the Exchequer?

Both sides of the House are right to concentrate attention upon the particular difficulties which arise for families whose income means that they are not able to afford what their neighbours can afford. However, the Government are also right to make it clear that the improvement in the standards of living of those who are poorly paid in our community depends crucially upon the general improvement of our economic performance. That itself depends upon our competitiveness, upon the reduction of inflation not only in absolute terms but in relative terms, upon the improvement of productivity, upon the extension of training, and upon the innovative and entrepreneurial skills of our people.

The poor are not made richer by driving brains and skill abroad. Low pay is not improved by stagnating and confining the economy. No hope is held out for those who earn least by threatening to attack those whose high earnings create jobs. I believe that this House should have enough concern for those whose pay is low to throw out this negative and dispiriting motion and make instead the Government's positive and creative amendment the basis for our debate.

Photo of Mr Tom Pendry Mr Tom Pendry , Stalybridge and Hyde 5:01 pm, 15th February 1984

The Minister asked us to accept his and his party's sincerity on the subject. After hearing him, I do not think anyone on this side of the House can believe that his party is sincere about it. If he could not have got a better brief from his civil servants, I am surprised that he, as the chairman of the Conservative party, could not have got a better one from Central Office. I had high hopes of him because I have heard him make a brilliant speech; admittedly, it was on the Adjournment at four o'clock in the morning to a very thin House on the riveting subject of the problems of pig disease and pseudo-rabies in his constituency. I hoped for a better response from him today to my right hon. and learned Friend the Member for Monklands, East (Mr. Smith).

Photo of David Winnick David Winnick , Walsall North

Is it not possible that the hon. Gentleman is so busy intimidating the BBC that he has not got time to read briefs on this subject?

Photo of Mr Tom Pendry Mr Tom Pendry , Stalybridge and Hyde

I am sure that we can all give explanations for his poor response. Basically, it is because he cannot answer the case made so eloquently by the Labour Front Bench. For the Minister to bring in, of all things, the forecast by the Confederation of British Industry is absolutely amazing. Its forecasts are as unreliable as the performances of my team, Derby County, on Saturday afternoons, but at least there is a chance that Derby County will escape relegation.

Clearly the Minister has not got a good case. When we last debated this subject it was also on an Opposition initiative, as it is today. Then the motion was moved by Arthur Bottomley, who is now in the other place where I am sure he will continue to show his concern for the low-paid. On that occasion I made a contribution and I then honestly thought that when we next debated the chronic problem of low pay there would at least have been a marginal improvement. As my right hon. and learned Friend the Member for Monklands, East has said, exactly the opposite is the case. The low-paid have become lower paid because of the Government's policies over the last 12 months or so.

I declare my interest in speaking in the debate. It is twofold. First, I am chairman, as some hon. Members already know, of the parliamentary group sponsored by the National Union of Public Employees. NUPE has in membership hundreds of thousands of low-paid workers and, in particular, 470,000 female workers who, almost by definition because they are in the public sector, are low paid. My second important reason for wishing to see the motion carried is that in my constituency of Stalybridge and Hyde, which falls within the Tameside district of Greater Manchester, we have our fair share of low wage earners.

The most recent survey reveals some shocking discrepancies. Set against a notional weekly earnings average of £137·06 for men and £83 for women, the average Tameside wage earner receives only £73·17 per week. The percentage of those earning less than £90 per week is as high as 74·5, with 82 per cent. earning less than £100 per week. One quarter of full-time adult workers have a weekly wage of less than £56·20. Therefore, by any standards I represent a constituency of low wage earners who demand and deserve a better deal than they are getting from the Government. They will be bitterly disappointed by what the Minister has said.

The picture nationally may not be quite as bleak as that in my constituency but none the less it is dismal. There can be little doubt that since 1979 the problems of the low-paid have increased alarmingly. In 1979 one tenth of male manual workers were classifed as low paid. By 1983 the proportion had jumped to one sixth. For female workers the figures are even more disturbing. In 1979 two thirds were low paid. By 1983 that had risen to three quarters; with the Government policies that are being pursued, the situation in 1984 must get worse.

In the debate last March I raised the absurdity of the fines levied on those who pay wages below wages council standards. The average fine of about £100 is absurd. The chance of these bucket shop employers being caught and having to pay these miserly fines is remote and is becoming more remote by the day. Firms engaged in paying illegal wages may be visited once every 14 years. Only seven employers out of more than 4,000 found to be underpaying their employees have ever been prosecuted. Therefore, it is hardly surprising that illegal payments have increased alarmingly since 1979.

What kind of Government can cut the number of wages council inspectors by one third, leaving only 119 to cover the whole country? While I am on that point, what kind of Government can cut the number of health and safety inspectors by 145, leaving the remainder to do an almost impossible task? Hundreds of thousands, if not millions, of workers run a greater risk of industrial accident and will be subjected to illegal low payments as a direct result of Government policies.

That is a twin indictment of those policies, illustrated graphically by the tragic incident that cost the lives of five low-paid women workers in an east end sweat shop last October. The owner of the Metawear clothing factory in Tower Hamlets was quoted in The Observer of 29 January as saying: If a fire started there is no way out. A proper exit would cost £4,000.The Observer went on to say: Because of the recession, jobs are scarce, wages are very low, with little union representation there is little chance of conditions improving. What response did we get from this compassionate Government when that happened? We got no response at all. We certainly did not get anything from our Prime Minister, who talks about her compassion for society. I agree with the Prime Minister that George Orwell did get it wrong: 1984 is not the year of Big Brother; in this country it is the year of Big Sister. The right hon. Lady will not be happy until wages councils, health and safety executives, metropolitan counties and many other bodies go. Not even in wartime Britain did we have so much centralisation and bureaucratic control as we have under the present Government.

I wear my NUPE hat firmly as I come to the problems of low pay as it affects the vital service of the National Health Service, which has proved to be most unsafe in this Government's hands. This year, NHS ancillary staff have fallen behind even the minimum wage rates for ancillary staff as laid down by the wages councils, which are supposed to provide a safety net for groups of workers who are among the worst paid in the economy and who have no other protection.

Consider the position of catering staff in the NHS. The wages council's minimum rate for, for example, waiters and waitresses is £64·41 for a 39 hour week, yet catering assistants in the NHS are paid even less. Because of the time, I will not weary the House by quoting many figures, though I am tempted to do so for laundry and cleaning staff, who have no wages council to cover them. ACAS has pleaded for a wages council for them, as they are among the lowest paid in the country.

This is an area in which the Government will let loose their friends in the private sector, and we know the record of private contractors. They have not shown themselves reluctant to attack the wages and working conditions of their employees. We are, therefore, likely to see an alarming deterioration in the standards that already exist in the NHS for the people about whom I am speaking.

In that connection, we are aware what happened with Pritchards, the services group which was eventually sacked by the authorities in Wandsworth for amassing penalties of about £138,000. Many other such examples could be cited. Throughout the country, cowboy contractors are depressing wages even lower in a desperate attempt to make money at the expense of the public, aided and abetted by this Tory Adminstration, who have abolished the fair wages law so that the pathetically low wages that have existed in some industries can be undercut still further. I will not continue with that argument, except to refer Conservative Members to two excellent publications, "Fighting Privatisation: The Struggle for Wandsworth" and "Public Service Action."

Photo of David Winnick David Winnick , Walsall North

They are not listening.

Photo of Mr Tom Pendry Mr Tom Pendry , Stalybridge and Hyde

I had hoped that at least the Minister would listen to me.

Photo of David Winnick David Winnick , Walsall North

They do not want to hear a word of it.

Photo of Mr Tom Pendry Mr Tom Pendry , Stalybridge and Hyde

They did not listen to the debate that we had last March and they have not been listening to the continuing debate that has been going on throughout the country, in the trade union movement and beyond, about this whole problem.

Photo of Mr Tom Pendry Mr Tom Pendry , Stalybridge and Hyde

Perhaps as a result of this barrage, not least from my hon. Friend the Member for Walsall, North (Mr. Winnick), the Government Front Bench will show some concern.

Photo of Mr Tom Pendry Mr Tom Pendry , Stalybridge and Hyde

If my hon. Friend will permit me, I will continue with my speech, and perhaps he will have an opportunity to make his own speech. I appreciate his concern, because he knows that what I am saying is correct. Conservative Members should heed what we are saying in this debate.

Another measure of how low pay in the National Health Service among ancillary staff is measured was referred to by the Minister, and that is the social security system, which sets levels of benefit that are considered to be the minimum necessary to sustain the average family. It has been calculated that a person at work needs nearly £100 in gross weekly pay to match the meagre poverty level income, yet over one third, 36·9 per cent., of adult male full-time workers, and about three quarters, 75·7 per cent., of adult female full-time workers covered by the ancillary staffs council fall below this poverty line.

That leads on to the question of women workers generally. Those entitled to equal pay have received short shrift from this Government, who have reluctantly reintroduced equal pay for work of equal value provisions, but revealed their true colours recently when the Sex Equality Bill was defeated as a result of massive Whipping by the Government.

I remind the House of some words that were used by the present Prime Minister in 1970, when she was a relatively lowly figure in the Conservative party. As the hon. Member for Finchley, she said on the Second Reading of what was then the Equal Pay Bill: So many people have supported the idea of equal pay for so long that one wonders at the continuing inequality of payment between men and women. I believe that the Bill will lead to better pay for many jobs, and I support it as another step in the equal pay story." — [Official Report, 9 February 1970; Vol. 795, c. 1027.] Those were the days when she was saying, among other things, that there would never be a woman Prime Minister in her lifetime. Unfortunately, she got that prediction horribly wrong. It is appropriate, as we debate the motion, to remember the words that the right hon. Lady used on that occasion and to remind her of them time and again because when she uttered them she had no idea that she would occupy the office that she now holds.

Low pay is still the greatest problem facing most working women. A NUPE survey carried out between April and November of last year showed that the average man's wage went up from £167·50 to £174·40 and that the average woman's wage rose from £108·80 to £113·30. I have quoted figures for the so-called "women's jobs" in the Health Service — for example, in cleaning and catering—where the pay on average—at say £65 a week —falls well below those norms. It is about time that the House recognised that the work of these women must be valued more highly and paid for accordingly.

No worker, male of female, should earn less than the Government's poverty level o £100 a week. The case for a minumum wage, which would go a long way towards helping women and men at the bottom of the pay table, is overwhelming. I hope that the debate will bring home to the Government that enough is enough. Nationally and internationally the Government should recognise their obligations to the appropriate ILO conventions and their commitments to the Council of Europe, but most of all they must meet the commitments into which they entered to the British people at the last two general elections. The workers of Britain look to the Government to guarantee their right to earn a decent wage in safe conditions of work. It is about time that the Government lived up to their obligations to the people.

Photo of Mr Eric Cockeram Mr Eric Cockeram , Ludlow 5:18 pm, 15th February 1984

We are debating the problems of low pay, which is a relative term and which means different things to different people. The right hon. and learned Member for Monklands, East (Mr. Smith) gave as his definition of people on low pay those who were at the bottom average 10 per cent. of the wages scale. If that be the definition, the problem is insoluble because there will always be a bottom 10 per cent.

It is, however, a relative term, and as the motion refers to wages councils, I shall concentrate on the problem of wages councils as they affect youths and school leavers, because all hon. Members must be worried in particular about the problem of unemployed school leavers.

In 1945, at the end of the war, the wages council rates in Britain for school leavers were fixed at about 38 per cent. of the adult wages set by those same wages councils. That gave a youth the opportunity roughly to treble his wages during his working life, ignoring inflation. By international standards, that was a narrowish band. In Switzerland today, the average school leaver's wage is about one-sixth of the adult wage. That gives them an opportunity to multiply their income sixfold — again ignoring inflation—during their working life. However, in this country the youth wage rate in 1945 was 38 per cent. of the adult rate.

Photo of Mr Eric Cockeram Mr Eric Cockeram , Ludlow

I will give way when I have developed my theme.

It is a feature of the wages councils that the percentage rate for youths has risen faster than rates for adults set by the same wages councils. Today the starting wage for school leavers in wages council industries is, on average, 62 per cent. of the adult wage.

Photo of Clare Short Clare Short , Birmingham, Ladywood

For some time now there have been frequent suggestions that the cause of high youth unemployment is high youth wages. We frequently hear that view repeated from political platforms. However, all the research evidence shows that it is false.

The famous Makeham study, commissioned by the Department of Employment, showed that there is no explanation in youth wage rates for the level of unemployment in Britain. The Department of Employment was so anxious to prove that those findings were false that it recently commissioned another study. However, it has failed again. The claim that youth wages are part of the explanation for youth unemployment is false, and has been proved false over and over again by the most authoritative studies.

Photo of Mr Eric Cockeram Mr Eric Cockeram , Ludlow

There have been many contradictory studies on this issue. I should like to ask the hon. Lady whether, when she goes shopping, the price of the commodity that she wishes to purchase is not a salient feature of her decision whether or not to purchase it.

Photo of Mr Eric Cockeram Mr Eric Cockeram , Ludlow

No, I am replying to the question put by the hon. Lady. Would she not probably look elsewhere to try to find a commodity at a lower price?

Wages are a principal factor in the cost of production. To suggest that wages do not play a part in the ultimate price of the finished product that the hon. Lady might buy in the shops is fallacious in the extreme, and youth wages are a component part of that cost.

Photo of Mr Dale Campbell-Savours Mr Dale Campbell-Savours , Workington

The hon. Gentleman has referred to the existence of a number of contradictory studies. Could he identify one of them for us?

Photo of Mr Eric Cockeram Mr Eric Cockeram , Ludlow

There have been a number of studies. If I had realised that the hon. Lady would make that point I would have brought them with me.

When the hon. Gentleman is considering whether to make a purchase, I am sure that the price of the commodity is a salient feature in his decision, too.

Youth wages have risen from 38 per cent. of the adult minimum wage after the war to 62 per cent. today. Today, employers are deliberately cutting back on the number of youths whom they employ, and on their training schemes, because of the cost of employing those youths. To that 62 per cent. of the adult wage we have to add the costs of training the youths and of the management time devoted to running training schemes. It then becomes apparent that school leavers cost much more than 62 per cent. of the adult wage.

Two large firms in my constituency have closed down their apprenticeship training schemes because they can no longer afford to run them and pay current wage rates. Farmers in my constituency, too, are constantly finding that wage costs are such that it pays them to become more capital-intensive and mechanised rather than to employ school leavers. I do not dispute the fact that Labour Members, like myself, are concerned about unemployment among youths. However, they cannot get away from the fact that the cost of employing those youths influences the employer's decision whether or not to take them on.

Wages councils cover some 3 million employees in this country—roughly one seventh or one eighth of the total. Those employees are mostly in the unskilled trades in which many school leavers, particularly in the urban areas, seek their first jobs. The Government should address themselves to the problem of wage rates for juveniles in those wages council trades. Some employers in urban areas today would willingly take on a group of youths and put six or seven £5 notes into their hip pockets on a Friday night. That wage would be below the level of income tax, and there would be no deductions. I come from Merseyside, and I know youths who would willingly work for that sum. They would have training and experience and an opportunity. However, an employer who takes on any youth at that rate in a wages council industry is breaking the law, and so he does not do so. Wages councils are contributing to unemployment among youths in the trades in which they are operative. I hope that in due course the Government will allow employers to take on youths for training at an economic rate. If they do so, they will make a contribution to solving the problem of unemployment among our youths.

Photo of Mr David Penhaligon Mr David Penhaligon , Truro 5:27 pm, 15th February 1984

Anybody who has ploughed through the volumes of statistics on low pay and has examined regional pay will have noted that my dear home county of Cornwall has had, and is likely to continue to have, the dubious distinction of having by far the lowest average wages in Great Britain. I have lived with this subject for a long time. It is of desperate importance in my part of the world, as it is throughout the length and breadth of our country.

The Government's current stance on this matter is quite unbelievable and harsh, and can only make the situation worse for large numbers of extremely vulnerable people. However, the solutions are not easy or overwhelmingly obvious. The average male wage in this country at the moment is £167·50, and one must assume that that is the average wage that the British economy can stand. Half the male workers are paid less than £150 a week. If we wish to increase the wealth of a group of employees relative to the economy at any one precise moment, we must decide which group of employees within the economy is to be worse off. Unless we do that, we shall increase the average, and to do that at any time must have other undesirable effects on the economy.

The figure of £167·50 is a reflection of Britain's economic position. We could have a long debate on the reason why we are where we are. When I visit other European neighbours, I do not need any statistics or calculations to show me that they are obviously better off. The wealth is there to be seen. The solution is not as simple as has been suggested from the Labour Front Bench. Apparently it was argued that all that is necessary is to increase the wages of one group of workers, and the problems will dissolve.

That is not argued by a large number of people, but I recall discussing the value of incomes policy with the president of the National Union of Mineworkers a few years ago and eventually being reduced to challenging Mr. Scargill to say whether he believed that the immediate doubling of every person's income would necessarily lead to an increase in prices. To resounding cheers from the militants in the back row, he replied "No." It is difficult to know where to start a discussion with someone who takes that view of economics. My education at least taught me to add up.

There has been a period of lack of investment with, at times, almost hysterical opposition to technology and productivity. It is tempting to enter into a discussion about that, but it is not the main issue. The issue of the day is whether, within the economy that we have, we can do more to protect the lowest paid or whether we have to do less. It is my firm view that we should at least maintain the protection that exists and, indeed, try to extend it.

At present, protection for the low-paid in this country amounts to very little more than the wages councils. I believe that those councils should be maintained and extended to other areas of work and that greater effort should be made to enforce the pay rates. I listened with great interest to the hon. Member for Ludlow (Mr. Cockeram). If he was saying, as the Minister almost said, that the only real criticism of wages councils was the ratio of youth pay to adult pay, I would rather see that problem put right—if it is a problem, and there seems to be some evidence that it may be—than used as an excuse to scrap the whole system of wages council protection. There are undoubtedly very many people in this country whose pathetic wage rates are supported by the wages councils, and a significant number of them would be paid even less if the councils were abolished. The percentage of such people in my county is probably higher than anywhere else.

The various criteria produce a figure of about £100 per week as constituting low pay. That seems a reasonable figure to start from. There is clear evidence that some 3,500,000 adults in this country earn less than that, many of them a great deal less. Rather than pretending that it would be possible to bring every adult wage above £100 per week, I would support legislation at least to raise the wages of the most vulnerable in our society. The statistics show that in the London borough of Barnet 10 per cent. of male workers earn less than £93 per week. In Hackney 10 per cent. earn less than £89 per week. In East Anglia, 10 per cent. earn less than £92 or £93 per week and in Cornwall 10 per cent. earn less than £82 per week. The figures for women workers are even worse. A number of categories are at the rock bottom of what any of us could consider to be civilised wages. I believe that the Government have a responsibility at least to maintain the protection that now exists for those people and, if possible, to extend it and gradually to increase their pay in real terms.

It has been suggested that the situation is getting worse. Such statistical evidence as I have found bears that out. Certainly, the effect of legislation in the past few years has inclined in that direction. The Government have deliberately skewed the tax system to affect the low-paid more than the high-paid. For a family of four with two thirds of the national average wage the tax burden has increased by 18 per cent. since the Government came to office whereas for those on 10 times the national average wage the burden has been reduced by 22 per cent. In terms of sheer justice and civilised behaviour, that does not seem a sensible way to go about things.

There is now the ludicrous situation in which anyone with children, who is paid between £60 and £100 per week, is not better off with each pay rise and may even be worse off. The highest marginal rate of tax now applies to people earning £70, £80 or £90 per week. It would be embarrassing to reveal my sources, but I have evidence that there is now a trend for employers to tell employees with families that they can claim family income supplement, rent rebate and rate rebate and that the employers will drop them a tenner on Saturday if they agree to appallingly low wage rates. That is the reality and it is increasingly prevalent in my county. I cannot reveal the sources of my information as it comes from constituents who complain to me about the practice and ask what they can do about it. I say that they can report it but I have to admit that the net effect of that is likely to be the loss of the job that they have, at which point they leave my surgery a little wiser but no better off. I fear that that practice will increase so long as we have ludicrous marginal tax rates as high as 100 per cent.

One answer to the problem must be to extend wages councils into areas not currently covered in terms of adult workers. I hope that the Government will give us at least one clear answer today. What do they intend to do about this? The Conservative election manifesto said something to the effect that nobody would be unable to take work due to wages legislation. At the time I was not sure what that meant and it seems that the Minister did not know either. One can only conclude that the Government have yet to make up their mind whether to abolish the wages councils. I suspect, however, that there has been a gradual shift of view in the Government, which I welcome. It has become clear that total abolition of all wages councils will make the poorest members of our society even worse off.

I take the view—I sometimes suspect that it is shared by the Minister of State, the hon. Member for Suffolk, Coastal (Mr. Gummer) — that one of the main responsibilities of the House to the people, one of the main obligations of politicians and one of the main tests of a civilised Government, is whether the weakest and most vulnerable members of society are protected. I go further. We have a duty to protect the weak and to control the strong. The strong generally do not need much protection, being more than able to look after themselves. Are the Government prepared to protect the lowest paid people in the land? The Minister will see from the statistics that those people are not in the city areas, which elect Labour Members, but in rural areas such as Lincolnshire., Cornwall, Herefordshire and the Scottish border areas. If the Minister abolishes wages councils, people in areas represented by his own political colleagues will be even more vulnerable. One thinks of the lady looking for a job in the village shop or the man in his twenties trying to raise a family and with only his own labour to offer. Those people will be paid even less than their present rates, which all too often are deplorable.

I do not believe we can change to a system in which the minimum wage is two thirds of the average. What we assume to be Government policy will, if it is not changed, ensure that even more adult workers will earn from £50 to £70 for a full week's work. If the Government do not believe that that is possible, I can quote non-wages council workers in my area whose top line, before the taxman cometh—not their take-home pay—is about £45 to £50 a week. I recognise this country's economic difficulties; it is lunacy to believe that we shall overcome the problem without an overall pay policy—of which I am openly in favour.

I agree with the Government that simply paying people more will create unacceptable economic difficulties, but the solution cannot be to pay even less to those whose pay is already abysmal. I know that the Minister is a Christian man. Does he want to be party to legislation that increases the number of family men earning less than £75 a week? That is what the abolition of wages councils means; that is what the Government will achieve by this lunacy.

By all means let us investigate the ratio of youth wages to adult pay, if that is what the Government think is wrong with wages councils. But abolishing the fabric of the councils would be the most appalling scandal, the most outrageous abrogation of responsibility for those at the bottom of society, that I have seen in my time as a Member of Parliament.

I ask the Minister to use his influence in the Government forthwith to prevent the lunacy of this apparently serious proposal. In fact, I can see no reason why he cannot allow his hon. Friend to tell us tonight that some minimum wages protection is Government policy and that it will be maintained.

Photo of Mr David Atkinson Mr David Atkinson , Bournemouth East 5:42 pm, 15th February 1984

I have some sympathy with the hon. Member for Truro (Mr. Penhaligon). Contrary to what many hon. Members believe, people in the Bournemouth area do not enjoy high wages, because, like many of the hon. Member's constituents, 15,000 of them depend mainly on tourism.

The suggestion that Bournemouth is not a rich town may cause incredulity. Those who visit Bournemouth for holidays or conferences regard it as one of the country's most attractive resorts, with high-class shopping, the largest number of hotel beds outside London, and seven miles of clean beaches. It has one of the most attractive hinterlands that any resort could wish for in Hardy's Dorset and the New Forest. It has an exceptional climate and superb conference and exhibition facilities, which will shortly be enhanced by the opening of a new international conference centre, where, I understand, major political parties are planning to hold their conferences.

If that sounds like a commercial for my constituency, it is meant to be—not least in the interests of the low-paid within it. But behind that facade of prosperity are many people who retired to Bournemouth on low incomes and who now find it impossible to make ends meet because inflation has eroded the value of their savings and thus their incomes. They bless the Government for bringing down inflation, and keeping it down, unlike the Labour Government.

I stress that the people in my area on low incomes may be worse off than those in many other areas, because it appears to experience one of the country's highest costs of living. I say "appears to experience" because that is the impression that one gains from reading the weekly shopping basket feature in the Daily Telegraph, in which prices of basic food items are compared in about 12 towns and cities throughout the country. Each week since last November Bournemouth has headed the list. Last week the price stood at £19·20, which is 5 per cent. more than the average price of the same items bought in Cardiff, Ipswich, Belfast, Leeds and Liverpool. In this case, unusually for it, the Daily Telegraph gives a false impression because it does no justice to the competitive prices—I know from my own experience, living in the constituency—that are charged in smaller shops in the outlying areas away from the town centre supermarkets, which is where I suspect that the surveys are carried out. Nevertheless, many of my constituents are clobbered both ways by low pay and high living costs.

Regrettably, low pay has long been associated with the tourist industry and businesses that depend upon it. That is because in the past jobs in hotels and catering have attracted people with few skills and qualifications, so that the competition for those jobs is great. Because of the seasonal nature of the business, many jobs are only temporary, which depresses wage levels further. A senior wage inspector for the south-west region to whom I spoke yesterday told me that he received over 1,000 complaints a year from hotel workers who were concerned at receiving low pay or not receiving their holiday pay entitlement. He told me that there were more complaints from our region in the south-west than from any other region. For example, an employee in a hotel who does not come into contact with customers receives £69 a week for a 40-hour week, while his colleague who comes into contact with customers receives £59 a week, £10 less, because it is expected that he will receive tips.

The concept of tips is a dimension in the determination of pay levels that should have ceased a long time ago. I hope that the tourist industry will face up to that as soon as possible, particularly now that there is every reason to believe that it has one of the brightest futures of any industry. Tourism has long been one of the country's most successful industries, which, in my view, successive Governments have failed to recognise in terms of practical support. The industry will have a healthier future given the great prosperity and leisure time that we are all promised by the technological revolution. Therefore, in the tourist industry there will be rewards for those who manage efficiently, market imaginatively and attract those with the right skills and qualifications. It should no longer be associated with low pay in future.

The motion refers to wages councils. In the past unions and employees in the tourist industry looked to them to improve pay and for protection from unscrupulous employers. Of the total number of establishments covered by wages councils—about 391,000—more than three quarters are directly or indirectly associated with catering, residential or retailing businesses. It may be that historically, but for wages councils, pay would be even lower.

However, by no stretch of the imagination can one seriously equate the pay conditions that motivated Winston Churchill to establish the wages councils when he was a Minister in the Liberal Government almost three quarters of a century ago with pay conditions today. The Government must face up to the reality that wages councils have outlived their usefulness and help to create higher unemployment rather than higher pay. I was delighted to hear that the Government are now prepared to face up to this and are reviewing the workings of wages councils.

Photo of Mr John Evans Mr John Evans , St Helens North

I am listening to the hon. Gentleman with great interest. He is arguing that the wages councils have outlived their usefulness. A moment ago he said that a wages council inspector to whom he had spoken recently said that last year he had received more than 1,000 complaints from workers about not receiving their proper remuneration. If the wages councils are abolished, to whom will those workers turn?

Photo of Mr David Atkinson Mr David Atkinson , Bournemouth East

I shall cover that later in my speech, and will refer to complaints that I have received from employers who tell me that the effect of wages councils is to reduce the number of people that they can afford to employ.

We cannot escape from the evidence that I and many of my colleagues have received. It is right that we should now question why 100 countries have not signed the ILO convention, including Australia, Canada, West Germany, Sweden, Switzerland and Japan.

I cannot believe that any hon. Member has not received complaints from constituents who are retailers or small businessmen and whose ability to manage efficiently and profitability has been affected by wages councils' decisions. From my own experience, I know that they object strongly to the fact that such decisions become enforceable in law and that disregard by them, even with the consent of the employee, is a criminal offence.

Many people thought that the attitude of the Conservative Government, and, indeed, of the last Labour Government in their latter days, was against statutory wage controls. After 1970, I understood that never again would a Labour Government introduce compulsory wage controls, and that pledge was repeated in 1979. I also understood that after 1974 the Conservative party said that never again would it contemplate compulsory wage controls. Yet such controls are alive and kicking in the form of wages councils.

Many employers complain that the continued annual increase in minimum rates of pay makes it impossible to employ the number of staff required for the efficient operation of their businesses. Even more aggravating is the fact that they have no control over the rates that economically they can pay to make a profit. These are settled by councils which cover the whole country, and they cannot possibly take into account the local conditions and problems that affect local profitability.

Photo of Clare Short Clare Short , Birmingham, Ladywood

I am sure that the hon. Gentleman wishes to represent the interests of all his constituents. Has he talked to any of his constituents who are protected by the wages councils? Has he asked whether they resent statutory force being given to the wages councils? Surely the employers' view is only one side of the argument. The hon. Gentlemen must have other constituents who need protection. Has he anything to say about them?

Photo of Mr David Atkinson Mr David Atkinson , Bournemouth East

Many of my constituents are fearful for the future of their jobs simply because of the awards made by wages councils.

Many employers also complain about the composition of the wages councils, in particular about the number of independent members. These independent members decide on the awards to be made when those representing the employers and the employees cannot agree. I understand that in 1982 the 81 seats for the independent members of the 27 wages councils which then existed were held by only 39 people, 30 of whom were academics. Eighteen lecturers held 50 seats between them; five professors held eight posts; seven other academics held nine posts; and the other 14 posts were held by four barristers. From that breakdown, it is obvious that academics are the most dominant.

I have nothing against academics, and I admit that I do not know any who are members of wages councils. However, it is reasonable to suggest that many of them will not have had employer experience, although all of them will have had employee experience.

That breakdown also shows that many of these independent members sit on more than one council. Can they really act as truly independent judges in each case? Can they really be free of any influence of any judgment that they may have made about a wages increase that was fair in respect of other councils, given that particular circumstances may be completely different?

The main complaint from employers is that wages councils have tended to grant awards that are ahead of the rate of inflation, and in so doing are helping to fuel inflation. The employers cannot take into account the cost of employing labour in relation to other costs. This was well summed up in a letter that I received last year from the proprietor of a popular bread and cake shop in my constituency. He wrote to the retail food and allied trades wages council: A year ago you gave an increase in shop staff wages which we objected to most strongly and now you are proposing yet another.This is utter madness. Every reason we gave last year applies with even greater emphasis this year, trade is lower than last year, which was in turn lower than the previous year, bread sales continue to fall nationally. Average purchases per customer remain very low, meaning that sales staff have to be higher than they should be for the turnover done each day. Other costs over which we have no control such as Rates and Water Rates increase but in the present business climate any increase in prices would be suicidal. So where do you propose we raise the money to pay any increase at all, let alone the high level you propose?

Photo of Mr Terry Lewis Mr Terry Lewis , Worsley

Will the hon. Gentleman give way?

Photo of Mr David Atkinson Mr David Atkinson , Bournemouth East

I will, after I have finished quoting this letter from an employer who dramatically describes the effect of wages council awards on his business and profitability. He continued: We said last year that any increase given would be paid only by a reduction of hours so that we did not increase our wage bill … Last year we stood-off one male confectioner and now this year we have stood-off one more, this time a woman, and you may be assured that if you give even 1% more in this current round of pay bargaining then we can only pay it by a further reduction in staff. Thus far from putting more money into the pockets of employees, you are making some unemployed, whilst the lucky ones who remain in work only maintain the same income albeit for a few less hours. I repeat utter madness

Photo of Mr Terry Lewis Mr Terry Lewis , Worsley

What wage rates were involved, and what profits was the cake shop making? In my experience, employees who are covered by wages council conditions are usually the lowest paid in the land. It would be interesting if we had an assurance from the hon. Gentleman that he is not suggesting that wages should be further depressed.

Photo of Mr David Atkinson Mr David Atkinson , Bournemouth East

I cannot give the hon. Gentleman the information that he requires because I do not have it in the letter from which I was reading. I suggest to him that low pay is better than no pay and no jobs.

I shall refer to another letter which also illustrates the difficulties that employers have to face when they have wages council awards imposed upon them. The letter from which I am about to quote is from a social club-leisure centre whose main activity is bingo. The letter states: We employ 15 full-timers and 50 part-timers and 20 of these employees must be awarded a 6·38 per cent. wage increase as per Wage Council. The inflation rate is now running at 4·5 per cent."— the letter was written at the end of 1983— possibly rising to 5 per cent. and the Government policy towards Private Sector Workers is endeavouring to settle for a 3 per cent. rise in wages. The author has that wrong because that is the Government's policy towards the public sector. The letter continues: This differential to me does not make sense.Our particular case, a small Independent Company, surviving but suffering from a severe cash flow problem, the effects from severe competition from major circuits, the present economic climate and ever rising overheads. We are trying to run an efficient business, with a will to survive and under the present conditions of employment have a contented staff and enforcing this unrealistic wage increase will cause discontent amongst other members of the staff, some with more responsibility, who are not affected by this compulsory rise and what is more, we can ill afford to meet this obligation.Can something be done to avoid this compulsory wage rise? Perhaps you may consider taking this matter up with the Secretary of State, using our company as an example, to get the Act rescinded to save other small concerns in the same predicament.I strongly recommend Wages Councils should be abolished as soon as possible so that small firms like ourselves, without union affiliation, can have the freedom of free collective bargaining with our employees, which would ultimately be beneficial to all concerned with full knowledge of the Company's present financial position.

Those are just two example of many thousands throughout the country.

Photo of Mr David Penhaligon Mr David Penhaligon , Truro

I recognise the arguments that the hon. Gentleman is advancing because I have had them put to me. A minuscule amount of justification may lie behind a few of them. The hon. Gentleman is submitting marginal arguments. He argues against a pay rise this year of 6 per cent. against inflation of 4 per cent., and he is using that as a reason for abolishing the whole caboodle. Does he want to remove from his Bournemouth hotel-working constituents the protection of a minimum rate of pay?

Photo of Mr David Atkinson Mr David Atkinson , Bournemouth East

That is not my position, which I shall explain in due course. I have quoted from part of the feedback of those who are struggling to survive in small businesses. They have a long-term future and they are trying to contain the problem that is imposed upon them by the awards of wages councils. The complaints which I have quoted are similar to those which many of my right hon. and hon. Friends have been receiving for a long time.

They have been received also by a responsible organisation of which most hon. Members will be aware, the National Federation of Self-Employed and Small Businesses. About two years ago the federation produced a booklet entitled "Priced Out", which described the effect of wages councils awards on jobs. The federation had surveyed the problems faced by small businesses throughout the country in recent years as a result of the activities of wages councils. Following the survey and its consideration of the information revealed by it, it produced some practical recommendations to which I hope my hon. Friend will give some consideration as part of his review of the workings of wages councils.

The federation acknowledges that it might be useful—this answers the question of the hon. Member for Truro— in some trades at least, to have a forum for collective bargaining, and the Wages Councils and Joint Industrial Councils may have some present role in this. Our recommendation, however, is that this bargaining should be done on a voluntary basis by individual employers and their staff, or by bodies set up and serviced by the employers and employees in the industries concerned—not by central Government.

The federation is suggesting that The Wages Councils in other words, should lose their statutory powes and privileges. The legal enforcement of minimum wages should be removed; the central government secretariat should be disbanded; and the inspectorate should be discontinued. The Secretary of State has the power to convert Wages Councils into Statutory Joint Industrial Councils, without enforcement powers, and this would be a useful first step.

The federation recognises that whatever might be done as a consequence of denouncing the ILO convention will take time. It makes some practical recommendations for immediate changes of policy and, again, I hope that my hon. Friend will give consideration to them. It suggests that Firm dates should be set down for Wages Council meetings, and a timetable for negotiations.

It suggests that under no circumstances should an award be backdated to any time before the order has been published and circulated to affected firms. It suggests that Longer time periods are needed for consideration of proposed orders … a minimum of eight weeks to allow businessmen to digest the implications of the 'green papers' and to cover absence through holidays or sickness. It suggests that When the final order is published, there should similarly be a delay to allow time for adjustment before it becomes effective. It suggests that the Government should advise Wages Councils forcefully of the results of seasonal fluctuations in trade, which cause seasonal unemployment because of minimum wage laws. That is a problem that employers in my constituency experience as well as those in the constituency of the hon. Member for Truro. It suggests that account should be taken of the hard effect which minimum wage regulations has on the smaller business … the difficulties caused in terms of unemployment and staff relations of the erosion in age differentials … the tendency of increases to remain above the general rate of increase in prices. It recommends immediate changes in existing policy and that material published by Wages Councils should be simplified and should avoid the legalistic language which causes most of the problems. There should be more information given to employers and employees alike, such as who sits on each Wages Council, and how they are chosen, and so on. Other forms of communication from Wages Councils, such as the inspectorate's enquiry form, should be re-drafted. Much offence could be spared if representatives of independent businessmen were asked for an opinion about such communications before they were produced and distributed. Wages inspectors should be bound by a code of conduct, which should be freely available to employers. This will explain the rights and obligations of the employer, and will remind the wages inspector of how to make his enquiries most courteously, without embarrassing employers in front of staff or customers. The code should be agreed with the help of smaller business men.

We have been through this before with the conduct of VAT inspectors. I well remember raising on the Floor of the House about five years ago an instance in which a VAT inspector had interrogated a constituent of mine as part of an investigation to ascertain whether he was abusing his tax returns. He was a restaurateur, and I remember that the VAT inspector asked him how many peas he provided in each of the meals that he served—

Photo of Mr Terry Lewis Mr Terry Lewis , Worsley

On a point of order, Mr. Speaker. Surely the hon. Member for Bournemouth, East (Mr. Atkinson) is straying from the subject of the debate into VAT inspectors. He is taking up valuable time that Opposition Members wish to have.

Photo of Mr Bernard Weatherill Mr Bernard Weatherill , Croydon North East

I do not think that the hon. Member for Bournemouth, East (Mr. Atkinson) is straying from the subject, but it is true that he began speaking at 5.42 pm, and many other hon. Members wish to speak in the debate. Perhaps the hon. Gentleman will bear that in mind.

Photo of Mr David Atkinson Mr David Atkinson , Bournemouth East

Thank you for your kindness, Mr. Speaker. I realise that many hon. Members wish to speak in the debate, and that I have strayed a little in trying to illustrate the behaviour of Government inspectors when dealing with people who must run businesses.

I hope that my hon. Friend the Minister will accept that the federation's suggestions about the effects and workings of wages councils are practical and should be considered now.

I have every sympathy with the low-paid, but the answer does not lie in forcing employers to pay so-called minimum wages, nor does it lie in wages councils. It lies in the suggestions in the amendment of my right hon. Friend the Prime Minister — low inflation, higher productivity, healthier profits and an improving economy. Above all, it lies in freedom for the wealth creators and the job creators to do just that—to create wealth and jobs. The sooner that wages councils are abolished in their present form, the better it will be for those who have a job and who wish to keep it, as well as for those who want a job. As I said in response to the hon. Member for Worsley (Mr. Lewis), low pay is better than no pay. It can also lead to higher pay, and that is what the Government's economic strategy is about.

Photo of Miss Betty Boothroyd Miss Betty Boothroyd Member, Labour Party National Executive Committee 6:12 pm, 15th February 1984

The hon. Member for Bournemouth, East (Mr. Atkinson) gave us a colourful description of his constituency. It is in stark contrast to the black country towns that I represent. The hon. Gentleman talked about cake shops, which I would be the first to acknowledge are essential establishments, but I want to talk about sweat shops, which have no place in our society today. Therefore, I have no doubt that our views will vary, just as our constituencies contrast each other completely.

I shall restrict my remarks to the west midlands, not least because I represent part of that area, which is the best possible reason, but also because that region has rapidly become one of the lowest paid in Britain. A decade ago it was acknowledged by all to be prosperous, with low unemployment and reasonably high earnings. However, during the past five years it has moved from affluence to having severe economic problems and widespread poverty.

Unemployment in the west midlands is now well above the national average, and serious and intense problems of low pay have developed in many industries which never knew it previously. Male workers, who were once at the top of the pay league, have suffered a major reduction in earnings—about 10 per cent —in relation to the national average. Women workers have experienced a similar sharp decline in earnings. Although more than half of all full-time working women are low-paid throughout this country the proportion of those on low pay in the west midlands is far higher than the national average.

A number of influences have resulted in women occupying a disadvantaged position in the nation's labour force. The evidence for that — I shall not weary the House with it because I see that many hon. Members have it, as no doubt does the Minister — is in the new earnings survey and the material that has been sent to hon. Members by the Low Pay Unit. The material shows that women working in both the manual and non-manual sectors in the west midlands are especially disadvantaged, compared with their counterparts elsewhere, and that their average earnings are lower in that region than in any other part of Great Britain. Yet that is a region where, by tradition, women have gone out to work. It is a region where they used to occupy a high position in the pay league, but now they have dropped to two steps from the bottom. They are not quite at the bottom that was described by the hon. Member for Truro (Mr. Penhaligon)—he has the distinction of representing the region at the bottom of the pay league—but the west midlands is only one step up from the pavement.

I have no doubt that a crucially important factor in that is massively high unemployment, because I believe that there is a direct correlation between high unemployment and low wages. That factor cannot be overstated, and I know that my hon. Friends will certainly not understate it tonight.

Coupled with rising unemployment and rising under-payment is the Government's attitude to the wages councils and the inspectorate. The Government are now weakening the machinery that enforces proper rates of pay. In recent times they have seen to it that there are insufficient inspectors to police what is taking place, and, although the inspectorate has the responsibility for ensuring that the standards set by wages councils are adhered to, the job has not been done properly. The west midlands has suffered, as has the rest of the country. During the past five years there has been a one third cut in staffing in the inspectorate. There are now only 10 inspectors in the region, with responsibility for policing 32,000 firms and about 250,000 workers. Those workers are covered by a wages council and are entitled to a minimum wage, yet many of them receive wages well below the legal minimum. That has happened because the overall level of surveillance has been reduced precisely at a time when under-payment is increasing.

Out of those 32,000 firms, only 2,000 have been visited by an inspector. In more than a third of the establishments it was found that people were being paid below the legal minimum. One wonders what the position would be in human terms if there were enough inspectors to visit all the firms for which they are responsible. I think that I know what the answer would be on the evidence already available to us.

I spent last weekend in my constituency. Only this morning I was there again. I was in a ward where one quarter of the working population are registered unemployed. I talked there to men who were looking for jobs. I was told that one or two jobs were available at a weekly pay of between £50 and £60. My right hon. and learned Friend the Member for Monklands, East (Mr. Smith) pointed out that in the Government jobcentres in the west midlands jobs were being advertised below the minimum rate of pay.

Photo of Hon. Peter Morrison Hon. Peter Morrison , City of Chester

The hon. Lady is probably aware that I recently replied to a question about jobcentres. The instructions to all the jobcentre personnel are exactly as she and I would like them to be.

Photo of Miss Betty Boothroyd Miss Betty Boothroyd Member, Labour Party National Executive Committee

I am glad to know that, because many of us have been worried about what is happening in the west midlands.

However, as I said earlier, there is a correlation between high unemployment and low pay. In Tipton, West Bromwich and Wednesbury—areas that I represent—11,000 people have lost their jobs since the Prime Minister took the keys of No. 10 Downing Street. I have no doubt that unemployment on such a scale has brought about what I might call a "bargain basement" for many employers. I acknowledge right away that there are many good employers, and I know many of them. They pay the proper rate, they have trade union organisation in their businesses, and the terms and the conditions of employment are properly implemented. However, with the mass unemployment that exists in my part of the black country, there are too many of the other kind of employers who take advantage of the situation. We have returned to the Victorian era, in that there is a rapid growth of sweat shops.

I want to put three cases on record. In my constituency a secretary who is 21 years of age works 40 hours a week and receives £59 a week. She works overtime, and receives £70·75 for a 45-hour week. After the usual tax and national insurance, her take-home pay is £46 for a 45-hour week. The other case is that of a young man who is a plastics machinist. Again, he lives in my constituency. He receives £66·69 for a basic 39 hours. With a small bonus and regular overtime, his take-home pay after tax, insurance, and so on, is between £73 and £74 a week.

I do not know those two people personally, but last Friday I met a woman in my surgery. She did not want to see me about her job, but like all women we chatted about other things. She told me that she was in full-time work. I was agreeably surprised, because few people in my area are. She works five days a week, from 8 in the morning till 6 at night, with an hour off for a midday meal. Curiosity got the better of me. I had cheek enough to ask her what she earned, and she told me that it was £30 a week. She was a machinist in a clothing industry. She sews men's and women's jackets. She is paid on a piecework basis. She admitted that she was not a very fast worker. She said that the fast workers earned £50 a week, that the average was £40, and she took home £30 a week. She works 45 hours for £30 a week, which I should imagine just about buys her groceries.

I accept that many workers are unwilling to complain about being treated in that way. Nevertheless, they are being cheated, particularly women. Many of them are the breadwinners. They, in particular, worry about losing their jobs. They worry about losing the meagre pay packet that helps to put the food on their tables and keep the roofs over their heads.

The Government asked the Opposition earlier today for suggestions on how to deal with low pay. I always believed that in a parliamentary democracy the Government had the answers because they governed the country, and that they responded to the Opposition's motions. In this case, that is not so. However, I shall give the Minister one or two suggestions, because the depth and intensity of low pay in the west midlands demands an immediate investigation at the highest possible level. The Government should strengthen the wages councils. They should make them more effective, and extend them. That is something that the Government should tackle, and they should start tomorrow. Immediately if not sooner I hope that the Minister will restore and improve the staffing levels, particularly in the west midlands, so that there can be better methods of inspection.

I shall not weary the House, but I want to digress for a moment to raise a brief point. It is, nevertheless, directly relevant to this debate. It concerns the Government's inactivity and neglect in another area. The Government constantly mouth their well-worn phrases about equality of opportunity for women, saying how they provide for the family, and provide part-time work for women and for married women who need and want to go out to work to support a family. There are many reasons today why women have to care for a family—I shall not go into them—and why they need and want to do part-time work. Part-time work is particularly suitable for many women, as the Government acknowledge. I hope, therefore, that in winding up the debate, the Minister will explain why the Government's job splitting scheme specifically excludes married women who are not registered for benefit.

There is a further point. It relates to the EC directive on part-time work, which the Government failed to support. It was tabled as long ago as December 1982. The United Kingdom Government are firmly against the proposal. I understand that there may be a move within the EC to revive the proposal in the form of a Council recommendation, which would not be legislatively binding on member states, but it is unlikely that the United Kingdom Government will support it in an amended form. Perhaps the Minister will tell us about this EC directive on part-time workers. Will he explain why the Government, who say that they are so committed to women, working women and the family, remain opposed to such a move, why they continue to deny women the part-time work that they need?

We have had a serious debate, in which we have heard some very good speeches. The Government must answer a challenge tonight. Over the past five years, they have developed a society in which they have denied 4 million people the basic right to work. At the same time, they have sentenced a further 6 million people, who have jobs, to live well below the poverty line. We want an answer tonight. We want the people of this country to know exactly what the Government are doing to improve their daily lives.

Photo of Mr Spencer Batiste Mr Spencer Batiste , Elmet 6:28 pm, 15th February 1984

As a vice-chairman of the Small Business Bureau, as a solicitor in private practice, and as a west Yorkshire Member of Parliament, in answer to the question put by the hon. Member for Workington (Mr. Campbell-Savours) I can say that I am involved regularly in advising people in the industries concerned with the wages councils on a variety of problems that relate to them. I might say that I advise people on both sides of industry, both employers and employees. I have, therefore, to disclose both an interest in and some experience of the impact of the legislation with which the debate is concerned, especially as it affects industries in west Yorkshire in which my constituency is placed.

I am anxious to find solutions to real problems rather than to engage in political, polemical arguments of a sterile nature. The motion's failing is that it treats low pay in isolation, when low pay and unemployment are interrelated.

Photo of Mr John Evans Mr John Evans , St Helens North

The hon. Gentleman is wrong about what the motion says.

Photo of Mr Spencer Batiste Mr Spencer Batiste , Elmet

The hon. Member for St. Helens, North (Mr. Evans) should read the motion to understand the degree of isolation involved.

A measure, however well meaning, intended to attack low pay or unemployment must be judged on its impact overall. Judgments must be made of its effectiveness in an overall context. I do not hesitate to say that my priority is the creation of real, long term, viable jobs. That is the ultimate priority that we must seek in the industrial context.

I make no apology for saying that the achievement of that priority depends upon the nation's economic health. We now have more low-paid and unemployed than other western, industrialised societies, because for too long we have generated less wealth per head of population than our competitors.

Photo of Mr John Evans Mr John Evans , St Helens North

Only for the last five years.

Photo of Mr Spencer Batiste Mr Spencer Batiste , Elmet

I urge the hon. Gentleman to read an interesting report to which hon. Members have referred in the past and which will be a useful source document for debates on industry in future. I refer to the report commissioned by the European year of the small and medium sized enterprise from the The Economist Intelligence Unit which makes a wide-scale appraisal of a variety of factors in the United Kingdom on a basis equivalent to other members of the European Community. I accept that such a report, because of the complexity of the issues, must be regarded with a degree of caution, but it makes sobering and important reading for hon. Members.

In the context of my argument and of the sedentary intervention just made I shall comment on table 61 of the report, which compares the growth in gross domestic product between 1973 and 1981. It is a tragic tale for Britain because we have come, not only bottom of the league, but bottom by a wide margin. The reasons are reflected in the detailed analyses and schedules in the report. Among the reasons is the framework of our labour legislation generally.

The priority must be to increase economic performance. We shall make major progress only by addressing the problems highlighted in the report. If the Labour party in opposition wish to make a more constructive contribution to that end it would help if they welcomed the present economic recovery instead of deriding it at every opportunity, as the right hon. and learned Member for Monklands, East (Mr. Smith) did this afternoon.

The right hon. and learned Gentleman's proposals for the restoration of schedule 11 to the Employment Protection Act and the resultant leap-frogging of wage claims is as sure a recipe for a return to inflation and hyper-inflation as any that I have heard. The considerable reservations and hostilities in industry towards the central arbitration committee and ACAS arise out of the Labour party's unnecessary involvement of them in taking sides in industry during the 1970s.

The right hon. and learned Member for Monklands, East made much of the Labour party's care and concern on this subject. Indeed, the motion is tabled by the Labour party. The right hon. and learned Gentleman criticised the SDP and the Liberals for not attending the debate. As Labour Members point to the vacant alliance Benches, I wonder whether they can be so proud of their attendance to hear a debate on a motion which they describe as important.

Photo of Clare Short Clare Short , Birmingham, Ladywood

The hon. Member for Elmet (Mr. Batiste) has not been here all the time.

Photo of Mr Spencer Batiste Mr Spencer Batiste , Elmet

With respect, I have been in the Chamber from the beginning of the debate.

I shall concentrate on one aspect of the motion—the wages councils, which have already been referred to. The motion calls upon the Government to abandon its threat to abolish Wages Councils. Threats are not unhealthy when directed at institutions that have existed for a long time. They compel such institutions to re-evaluate their progress and usefulness.

I depart seriously from the tone of the motion because it makes no attempt to address itself to the real problems and difficulties caused by the wages councils. If, on any reasonably objective view, one were to take a sounding on the wages council from industry, one could not but be aware of the severe reservations and calls for reform on all sides.

So far hon. Members have spoken of wages councils as if they were one entity. In reality wages councils cover a number of different industries and different ranges of circumstances. If we are to debate the issue sensibly and decide sensibly whether reform or abolition is needed, we must accept as a starting point that the arguments may be different for the different wages councils. It is not necessary to generalise and treat all in the same way. For example, different councils create different atmospheres in their work. In some there is almost universal antagonism each year when negotiations come round and independent members merely cast a vote. In others there is relatively little hostility or aggression. In some the process of bilateral negotiation is extremely effective and the role of independent members is that of conciliator and bringer together of both sides.

My hon. Friend the Member for Bournemouth, East (Mr. Atkinson) referred to the composition of independent members. That is important. If one matter is clear, it is that the independent members on the whole — there are notable exceptions — lack personal experience of business life. One of the weaknesses of wages councils about which most criticism is made is the detachment of the independent members from the problems of industry.

A second criticism used to be much heard on the union side a few years ago. They said that wages councils inhibited the growth of bilateral, collective bargaining and as a consequence tended to institutionalise low pay. That argument was expressed by the unions 10 or 15 years ago. It is not used so much today because the reality of union bargaining has changed. A growth in collective bargaining has occurred in the industries covered by the wages councils. I make no apology for saying that if there is a choice between real collective bargaining and wages council, I should choose collective bargaining.

The third criticism is in relation to youth wages and the report some time ago in The Economist to the effect that youth wages as a proportion of adult wages are higher in the United Kingdom than in any other western country. I accept that that is not a manifestation confined to those industries covered by the wages councils. It covers a full range of industries, and over a long time has been a process of successful negotiation by unions. The problem is exacerbated in the wages councils area because of the restrictions and inhibitions those wages impose on Government schemes.

I have a letter from a very substantial employer, which covers my constituency, but not an industry dealt with by the wages council. The point of the letter is one that anyone involved in industry would readily recognise as being true across the board. I shall explain the letter's context later. The letter states: This leads on to the second point. In Leeds, some problems have been experienced with recruiting skilled tradesmen and though this seems surprising, given the level of activity in the Construction Industry, it is not uncommon. This could suggest that the Industry is simply not training enough people to secure its future, which is vital to the economic health of the whole country. That letter comes from Leeds city council, which temporarily is under the control of the Labour party.

Photo of Mr Spencer Batiste Mr Spencer Batiste , Elmet

I say "temporarily". The points made by that council are reflected by employers across the country.

Photo of Clare Short Clare Short , Birmingham, Ladywood

The hon. Gentleman makes an interesting point. Already, when we get minor upturns, industries are running into skill shortages. I understand that the construction industry has experienced that aspect in various parts of the country. That position co-exists with a Government who claim to be massively improving our training system. The reality is that the apprenticeship system is being destroyed and the youth training system does not provide proper training. Therefore, our young people are not being trained and, when there is a bit of an upturn, there are not sufficient skilled workers. I cannot see how that makes a case for abolishing wages councils.

Photo of Mr Spencer Batiste Mr Spencer Batiste , Elmet

I have not spoken of "the abolition" of the wages councils. I was trying to point out that different views can be taken of different wages councils. The letter is relevant to establish the fact that there has been a lack of recruitment of young school leavers and, hence, training of future generations of skilled workers, because of the level of earnings attached to such people and the lowering of the age at which adult wages are paid.

Photo of Clare Short Clare Short , Birmingham, Ladywood

The hon. Gentleman cannot say that.

Photo of Mr Spencer Batiste Mr Spencer Batiste , Elmet

The letter says that there is a major shortage of skills.

Photo of Clare Short Clare Short , Birmingham, Ladywood

It does not say anything of the kind.

Photo of Mr Spencer Batiste Mr Spencer Batiste , Elmet

If over the years the hon. Lady had been involved with a range of industries, as I have been, and asked them why those problems arose, they would simply say that they would not train and recruit young people because the cost was too high to justify the training.

Photo of Clare Short Clare Short , Birmingham, Ladywood

That is absolutely false.

Photo of Mr Spencer Batiste Mr Spencer Batiste , Elmet

The hon. Lady may disagree. We must agree to differ. I am trying to point out to the House and the Government the serious problem to which they must address themselves.

Fourthly, I do not believe that nationally fixed levels can accurately reflect what I believe is now a growing need for regional and local variations to meet different business conditions or differences between individual companies. We went through a period in which it became fashionable to have national negotiations across the board and, with the benefit of hindsight, that has proved to be damaging to our industries. The wages councils, in so far as they are a reinforcement of that process, must now be reassessed.

Photo of Mr Dale Campbell-Savours Mr Dale Campbell-Savours , Workington

Is any pressure being exerted on the Government by Conservative Members to introduce regional wage criteria in their industrial policies?

Photo of Mr Spencer Batiste Mr Spencer Batiste , Elmet

The hon. Gentleman should be aware that regional policy is open to discussion. It is certainly one of my representations that regional variations in nationally negotiated structures are an important aspect of regional policy. If the hon. Gentleman cared to broaden his horizons a little and read the magazine of the Small Business Bureau, he would see that I have written an article, a few weeks ago, on precisely that point.

Photo of Mr Dale Campbell-Savours Mr Dale Campbell-Savours , Workington

I hope that the Minister will ignore it.

Photo of Mr Spencer Batiste Mr Spencer Batiste , Elmet

My fifth criticism relates to the inherent differences between the organisations covered by a wages council, especially in relation to size, the number of locations in which they operate, and their trade union links. My point concerns whether there are effective collective bargaining arrangements. Any sensible arrangement for fixing wage rates should have a provision for contracting out, provided there is an effective collective bargaining structure to substitute. Where there is a minimum set of conditions across the board, there is no allowance for variations within those conditions. Values can be set and a package juggled in different ways to meet individual circumstances.

My sixth criticism of the performance of the wages councils is that they have introduced into employment patterns for part-timers a measure of inflexibility detrimental to the health of the enterprises in which they are employed and to the interests of the part-timers. There may or may not be agreement by Labour Members about the degree to which those criticisms are justified.

What options are open to the Government? There are three broad ranges of option. The first is the abolition of the wages councils, the deratification of the ILO convention when the window opens in 1985, and the acceptance that market forces could provide a better alternative. The second group of alternatives involves reforming the structure of the wages councils. The ways in which they could be reformed could be to exclude young workers, perhaps part-timers and organisations in which there is an effective collective bargaining process and in which both sides wish to contract out. The reforms could include the redefinition of the role of independent members and., I emphasise again, the introduction of some freedom to those enterprises, provided they are suitably organised in their collective bargaining structures to contract out.

A third option has not received a great deal of attention. It has been dismissed out of hand by most people involved. It may be something that the Government should consider. It is the introduction of bilateral collective bargaining with the enforcement of rates and conditions through statutory joint industrial councils. That is not a process that enjoys a wide degree of support on either side of the industry, but it is a process towards collective bargaining. I prefer to see the process of collective bargaining enhanced rather than the wages councils, which are a reflection of a more corporate view of society.

I have had fairly wide consultations on this issue. As the hon. Member for Workington has correctly deduced, regional policy is something about which I am concerned. This area is part of regional policy. Views vary in industry. The hon. Gentleman might accept the point that, from the employers' side, there are some companies that regard wages councils quite favourably. But, on the whole, few employers accept the wages councils' status quo. To enjoy any substantial measure of support, the status quo must be amended and reformed considerably.

Many other employers believe that the whole structure should be swept away as being long out of time. There are also many people who study the role of the wages councils and who take the view that if there is to be a choice between jobs and wages councils, it should be the wages councils that go.

I urge the Government, first, to deratify the ILO convention when the window opens in 1985. Unless that is done there is room for flexibility. Secondly, wages councils should be assessed not as a unitary group but on their individual merits. It should be ascertained whether they enjoy the support of both sides of the industries that they serve. The Government should have room to manoeuvre and for some flexibility if it is found that some wages councils enjoy that support. For some, if not all, outright abolition may be desirable, but any realistic review will show that at least major reform is needed. High-flown phrases about low pay do not begin to address the real problems or provide a solution to the serious, underlying position. I hope that the Government will take the earliest opportunity to commit themselves to action on this matter.

Photo of Mr Willie Hamilton Mr Willie Hamilton , Central Fife 6:51 pm, 15th February 1984

I find it not a little nauseating to hear a solicitor argue about low pay. Solicitors do not need wages councils. They can look after themselves and, by heavens, they do. They make Arthur Scargill and other trade union leaders look like kindergarten children when we see how they have things wrapped up.

The debate on low pay is part of the perennial political question about the distribution of the wealth produced by our workers. It might be as well to recall that I am old enough to have fought and lost—I may say—the 1945 elections. I remember quoting a remark made by Sir Alfred Mond who had been chairman of ICI. He said: Empty bellies are the only thing that will make Britons work. Having listened to the speeches from Conservative Members, I find that nothing changes much. The tenor of every speech, from the Minister to his Back Benchers, was pretty much the same. They voiced sentiments similar to those expressed by Sir Alfred Mond 50 years ago. The hon. Member for Bournemouth, East (Mr. Atkinson) said "Low pay is better than no pay." Those sentiments are similar to those expressed by Sir Alfred Mond.

The Minister—

Photo of Hon. Peter Morrison Hon. Peter Morrison , City of Chester

If I recall it correctly, Sir Alfred Mond was not a Conservative; he was a Liberal Member of Parliament who represented my constituency when he made that statement.

Photo of Mr Willie Hamilton Mr Willie Hamilton , Central Fife

The Opposition do not draw any distinction between Liberals and Tories. It is important to understand that.

The pressure upon the Government from Back Benchers to abolish wages councils is enormous. Before long, there will be no protection for those whom the wages councils were designed to protect—the lowest of the low-paid workers. The evidence is clear. The hon. Member for Bournemouth, East began by saying that his area had some of the lowest paid workers in the country. I am not surprised; Tory employers usually have that distinction, if that is how it is described. The hon. Member said that for those workers who have an element: of protection at least there is a wage floor below which they are not allowed legally to fall. Many employers, however, flout that law. He wants to abolish that floor.

My hon. Friend the Member for Birmingham, Ladywood (Ms. Short) asked the hon. Member whether any of the workers protected by the wages council legislation had made representations to him in favour of abolishing such protection. He did not answer. I suspect that he has not had one letter from a worker protected by wages council legislation asking for the legislation to be repealed.

As we expected, the Minister's speech was disgraceful. It was consistent. He began in his usual sanctimonious way by saying that the problem was one of comparison; that there is no poverty today; that people only think that they are poor because they do not have what the other fellow has, but that in any case there are so many safety nets—supplementary benefit, family income supplement and means-tested benefits of one kind or another. It stuck in my gullet when he said that both sides of the House were equally sincere in wanting to solve the problem, when the overwhelming evidence of the past five years shows the opposite.

The one thing that has become abundantly clear since 1979 is that the rich have become abundantly richer arid the poor have become very much poorer under this Government. That has been the direct result of the Government's taxation, privatisation and other policies. Let not the Minister dare repeat that Conservatives are sincere in wanting to get rid of poverty and low wages, when all their policies are designed to achieve the opposite. All outside objective observers point to that undeniable fact.

My right hon. and learned Friend the Member for Monklands, East (Mr. Smith) said that the Government were deliberately getting rid of the fair wages resolution and privatising to atomise trade union bargaining power. The Minister corrected me about Sir Alfred Mond. He will not correct me when I mention Lord Eccles. He was a prominent Tory Minister a few years ago. He said: Treat'em mean, and make'em keen. He was a Tory philosopher, and he was one of the wets. That is what the Government are doing now.

Let me give an example, as other hon. Members have, of how privatisation is giving some firms the opportunity to get their noses into the trough. With no fair wages resolution, they can do what they like. Union bargaining power is atomised. I have a good example that I shall put on record, and I have been trying to get an Adjournment debate on the case. A woman in Glenrothes new town wrote to me about a firm called Paragon Marketing Ltd. of 1A, Josephs Well, Hanover Walk, Park Lane, Leeds. British Telecom has chosen to deliver its Yellow Pages telephone directories through private companies this year, and has put the job out to private contract in Scotland. Paragon is a new company that has really been set up to cash in on British Telecom's move towards privatisation and, as it put in the last tender, it won the contract. The Post Office also tendered, but, because the Post Office pays reasonable wages, it could not compete with Paragon. Paragon put an advertisement in the local Glenrothes Gazette asking for workers. There were unemployed people, desperate for a few pounds before Christmas. My constituent replied to the advertisement, and was given an appointment with a supervisor. Paragon told her what the job involved. She was to deliver 750 Yellow Pages directories, using her own car and buying her own petrol. She had to deliver the directories in strict accordance with a three-sheet directive. Every night, depending on how long it took her to distribute the 750 directories, she had to telephone the supervisor to say how many she had delivered and, if she had not delivered the right amount, why not. If for any reason she had not fulfilled the exact terms of the contract, Paragon laid down that it could take back, or refuse to pay, the wages. That woman had to pay for her car, the insurance of the car, the petrol and telephoning the supervisor. At the end of three-and-a-half to four days of delivering the directories from her own car, she was entitled to £41.

I quote from the distribution instructions of Paragon Marketing Ltd.: Where a directory is not required for some reason you must clearly state the reason on the address card and mark the top left hand corner with a 'D'. If you do not record the reason a sum may be deducted from your payment. It continues: failure to telephone"— which means telephoning each night after making the deliveries— will make you liable to a deduction from your final payment to cover the cost of the supervisor ringing you". Under the paragraph headed "Quality Control and Payment", it continues: Only when those checks prove conclusively that the work has been carried out correctly will your cheque be sent through the post. Cheques will be sent out between 15 and 25 working days after you complete the contract. Slave labour is back in this country with a vengeance, and one of the purposes of privatisation of the services is precisely that: low pay is better than no pay.

I took up the case with the Minister, and with the firm. In a letter dated 23 January 1984, Paragon said, it is normal for payments to be made at the rate of £15 to £25 per day. That is a lie. My constituent received, or was about to receive, £41. Paragon promised to pay her before Christmas, and she has not received the money up to Christmas. She wishes her name to be kept anonymous, lest she receives no pay, and I still do not know whether she has been paid.

This is deliberate exploitation of a situation in an area which already has low pay and high unemployment, as Paragon knows very well. The private firms know where to get this kind of labour.

As I said, I took up the case with the Under-Secretary of State for Trade and Industry with responsibilities for corporate and consumer affairs, the hon. Member for Edinburgh, Central (Mr. Fletcher). He replied: I sympathise with her problem but as there is no evidence of fraud"— and there is no evidence of fraud, of course, because the firms keep just this side of the law— it is not an appropriate case for the exercise of my Department's powers of investigation under the Companies Acts. Your constituent recognises that she was a self-employed sub-contractor and not an employee, which would explain the non-deduction of National Insurance and tax payments. The distribution instructions forming part of her contract with Paragon seem harsh in some respects, as you point out, but the case is essentially a civil matter on which she should seek advice. The Government want nothing to do with these pirates. Poor people in areas of high unemployment and low wages are left to their own devices, and, if my constituent is exploited, it is nothing to do with the Government. It is no concern of the Government that these people are so used.

That is a good example of why the debate is necessary. The country is becoming a jungle, where only the rich survive. The problem will intensify in the coming years as more industries are privatised and unemployment increases, as it will do remorselessly. Poor people are at the mercy of unscrupulous cowboys who are operating with the encouragement of the Government. The low pay problem will intensify as a direct result of that. It is scandalous that the Government should wash their hands of the matter and pretend that the problem does not exist or, if they accept that it does exist, that it is the fault of the workers.

The Minister, who is well-heeled as the chairman of the Tory party, received a £5,000 pay increase under false pretences. This is the Minister who lectures the House and says that the trade unions shall behave themselves and modify their wage demands. He did not even submit a pay claim to get his extra £5,000 a year. The Minister should not lecture the House or trade union leaders about the need to modify their wage demands, failing which they will be out of work. Let us have no more of that nonsense from the Minister, or from any other hon. or right hon. Member on the Government Front Bench.

Photo of Edward Leigh Edward Leigh , Gainsborough and Horncastle 7:09 pm, 15th February 1984

Listening to the hon. Member for Fife, Central (Mr. Hamilton), I was reminded of what was written in the Journal for Economic Affairs:Like archaic railway stations threatened with closure, and ill-treated horses, low pay generates irrationality on a wide front.

I have listened to the debate, and I have waited to hear an objective analysis of the problem and what the Opposition intend to do. Low pay, like peace, is one of those concepts on which the Opposition expend floods of emotion and shed very little light. Low pay cannot be seen in the abstract. There can be no objective definition of the term. Wage rates — high, medium and low — are determined within specific legal, economic and political conditions, by negotiation and bargaining. In the last resort, that is what free bargaining is all about between individual employers and employees in competitive conditions.

I listened with great interest to the words of the hon. Member for West Bromwich, West (Miss Boothroyd). She spoke most movingly of the problems in her constituency. I represent the constituency of Gainsborough where unemployment is a problem. If the Opposition could tell me how to alleviate the problem, I would listen very carefully to them. I hope that Opposition Members will agree that, if wages are forced up too high either through union pressure or Government wage legislation, the predictable consequence must be bankruptcies and more redundancies. High wages that are not precipitated by consumer demand and productivity will raise labour costs. They will have to be paid for by higher prices, which will result in less investment and decreased competitiveness.

Opposition Members may not like it, but those are the economic facts of life — [Interruption.] If Opposition Members do not think that that is true, I shall tell them the facts. I hope that they will listen to what I am saying. We are, indeed, a low-earning country. The gross domestic product per head of population in Britain is $9,340 compared with $11,360 in the United States of America and as much as $15,920 in Switzerland. Therefore, it can be seen that we are a low-earning country. Let us consider how that situation arose.

Between 1960 and 1980 output per employee in manufacturing increased by 2·3 per cent. per year compared wth 4 per cent. for the OECD as a whole. By 1980, United Kingdom output per head was two thirds that of Italy and half that of Belgium. It was less than half the rate in Germany, Japan and Holland. Between 1960 and 1980 wages rose 2 per cent. faster in this country than in our seven major OECD competitors.

Between 1963 and 1980 unit wage costs doubled in the United States of America, Canada and Germany, but quadrupled in this country. Therefore, relative to our level of output and the decline in the competitiveness of British products, British wages simply grew too quickly. Thus there is an intimate connection between wages and employment levels. Over the past 10 years, there has been a rise in real hourly earnings and an increase in the number of jobs lost. In the United States of America, by contrast, employment has expanded by 17 per cent. while real wages have fallen. In other words, while we have priced people out of jobs, the United States of America has priced people into them—[Interruption.] That is true. I did not see any Opposition Member standing up to question the economic facts that I have just read out. They can read them for themselves.

What lies behind our decreased competitiveness and ultimately behind low pay? I believe that the closed shop plays a significant role in low pay.

Photo of Clare Short Clare Short , Birmingham, Ladywood

The hon. Gentleman has been claiming to give us a lot of economic facts. However, is he aware of the study commissioned by the Centre for European Policy Studies in 1983 on macro-economic prospects and policies for the European Community, which concluded that wage cutting would do nothing to decrease unemployment in European countries and that the major problem was a lack of demand?

Photo of Edward Leigh Edward Leigh , Gainsborough and Horncastle

I do not know how the hon. Lady or anybody else could deny what a Labour Prime Minister once said — that one man' s wage increase is another man's job loss. That must be right, and the hon. Lady cannot dodge that.

I believe that the closed shop plays a significant role in low pay. The essence of successful trade unionism—I do not disagree with what trade unionists are trying to do in this respect—is that the number of jobs available of the kind a union controls is restricted with the intention of artificially maintaining a wage for union members that is above the natural market level. That is what successful trade unionism is all about. As a result of closed shop arrangements, people who would like to obtain jobs at union rates but who cannot do so must search elsewhere. Therefore, the supply of workers for other non-union jobs is swollen, further increasing the tendency for wage levels to be lower than in the unionised section.

However, wage levels cannot be depressed below a certain level because of the existence, quite rightly, of a social security system that guarantees a minimum income—in effect, our minimum wage. As wages approach that level, workers tend to withdraw their labour. Those in that position who opt for the dole rather than for badly paid, non-unionised labour are described by some as the voluntarily unemployed. Perhaps, as Professor Minford has written, they should be described as being involuntarily forced out of the union sector by the closed shop.

Therefore, closed shops are not just a moral issue, but artificially decrease the material living standards of those who are not fortunate enough to belong to the exclusive brethren who are allowed to join the closed shop. So there is nothing fraternal or egalitarian about the closed shop for the low-paid. Accordingly, I hope that my right hon. Friend the Secretary of State will decide to bring forward the date by when closed shop arrangements must be submitted to a democratic ballot in accordance with the Employment Act 1982. There could be no better news for the low-paid and unemployed than the demise of the closed shop and the creation of a free labour market that operated like any other market, according to the free interplay of market forces. Thus, the closed shop plays a role in the creation of low pay.

Opposition Members compound the illusion that trade unionism is in the interest of the low-paid with advocacy of minimum wage legislation. The experience of Great Britain's 26 wage councils and the effect of the minimum wage laws in America—about which we have heard very little from the Opposition — offer examples of misguided state intervention. It is ironic that minimum wage regulations are justified in the name of giving people a fair deal. They have done just the opposite, particularly for young people.

By reducing the differential between the minimum rate for young workers and the adult rate, those regulations have helped to price young people out of the market. I have not yet heard how the Opposition meet that argument. The National Institute of Economic and Social Research reported in August 1983 that British apprentices were paid 60 per cent. of adult wages at the start, compared with only 20 per cent. for their German and Swiss counterparts. In other words, they were being priced out of the market.

Regulations not only hit the prospects of young people wanting to learn a trade, but often deny them the opportunity to earn holiday money. A constituent of mine has sent me an example. Last summer, he wanted to employ six young people to work on his camping site. He offered them £45 per week and they were happy to accept it. However, an inspector, after investigating, insisted that my constituent pay the youngsters £10 more a week. In the end he could afford only to keep three of them. That example shows the disadvantage of forcing employers to pay a certain wage to young people.

The Opposition have told us that a low-paid job is not better than no job at all, but surely for a young person a low-paid job is better than no job at all. It provides crucial moral and psychological rewards, and offers young people the opportunity to learn independence, and gain experience and skills. The self-proclaimed spokesmen for the low-paid on the Opposition Benches are often, in effect, their opponents. Minimum wage rules discourage the creation of jobs in other ways as well. Dynamic firms are denied the opportunity to operate in the free market and to undercut their rivals, and in the long run benefit both the consumer and their employees. Every time a wages council decides to up the minimum wage, a small business somewhere is forced to cut staff so that it may survive. Therefore, the Government must act as quickly as possible to abolish wages councils.

What can be done to help the low-paid? The Government must continue their economic policies. They should increase the threshold at which people pay tax; this would be a real incentive to work and would reduce the poverty trap. The Government must continue counter-inflation policies which are helping the low-paid and helping to get Britain back to work.

Photo of Gordon Brown Gordon Brown , Dunfermline East 7:21 pm, 15th February 1984

The importance of this debate is that it gives the House and the country an opportunity to determine whether the Government, having abandoned full employment as an objective, have also abandoned the concept of a national minimum standard of living, a wage below which no one should be permitted to fall. The evidence so far from the debate is not encouraging; indeed, it is alarming. Having stood by as more than 3 million citizens have lost their jobs, the Government are in the process of removing the safeguards which protect the rewards of those of the work force who still have jobs.

The reason the Minister gave earlier was that wages must fall not because workers are inefficient or unproductive but because the low-paid must pay the price for the failure to secure economic recovery. In other words, the most vulnerable, the poorest paid, must pay the price for the Government's mismanagement of the economy and their failure to get things moving and to get the dole queues reduced.

I should like to give one example of a number of women cleaners employed in a naval establishment in my constituency. Three years ago they were earning what was called the Government's worker's rate. At today's prices it would have been £2·19 per hour. By last year their wages had been cut to £1·71 per hour. On 8 January this year they were sacked. On 9 January they were re-employed, only after accepting a cut in their holidays, working conditions that their employer admitted were less than satisfactory, and an hourly rate of £1·50. These women have seen their wages fall by 69p per hour over three years. Their weekly wage would have been £32·90 in today's terms and now they are receiving £22·50 for a 15 hour week—a 32 per cent. cut. Why?

The first change arose because of what it is fashionable to call privatisation when commercial cleaners were brought in to take over the contract from the Ministry of Defence. The second change came from the rescinding of the fair wages resolution, first passed by the House in the 1890s and strengthened since the second world war. Harold Macmillan, then Mr., called that measure the protector of the standard of living of workers and also of the standard of competence and honour of industry as a whole.

These women's losses are not an isolated phenomenon, as wage cuts in money terms and real terms are becoming as commonplace in 1984 as redundancies were from 1979 to 1983. I estimate that there are 10,000 low-paid workers in my constituency and 40,000 in the county of Fife. They are low paid in the sense that they earn less than £85 or £90 for a full week's work. That is below the standard recommended by the Council of Europe and the International Labour Organisation. It is only marginally above the Government's own poverty line.

In Scotland 600,000 men and women earn a weekly wage below £90. Were it not for the hours they work in overtime, that figure would be 750,000, or one in every three men and women in the Scottish work force. That is the consequence of nearly five years of Conservative Government. In all, more than 1 million Scots, half the work force, are in poverty either because they are on the dole or because, although working, their wages have been forced down to poverty level.

For Britain as a whole the problem is very serious indeed. Poverty wages are earned by 7 million. One person in every four who is in poverty earns his or her poverty. For every 10 who were low paid in 1979 there are almost 15 in 1984. The Government who bear responsibility for these appalling figures tell us that the low-paid are merely unfortunate and that there is nothing they can do other than force their wages down further. Are these unfortunate people on low pay simply because they are taking a share of the sacrifice that has been forced upon all of us? That is not the case, not when the earnings of those at the top of the wages league have increased by about 40 per cent. since the Government came to power.

In the Government's view, low pay is for the lower-paid—and the lower-paid only. Can we dismiss the low-paid as unfortunate but temporary victims of the Government's drive for economic recovery? No, we cannot, because there is no evidence that economic recovery is in sight. The Minister could not produce any evidence of that. The overwhelming evidence is that the Government will let low pay go on and on. They have decided that low pay is not the problem but the answer and that the nation or, more precisely, a large part of it will starve and shiver rather than spend its way back to prosperity.

Having in the last Parliament brought about the conditions to force down wages, to create a reserve army of labour, to strip trade unions of established rights and to lower the social security safety net, in this Parliament the Government are pushing wages down ever further. Despite all the talk of rewards and incentives, the Government's strategy for the majority of the work force is to lower pay. The tactics have been to end fair wages in public service contracts, to put pressure on wages councils to cut the going rate, to reduce by one third the number of inspectors, to set the lowest pay rate imaginable for school leavers on training schemes and eventually to abandon wages councils altogether. Almost every piece of employment-related legislation upon which the Government have embarked reflects this dogmatic and vindictive obsession with cutting wages.

Let us consider privatisation which has been mentioned by my hon. Friend the Member for Fife, Central (Mr. Hamilton). Publicly the Government's talk is of injecting competition into industries or services dominated by monopolies, but privately, as the former chairman of the Conservative party let slip, their real objective is to break national wage agreements and to throw low-paid workers to the mercy of an unregulated labour market.

In regard to trade union reform, publicly the Government's talk is of handing trade unions back to the members and of having democracy thrust upon the trade union movement, but privately, as the Foreign Secretary said, the trade union legislation is to be—and I quote his words carefully— valuable in the long term in keeping down wage levels. That is the real objective behind trade union reform.

Let us consider the various youth training schemes that have been mentioned today. Publicly Ministers talk as if they wanted to give school leavers the best possible start in life, but we know that the real objective of these schemes and the wage rates that are set is simply to cut young people's wages and expectations. How else are we and the public to understand the logic of the young workers scheme mentioned today under which employers are to receive a subsidy only if they pay to the 16, 17 and 18-year-olds, whom they would have employed in most cases anyway, wages of less than £43 per week?

In their published election manifesto, not the secret one, the Government came clean on their attitude to low pay; they said that measures are necessary to ensure that Wages Councils do not reduce job opportunities by forcing workers to charge unrealistic wage rates, or employers to offer them. Unrealism is very much in the eye of the beholder. Let us look at those unrealistic wage rates which, if the Government have their way, must fall as a result of their policy: £42 for a fully trained hairdresser, or £8·40 a day; £54 for a full week's work in textile manufacturing, or £1·65 an hour; and £67 for the most experienced shop assistant, or £1·72 an hour. Is that what the Government mean by "realistic" — to have children sent to school hungry and ill clad because their parents cannot earn a living wage, no matter how hard they work and how many hours they labour? Is that what the Government mean by realistic—to deny to millions the clothes and food they need, the occasional celebration, even at Christmas, and the holidays that many of us take for granted, because £50 is an unrealistic demand? Is that what the Government mean by realistic — to make the miseries and uncertainties of poverty a life sentence for millions and a constant threat, if not a near prospect, for millions of others?

The true unrealism is the Government's blind pursuit of a solution in monetarism that cannot and will not work, a huge and cruel laboratory experiment, painless to some, but an experiment inflicted on the most vulnerable and poorest paid members of the community. It is all designed to test the theory—for which there is no evidence—that people can price themselves into jobs which simply do not exist.

Where is the evidence—the Minister could not give it — that 3 million workers could somehow be reabsorbed into the labour force under present conditions if they accepted breadline pay packets and the Taiwan working conditions about which the Secretary of State for Trade and Industry talks with such approval? Where is the evidence—when there is, on average, only one vacancy for every 150 men and women who seek it in my constituency—that there are jobs for the asking if only the price is right? Where is the evidence—when the value of unemployment benefits, set against average wages, is now the lowest for 50 years—that workers on the dole are somehow making unrealistic wage demands?

If so far no amount of unemployment, poverty and wage-cutting has conjured up an economic recovery, and if the consensus of economic opinion in Europe, Japan and America is that it never will, where is the Government's evidence that wage-cutting this year, next year or the year after will create jobs?

The Government say, and the Minister suggested, that there is proof, yet all that the Government can point to is an obscure, and at best controversial, Department of Employment working paper that turns all previous consensus on the matter on its head and alleges that 70.000 jobs could be created if young people accepted a 20 per cent. cut in their wages. But what is admitted, only in passing, in that report is that most of these jobs would first be taken from the adults who hold them but whose wages are higher. Is that what the Government mean by economic realism—to kick one group of loyal and long-serving workers out of the factory gates to make way for rawer, cheaper and more desperate replacements'?

The Government are obsessed with labour costs and the cutting of wages. That is the purpose of monetarism. But in the real world, are not things rather more complex? Is the running of a complicated industrial society not too important to be left to the economics of the saloon bar? Is it not remotely possible that it is the rate of exchange internationally, and not the rate for the job at home, that has consistently priced our goods out of the export markets? Is it not conceivable that inadequate investment, rather than excessive wage costs, is the greater barrier to industrial recovery?

Has it never occurred to the Government that low demand for our goods is the real problem facing every factory throughout the country, and not supposedly higher labour costs which are, in fact, now among the lowest in Europe? Indeed, is it not possible that low wages are simply postponing our industrial recovery because they are diminishing the workers' ability to buy goods in an economy that depends on mass purchasing power to survive? Thus, could it not be that poverty pay is not the way things are or must be but simply the way the Government have made them?

If the Government will riot listen to the Labour party in this matter, will they listen to what the public are saying, for one opinion poll after another has shown that the people of Britain are more concerned about poverty and are more intolerant of injustice than the blinkered and M3-obsessed faction now holding sway in the Government?

If the Government will not listen to the public, will they listen to their former leaders? Will they not take into account the considered views of almost every leader, before the present one, of the Conservative party, who consistently argue that decent wages make for an efficient, contented, productive and stable work force? Apart from setting up the wages councils which the Government are now planning to abolish, Churchill said something that the Minister is today turning on its head. He said that decent conditions made for industrial efficiency and increased, rather than decreased, our competitive power.

What has become of that great and, we were told in the past, humane Tory ideal of one nation? Disraeli's concept of one nation, I should remind newer Conservative Members, was nothing to do with immigration or race. Disraeli was concerned with the gap that he saw between rich and poor, a gap still with us and widening every month and year that this Government are in office. This Government have recreated the two nations that even Disraeli sought to make one, victimising the weak, raiding the incomes of the poor, abandoning any commitment to social justice and discarding all concern for abolishing poverty, all in the name of monetarism which, even at its best, is greed served up as ideology.

Photo of Mr Peter Thurnham Mr Peter Thurnham , Bolton North East 7:37 pm, 15th February 1984

I welcome this opportunity to speak on the problems of low pay, although I shall direct my remarks to reducing unemployment and improving productivity because, as several of my hon. Friends have said, only by increasing productivity can we increase real pay.

In the town of Bolton 17,500 people are unemployed and over 35,000 householders are dependent on benefits. The problems of low pay have not caused the level of unemployment. That has been created by decades of poor return on capital, especially in manufacturing industry, on which Bolton has historically been particularly dependent.

The published figures on return on capital in manufacturing show that real returns in the United Kingdom fell from nearly 20 per cent. per annum in 1955 to a mere 2 per cent. per annum in 1980. It is the capitalist's pay that has fallen to too low a level, because over the same period the share of wages in relation to profits in manufacturing rose from 72 per cent. to 92 per cent. We should tonight be discussing the problem of low pay for industrial capital, because that is the key to increasing real wages.

The way to increase productivity is to reduce interference in the market, and the success of this Government's policies on that is evident from the recent levels of productivity increases shown in the Chancellor's last statement. The figures for the last three years show an increase of nearly 3 per cent. per annum for the economy as a whole and nearly 5 per cent. per annum for manufacturing industry.

In trying to trace the effect of increasing productivity on the future level of employment, the one area where the greatest improvement in productivity is needed is with the economists themselves, for I understand that no economic model has yet been designed which satisfactorily relates productivity changes to employement changes. The Chancellor stated that increased productivity should lead to lower unemployment, but it appears that no economic model has yet been built to show this.

From my experience of my other marginal constituency, I find that I have been able to build up employment in my own business by becoming more, not less, competitive, and that if I raised wages without an increase in productivity, we should all be out of a job. The recent resurgence of interest in small businesses is bringing that point home to more and more people. It was a failure to understand it in the past which led to so many large firms having to cut back, and so many people thinking that they can get more money without more output.

Although 3 million people are unemployed, the directors of British Aerospace tell me that they cannot recruit the skills that they need in order to compete in world markets. How will minimum wage levels solve that problem? We are living in cloud-cuckoo-land if we believe that export customers will pay more for goods than the price set by world levels.

I seek real solutions to the problem, not make-believe solutions. I endorse the amendment proposed by my hon. Friend the Minister of State.

Photo of Mr Terry Fields Mr Terry Fields , Liverpool Broadgreen 7:42 pm, 15th February 1984

It will not escape the attention of those who listen to this debate or read about it that, time after time, on matters affecting working people and their lives and living conditions, Conservative Members come down fairly and squarely in defence of big business interests, and that it is the Opposition who have the real interests of workers at heart. When the Government speak with crocodile tears in their eyes about the needs of working people and in particular the low-paid, they expose the hypocrisy that is part and parcel of their philosophy. The main protagonist of their views has just returned from Moscow to give us the benefit of her experience and the views of Mr. Chernenko.

It was another Russian leader, Vladimir Ilyich Lenin, who said that an ounce of experience is worth more than a ton of theory. When the philosophic voyeurs on the Government Benches tell us what is best for us, we do not need to be lectured, because an ounce of experience is worth a ton of theory.

Perhaps I should declare an interest. In 1977, when I had spent 20 years working as a fireman, my family and the families of other firemen qualified for family income supplement, free school meals, and all the other social security benefits that had been introduced by a Labour Government. Pride stopped us asking for them, but we fought in the strike of 1977–78—as only trade unionists and workers can fight—to improve our own conditions. It is by our own hands alone that we have improved the lot of ordinary working people. The rising tide of poverty outlined in the Child Poverty Action Group's pamphlet shows that the Government's efforts to keep down unemployment by keeping wage rates down are failing and that, as usual, it is those least able to defend themselves who suffer worst.

Women and youths are at the sharp end. Statistics are meaningless unless they are applied to people in real physical terms. Let us compare the wages of male and female low-paid workers in the hotel and catering industry. Of the males, 54 per cent. earn less than £100 a week, and females in the same industry get £89·4 a week. The Government should think about that. When Conservative Members enjoy sumptuous meals in places around London, they should remember that the people waiting on them and skivvying for them earn less in a week than the cost of the meal that is devoured before their eyes.

The Government's new earnings survey gives the figures that ought to be rammed down the Government's throat. Almost 75 per cent. of women manual workers earn under £100 a week, and 50 per cent. of white collar women workers earn under £100 a week. Those women are full-time workers—they are not earning pin money, as was traditionally claimed. They include women workers in Liverpool whose earnings are often the sole support of families in areas of high unemployment. Crawfords is closing down, and that will mean that another 1,200 workers will be thrown out on to the stones. The British American Tobacco factory is under threat. Another 1,200 workers, mainly women, are involved there. Both male and female manual workers suffer from low pay.

The Government pay lip service to youth, but the crimes that they have committed against youth cry for vengeance. Youth is the future of any society, but today's young people have no future—only despair and anxiety, day by day. Young people are being used as a battering ram to compress wages rates for all workers, and their potential is being destroyed.

If the youth training scheme payment of £25 a week had kept up with average earnings since 1979, it would now be £38 a week. It is deliberate Government policy to keep those wages down, to beat other workers into submission.

In the past decade, 50 per cent. of all apprenticeships have gone. Engineering was the hope of our industrial base, yet an even higher percentage of engineering apprenticeships has been lost. That is no coincidence. A year ago a leaked document appeared in Time Out that made the reason plain. It said: Young people on YTS would receive a modest allowance well below the normal wage. It would be possible to prescribe a lower training wage for those being trained by the employer (including apprentices). This would be a means of achieving a particularly desirable objective — the lowering of training wages—which is … unlikely to be achieved voluntarily. Furthermore, advisers to the Government believed in 1981 that there was a need to extend the differentials between trainees—who are in some cases doing the jobs of the trainers—and other workers.

What does that mean in human terms? Marconi used to have 36 apprenticeships every year. Now there is not one. Instead, there are 51 YTS workers. In electrical contracting firms, apprentices' wages have been cut from £41 to £27·88 a week, while YTS workers—in some instances doing full-time jobs—are employed, and other workers are psychologically battered into accepting reductions in wages. That creates meagre living standards for them and their families. The Government's own figures, and answers given by Ministers about YTS, show that young people's wages as a proportion of adult wages have dropped by 8 per cent. for males and a staggering 12 per cent. for females. Between April 1982 and 1983 young men's pay rose by only 1·8 per cent. compared with 8·3 per cent. for adult males. Young women's pay rose by only a third of the rise in adult females' pay. So much for the Government's concern for youth. The crocodile tears that they shed do not deceive the young people of this country.

Let us compare the position of the low-paid in this country, in particular women and young people, with what is happening at the other end of the earnings spectrum. There could be no greater contrast than that between the top-paid directors and the low-paid who are dependent on state benefits. The Labour researchers' fourth annual survey of top directors' pay points out that six directors receive more than £250,000 a year and 28—all men—receive more than £125,000 a year. Between 1979 and 1982 inflation rose by 49 per cent. The average earnings of male manual workers rose by 43 per cent. — six points below the rate of inflation. At the other end of the scale, the wages of the 28 highest paid directors rose by 93 per cent. In 1979, the highest paid 28 directors made as much as 568 times the average wage of the male manual workers whom they employed. By last year they were making 767 times as much as those employees. By cutting tax rates the Government have put more than £1 million directly into the pockets of those top men.

Photo of Dennis Skinner Dennis Skinner Member, Labour Party National Executive Committee

Do my hon. Friend's figures show that Lord Harris has now joined the board of Eddie Shah's team at the Stockport Messenger or how many thousands of pounds he receives for a few days' work a year? Is there any reference to the suggested fee for the Liberal party leader for being part of an agency known as Prime Performers Ltd. touring the country giving one-night stands of a so-called non-political character and picking up £800 a time on top of his salary? I do not know whether those facts are included in my hon. Friend's statistics, but they are absolutely correct.

Photo of Mr Terry Fields Mr Terry Fields , Liverpool Broadgreen

My hon. Friend's intervention illustrates the divide between the haves and the have-nots in society. The increasing prosperity of the top directors and the decline in living standards of the poor is a political issue. The Government have legislated to increase the divide between rich and poor. By reducing the highest tax rate on earned income from 83 per cent. to 60 per cent. the Tory Government of 1979 increased the potential of the rich to bring home even more money.

In 1983 the Government changed the method of calculating the increase in retirement pension due to be paid in November of that year. That piece of meanness will cost a retired couple £1·20 per week. The tax concessions to the 28 top directors would be enough to pay 33,000 pensioners for a full year the amount to which they would have been entitled, but in Britain today luxury for the 28 comes before the needs of the 33,000.

Last year a director who received a 21 per cent. pay rise became Britain's first company director to be paid more than £500,000 from director's fees alone. The alliance has put down an amendment to our motion, but David Sainsbury, one of its leading members, last year reaped a reward of almost £5 million for his services to the community. Those facts speak for themselves. While the rich minority get richer, what are the prospects for the majority? There is the demoralising effect of redundancy. Wage demands are being kept in check to the point of poverty. Increasingly, suicide is the only way out for whole sections of the community. The economic nightmare of the capitalist system and its Tory defenders mean that 50 per cent. of suicides are among the unemployed. People unemployed for more than a year are 19 times more likely to try to kill themselves. Forty per cent. of people appearing in court are unemployed and they exist on 40 per cent. of what the employed are paid. They are six times more likely to batter their children and twice as likely to get divorced. Those are not my figures. They are statistics in a survey carried out for New Society.

Against that background of deprivation, the so-called pundits and financial gurus wondered what the hell was going on towards the end of last year when there was a boom in spending. That boom was fuelled by borrowing. People wanted to give their children at least the semblance of a decent Christmas instead of the abject poverty that they suffered for 51 weeks of the year. The need to borrow large sums of money led ordinary decent people into the hands of unscrupulous moneylenders, with loan sharks featuring largely in this trade in human misery. The banks were charging 9 per cent. interest on borrowing, but the unemployed could not borrow there because they had no collateral. The finance companies were charging 13 per cent., the trading cheque companies between 50 per cent. and 60 per cent. and the loan sharks had no limit at all. People were handing over their benefit books to cover borrowings for which they were paying through the nose. Press reports show that, when taken to court, some of the lenders were gaoled for 18 months for breaching four or five different laws, while their victims have to live in abject poverty for the rest of their lives. There are about 15,000 registered moneylenders in Britain. A small number of very large banks and loan companies dominate the market, but they will not lend to the unemployed or the low paid, who are forced into the murky pools inhabited by the loan sharks.

Two nations of workers have been created—those who command high rates of pay, and transient workers who cannot command decent wages and who are used by the Government and their supporters to suppress the living standards of ordinary working people. The solution to the problem evades the Tories. Where is the mystery? What is the magic reason why so many people are living in abject poverty and deprivation? There is no mystery at all. The system we live under has failed. It is bankrupt and corrupt and ordinary people are suffering at the sharp end. Conservative Members and the class that they represent cannot match the needs of the majority with the resources of manpower, plant and machinery and so on that exist in this country. The Minister's Alice-in-Wonderland outlook is nonsense. He stands at the Dispatch Box like a third-rate magician pulling statistics out of the air that have no relevance at all to the economy. British Leyland used to export 10,000 trucks per year and the commercial vehicle sector earned large trading surpluses. Last year this country's total trade in commercial vehicles went into deficit for only the second time in history.

The whole economic base of this country is in tatters because the Government and the people whom they represent refuse to invest the wealth created by working people—the unpaid labour of working people—in the interests of the people of this country. The Government's performance is further compounded in a projection by the stockbroking firm, Quilter Goodison, which has said that by 1988 this country's deficit in trade could be as high as £9·8 billion. The Government do not even understand their own system. They do not understand that they must invest in this country if it is to be competitive abroad. The National Westminster bank has said that £200 billion is needed for this country to challenge competitors abroad in new plant and machinery. A mere £5 billion has been thrown at the economy, showing that the Government have no faith in their own system and its ability to compete in the future.

In 1979 the Government lifted exchange controls. The non-bank private sector invested abroad £60,000 million of wealth created by workers by hand and by brain. The financial institutions of this country invested abroad £30,000 million from the unpaid labour of working people. Those profits were created by working people, not by the drones who exploit them or those whose patriotism relates only to private profit wherever they can get it while millions languish in poverty in this country. Anyone with an ounce of morality or conscience would not allow that to happen in this country and would not subject fellow human beings to such degradation and deprivation and to an almost subhuman condition of life. That is the nature of society today.

The Government, with criminal disregard for the effects of their policies, and a bankrupt political ideology, will eventually be brought to book by the millions of people subjugated and impoverished by them. People will wake up to the nature of society, and listen to the message of hope denied them by the bias and distortion of the media. The media are owned and controlled by the same people who are refusing to invest in our society, and who have beaten down the living standards of working people.

When the message of hope brought by Socialism to ordinary people permeates through, we shall see a change. British workers and their families will once again stand tall and make a contribution to their future, not to the riches of a few idle drones. The wealth that they create will not be squandered by a parasitic few, but reinvested in our industries, creating worthwhile jobs and giving people decent rates of pay that will give honest toilers a decent standard of living and our youth a future.

The duty of Socialist Members is to expose, and to explain to decent people outside the House, why things are as they are, and how they can be changed. For Labour Members, that means in essence the implementation of clause IV, part 4, of the Labour party constitution, giving to all workers, not just a few, by hand or by brain the full fruits of their industry … upon the basis of the common ownership of … production, distribution and exchange of our wealth.

Labour Members support the motion. I shall go further and say that a Socialist society is the only one able to resolve the problem of low pay. We cannot do that in isolation. Socialism raises the question of who owns and controls society's wealth. The Socialist prospect takes into society the means of production, distribution and exchange, and transforms that society into a democratic, Socialist society, planning and investing for the common good, cutting out profiteering. There is no other way. Anyone who tries to say otherwise is kidding the people; one cannot kid all of the people all of the time.

Photo of Peter Bottomley Peter Bottomley , Eltham 8:03 pm, 15th February 1984

Most hon. Members have enjoyed the speech made of the hon. Member for Liverpool, Broadgreen (Mr. Fields), and those who did not enjoy it have probably learnt much. If the hon. Gentleman is trying to explain what Socialism offers, this is not the right place to do so, as more than half of us were elected in opposition to those ideas and the rest presumably support the hon. Gentleman. What he has to say does not come as much of a surprise to any of us.

When considering low pay, we must start by remembering that the position of the low-paid, bad though it is, is substantially better than it was 25 years ago, and much better than it was 100 years ago. That cannot be said of many other countries, where people are living on lower wages and have a worse standard living than their predecessors. One has only to consider some of the world's trouble spots, such as El Salvador, and the position of many of those living in Southern Africa, especially those affected by drought or floods.

I am prompted by some of my hon. Friends to mention countries such as Poland, which, allegedly, has been operating for some time under a Socialist system. The people of that country did not have a high opinion of the achievements of their Government or the party system. On a number of occasions—

Photo of Mr Dale Campbell-Savours Mr Dale Campbell-Savours , Workington

The hon. Member for Eltham (Mr. Bottomley) refers to Poland as a Socialist country. Socialism cannot exist without democracy. Poland was never a Socialist country.

Photo of Peter Bottomley Peter Bottomley , Eltham

If the hon. Member for Workington (Mr. Campbell-Savours) wants me to agree with him, I shall do so. I was merely saying that self-proclaimed Socialists say that Poland runs along lines that few in this country believe we should follow. Like the hon. Gentleman, I believe that it is impossible to have a substantial increase in material standards of living for the low-paid, and others in society, without a flexible political and economic system. The trouble with most countries that declare themselves to be Socialist or state Socialist is that they do not have flexible economic and political systems. It is well worth—[Interruption.] I wish that the hon. Member for Workington would listen when I am speaking to him. It is well worth remembering the date 4 March 1984, when 750 people will be elected to the equivalent of this place in Moscow, without more than 750 people standing for election.

Photo of John Gummer John Gummer Minister of State (Department of Employment), Party Chair, Conservative Party

Has my hon. Friend noticed that Socialists in opposition can never point to a single Socialist Government whom they are prepared to support? Is it not true that every Socialist Government who call themselves Socialist are told by people here that they are not really Socialists? Would it not be nice if we were given a working example?

Photo of Peter Bottomley Peter Bottomley , Eltham

I agree with my hon. Friend. I hope that that agreement with my hon. Friend will help me to get preferments so that I can take his job, which I think I could do half as well as he does—[HON. MEMBERS: "Which job?"] The unpaid one.

Photo of Mr John Evans Mr John Evans , St Helens North

It is not an unpaid job. The Minister gets £5,000 a year for it.

Photo of Peter Bottomley Peter Bottomley , Eltham

It is good that, as a Member of Parliament, I earn the same as the hon. Member for Liverpool, Broadgreen (Mr. Fields). It is one of the great attributes of the House of Commons that ordinary Members of Parliament are all paid the same amount and can debate the topic of low pay from a similar position. The hon. Member for Broadgreen talked about people going out for expensive meals. That reminded me that I have most of my meals here, and that I lost a tooth on a House of Commons sausage roll, admittedly some time ago. Perhaps the sausage rolls have improved since then.

It would be better if it were stated openly in the Chamber that even if all the wages councils were abolished and there was no pressure for a minimum wage, many people would still be out of work. The influence of wages councils on pay levels does riot create unemployment, and there would still be unemployment if wages councils did not exist. We would not change that position if the wages councils were immediately abolished. Secondly, no pay increase of the kinds so far discussed would relieve all low-paid people of the need to supplement their income. Both those points must be stated openly. They are recognised and accepted by everyone. It saddens me that a debate can proceed for hours without the basic assumptions being openly put and accepted.

I do not have strong views one way or the other on wages councils. It is necessary, whether by legislation, commonly accepted arrangements, or general social pressure, to understand that there is widespread exploitation. That needs to be counteracted by whatever appear to be the most effective means. It is also important to recognise, as the hon. Member for Broadgreen said, that it is easier for employers, whether in the public or private sector, to employ more 16 and 17-year-olds at lower rates of pay. If the rates of pay are higher, fewer will be employed. The hon. Gentleman referred to a firm that used to have 36 apprentices and now has over 50 people on the youth training scheme. That demonstrates a fairly obvious point.

Photo of Clare Short Clare Short , Birmingham, Ladywood

This must be the tenth time—it is no coincidence — that the point has been made from Conservative Benches that if young people's wages were reduced more would be employed. There is a scheme that proves that that is not so. The Government pay employers, for taking on 16 and 17-year-olds, a subsidy of £15 a week—a considerable amount of money—if they will pay the young people less than £42 per week. Research commissioned by the Government has shown that the majority—about 70 to 80 per cent.—of the jobs that young people have would have existed anyway, the marginal increase in jobs is under 10 per cent., and those jobs have been taken from adults.

Photo of Mr Dave Nellist Mr Dave Nellist , Coventry South East

The figure is 6 per cent.

Photo of Clare Short Clare Short , Birmingham, Ladywood

I thank my hon. Friend. Therefore, that point has been made 10 times before and we have the evidence not just from research, but in practice.

Photo of Peter Bottomley Peter Bottomley , Eltham

The hon. Lady is keen to make her own point. I was picking up a point made by the hon. Member for Broadgreen, who said that one firm now had over 50 people on the YTS instead of 36. I do not need proof from a research study to confirm what the hon. Gentleman said.

It seems plain that if an employer believes that he can either give or gain benefit by employing a certain number of people, that is what the employer will do. I asked the Inner London education authority what it pays to 16-year-old school leavers. The figure is about £90 a week. The alternatives for the young person would be unemployment or YTS, with a lower rate of pay. One could suggest to ILEA that it would be worth while at the beginning to give those people half that amount, about £50 a week, so that twice as many people could be trained, gaining work experience and skills. As they gained more experience, they would have a better chance of being employed in their late teens and early twenties. That issue is well worth discussing. It would be useful if we heard the views of the hon. Member for Birmingham, Ladywood (Ms. Short) on that point.

Photo of Peter Bottomley Peter Bottomley , Eltham

The hon. Gentleman can make his own speech. I am putting forward a view that is eminently worthwhile. If we were to pay 16-year-olds £150 a week, fewer would be employed than if they were paid £50 a week.

Photo of Mr Dave Nellist Mr Dave Nellist , Coventry South East

I know of very few 16-year-olds who are earning £150 a week, but even if one accepted the principle that there should be a reduction in pay to share out the amount of work available, it is extremely unlikely that those at the top end of the scale—such as Members of Parliament or directors who are paid even more—would be willing to admit that fact. For example, director's salaries went up last year by 11 per cent. to an average of £20,000 a year. The youngsters and the low-paid are always asked to make the sacrifices, and that is wrong.

Photo of Peter Bottomley Peter Bottomley , Eltham

The hon. Gentleman leads me to my next point. I do not know how many hon. Members have created or run a business and have assumed the responsibility of deciding how many young people to employ and the pay that they should receive. Before I entered the House, I used to erect neon lights outside theatres and cinemas in the West End. I worked in the electrical business which had three rates of pay for the skilled, semi-skilled and unskilled. We made sure that we employed young people and decided that in time we would eliminate the semi-skilled rate. We decided that everyone would be sent on day release and would work towards the skilled rate. That was the simplest way of getting rid of the restrictive practices and job demarcation that, perhaps rightly, existed after the war.

Young people started on relatively low rates of pay, but within four years they were working towards the skilled rate. It reached the stage where the employees were asking whether their sons could work in the business, whereas previously, with the three fixed rates of pay, the unskilled stayed unskilled, the semi-skilled stayed semi-skilled and the skilled were top of the tree.

In the old days people did not want their sons working in that business and, indeed, they needed to obtain training before they entered. When that was changed, their sons began to come in — most of whom had not done particularly well at school. When they attended day release, they began to come out top of the class. When asked why they were doing so well on job-related training and experience they normally replied, "Because my dad, Ted the foreman and the tutor at the college have taken a substantial interest in what we are doing and, anyway, we can obtain the skilled rate of pay within a few years."

That was my personal experience. Other hon. Members may have had different experiences, but I suspect that, with practical involvement of deciding how many young people to employ and what training to give them, they came to the same conclusion as myself, which was arrived at after substantial discussion with trade union representatives and employees from the top to the bottom of the business. It was felt sensible to start young people at a low wage and to ensure that they got the work experience and training so that they could qualify for the higher rates of pay which were above the JIC rates.

That cannot be done in all industries or in all areas of the country. Even Ministers are unable to say that decisions of that kind will deal with the appalling employment prospects for many people throughout the country. Those decisions are appropriate in some areas, but we must also look to the general youth training scheme, improve it by all means and recognise that it is the best opportunity for many years for dealing with the young.

I wish to refer for a moment to those who are not young—those aged 20 onwards. It is not possible to give pay rises, with wages councils or without, to solve the problem of low-paid households, especially at a time when they have family responsibilities. Even though we have dramatically increased our standard of living since the war — we have more than doubled it — the problem still remains that in low-paid occupation take-home pay will not support two adults and children. That is why between the wars Eleanor Rathbone fought her battle to introduce family allowances. That is why we have converted the old child tax allowances into child benefit. Although I am unable to develop the argument that I would have made a year or so ago, it is perfectly plain that family income supplement and child benefit are needed to help even out family responsibilities.

Let us consider what would happen if we accepted that substantial pay increases for all the low-paid were necessary because take-home pay was insufficient to meet family responsibilities. We do not need a research project to tell us. We merely need to look back over the past 10 or 15 years. At that time the TUC was asking for a minimum wage, and the figure has steadily increased from £17 a week to £20, £30, £40, £60, £90 and so on.

Photo of Clare Short Clare Short , Birmingham, Ladywood

Two thirds of average male wages.

Photo of Peter Bottomley Peter Bottomley , Eltham

The hon. Lady talks about two thirds of national average male earnings. Has she calculated what would happen to the average if all those below two thirds were brought up to that level? At the time of the £1 plus 4 per cent. settlement and the various statutory or semi-statutory Government initiatives, we found that inflation hit the low-paid with family responsibilities harder than it hit other people. We need only look at the components of the RPI to see that most of the elements on which people may spend their real disposable income have risen in price by substantially less than the average, whereas those items on which they must spend their money have risen faster. For example, the price of things such as housing, fuel, food and children's clothes has risen faster than the price of such things as hi-fi's and whisky.

Therefore, the effect of raising pay as a way of dealing with family responsibilities has been neutral and counter-productive. We must all accept that and ensure that it will not happen in future. The fact is that pay increases as a means of dealing with low pay work only if we have a rigid incomes policy. Experience in the last 10 years shows that that does not work, however much some of us would like it to work.

The simple question with which we are left is whether we should pay no attention to low pay and leave it to free market forces. I do not believe that we should. There must be pressures, be they social, statutory or industry agreements, to ensure that serious consideration is given to the problem of those on low pay. There should be discussion on how much should be met by things such as family income supplement and child benefit.

We must consider also what can be done to alleviate changes in industry. There are movements of low pay between industries. Some industries, such as retailing and catering, are perennially low paid while others swing up and down the scale as a result of trade cycles and changes in the industrial complexion. About 15 years ago, we considered the west midlands to have the highest pay rates and the lowest unemployment. That position has changed dramatically. The industrial element must be part of the overall consideration.

I counsel my right hon. and hon. Friends to recognise that arguing for the abolition of wages councils may lead to temporary help to some hard-pressed small businesses, but will not solve the problem of how we create a thriving economy. Many countries have managed, without unrealistic pay increases, to give proper consideration to those who are low paid. They have developed the form of consensus — I cannot use a word such as "compact" because it is unfashionable—that recognises that the real task is to ensure that people can obtain employment, especially when they are young, so that they may start getting into the habit of developing skills and experience. Other countries have recognised that family responsibilities are in the main met by some form of social provision of the sort that we have been developing over the past 25 years. They have recognised that that is worth while. We shall not solve the problem by taking an ideological attitude on one side of the House or the other.

Photo of Clare Short Clare Short , Birmingham, Ladywood 8:22 pm, 15th February 1984

I am grateful to be given this chance to participate in one of the more important debates that we have had for some time —low pay and the deliberate policy of the Government to increase the number of those living on low pay. That is the reality. Let us have no weasel words from the Government to pretend that that is not so.

Low pay is not confined to injustice and inequality for a minority, for it goes to the heart of what is wrong with the Government's economic policies. How many people are affected by low pay? How large is the disadvantaged minority? There are 7 million—one third of the work force—who earn less than £100 a week. They comprise the working poor. Anyone who says that £100 a week is not poverty is living in the past. He or she is someone who does not do the shopping, does not pay the rent and does not attempt to look after a family. We are not setting a high standard, for to survive on £100 is extremely difficult.

There are various ways of defining low pay. My right hon. and learned Friend the Member for Monklands, East (Mr. Smith) referred to a number of different ways in which low pay has been defined. The Council of Europe has a criterion of a minimum decent wage. The Royal Commission on the distribution of income and wealth has given its opinion along with the TUC and the Low Pay Unit. The common figure is about £100 a week. The absolute standard, which might mean something to Conservative Members, of what a family with two children needs to earn in order to be on supplementary benefit level, which is calculated on the amount of money that is needed to survive at a low level, is £105·45. Therefore, £100 a week is by no means generous.

Poverty is relative. There are many in the world who are starving, and hundreds of years ago people lived less well than they do now. To attempt to dismiss relative poverty in our society is to understand nothing of what should comprise a decent society. We live in a world in which some people are generally cold and have to scrabble around to find enough money to buy sufficient food to feed their family. Very often they run out of money at the end of the week. They worry about the children getting bigger because they will not be able to afford new clothes. Yet there are many who live in warmth and comfort and run two cars. They go on foreign holidays whenever they feel like it. That is a disgusting society, and that is the kind of society in which we live.

Relative poverty is not about absolute starvation. Of course, starvation is a problem that exists in many parts of the world and there are some who should be addressing themselves to it who are failing to do so. Our problem is low pay, and that is what the motion is about. Unless we are willing to take action to increase the minimum wage, we are showing a preparedness to live in a disgusting society in which people are so crudely unequal.

About three quarters of the 7 million working poor are women. We have discussed the unequal position of women before in the House, and there is general apathy on the Government Benches. Conservative Members seem to think that women should stay at home and that they cannot expect, or should not expect, decent pay levels or a decent chance to make a contribution to society. Debates on women's place in society are occasions of great hilarity.

Photo of Mr Kenneth Hind Mr Kenneth Hind , West Lancashire

The hon. Lady is making a general observation. May I emphasise that there are many Conservative Members who regard women as equals in society, who happily give equal opportunity to them and open society to enable them to receive equal pay and equal opportunity?

Photo of Clare Short Clare Short , Birmingham, Ladywood

I am glad to hear that there is that minority on the Conservative Benches. I attend debates on women's issues and I assure the hon. Gentleman that there is a great deal of sneering.

Women's earnings are not pin money. Many Conservative Members believe that their earnings should be regarded in that light, but that is no longer so. Without women's earnings, four times as many families would find themselves in poverty on the subjective test of supplementary benefit levels and the level of income which is needed to survive. Women are the sole breadwinners in 400,000 families because their husbands are unemployed. One in 10 families is headed by a single parent who is a woman. If 'we put the two sets of figures together, women are the main breadwinners in one in four of all households. Low pay is predominantly a problem for women, although there is a significant proportion of low-paid men. That is not confined to single women or to women with no dependants. Women are making a contribution to poor households which would he even poorer without it.

Why should women, who are as intelligent and talented as men throughout the world, be a secondary kind of creature and accept lower wage levels and a reduced chance to make a contribution while in work? That is not good enough. We shall not have a decent society with proper mutual respect between the sexes without abolishing the problem of low pay. Low pay is the primary issue for women. If we can tackle the problem, women will have a more equal role throughout society and will make a major advance.

In discussing the low-paid, we are discussing a policy which has been formulated deliberately by the Government. We were treated to a most disgraceful speech from the Minister, who claimed to have compassion for the low-paid and to be concerned. He claimed also that there was no difference between the two major parties on the issue. The Minister represents the Government, who are deliberately encouraging low pay. The essence of monetarism is to use unemployment as a weapon to cut wages, and the Government's philosophy is built upon that notion. It is believed that in turn trade unions will be weakened, that workers will accept lower wages and that accordingly profits will be higher. That was argued by the Minister and the theme has been taken up by others. As the argument is developed, it is said that investment will increase, we shall achieve more efficiency, the economy will prosper and everyone will be well.

In practice, we see rising unemployment, an increase in low pay and none of the other things which Conservatives have claimed will follow. It is a policy that Labour Members reject as being immoral in any event, but we have learnt from five years of misery that it does not work and will not work. It cannot be seriously argued that the minor improvements that we are seeing in the economy in 1984 is the end of our problems. Every serious economic forecaster is predicting that things will get worse again in 1985. The indicators show that the claims that are made in the Government's amendment—they want us to believe that our problems are over, that employment will improve and that low pay will decline—are false and must be rejected.

The Government, as well as pursuing an economic policy that rests on the need to cut wages and, therefore, to increase the numbers of low-paid workers, have adopted a series of techniques to try to speed the process. Hon. Members have mentioned the Government's encouragement of privatisation. The purpose of privatisation in the public services is to cut wages. It makes no other sense. It is a method of reducing the already low wages in the public sector, which at least can be negotiated nationally, and giving tenders to those who pay the lowest wages. Thus, they constantly undercut the wages of those who must perform the jobs.

The Government have also adopted methods of reducing the wages of young people. It is interesting to note that Conservative Members have obviously been briefed on the matter, and have been told to say over and over again, "The solution to youth unemployment would be a cut in youth wages." They have no evidence for that, and study after study has shown that no movement in youth wages in Britain since the second world war explains the increase in youth unemployment. The Government have desperately commissioned studies to try to prove their case, but they have failed. The Government invented a youth workers scheme that deliberately cuts wages and subsidises employers to pay a low wage; even that has not generated more wages for young people. George Orwell described Dr. Goebbel's technique as the big lie. One tells a big lie and keeps on telling it so that everyone believes it. We could discuss the Government's report in detail, but it does not make the case that the Government wish to make.

The Opposition reject the Government's strategy of using unemployment deliberately to cut wages and to increase inequality. Their thesis is that that will make our society leaner and fitter, but in practice it is not working. We reject their use of the youth training scheme deliberately to try to reduce youth wages, and then to pretend to youngsters that they are being offered a fine training. In practice, they have deliberately destroyed the apprenticeship system instead of building on it. Their scheme is obsessed with the wages that it offers, and little else.

The Opposition reject the young workers scheme, because we believe that youngsters should be paid a decent wage. If it were true that more young people would work for a minimal wage, we must ask, "What is that wage?" Is it less than £25 a week? Are Conservative Members willing to put forward any decent minimum standard of wages for young people? It would seem not.

The Opposition reject the threat to wages councils and to the inspectorate, but not because we believe that the present system is perfect — far from it. At its conference, the Labour party committed itself to a statutory national minimum wage. We look forward to that, and to making a great advance in dealing with low pay. We realise that the Conservative party wishes to scrap the wages councils and to replace them with nothing. It is yet another lever and technique to reduce wages still further.

Ministers should not dare to tell us that they care. Not by their words, but by their deeds will we know them, as was once said. We know them from their deeds—from their deliberate cutting of wages—and they need not pretend that that is not so.

Photo of Mr Kenneth Hind Mr Kenneth Hind , West Lancashire 8:33 pm, 15th February 1984

One thing that is clear from the debate is that the Labour party believes that it has a monopoly of understanding of those who are worst off and who have not come from privileged backgrounds. There are many Conservative Members, whose fathers and grandfathers were unemployed, who have struggled in backgrounds that were not affluent—[Interruption.] This is the unacceptable face of Socialism. Labour Members will not accept that some Conservative Members have fought their way through greater deprivation than was suffered by many of them. Because of that, we can say that we understand and relate to those who are not well off. [Interruption.] Opposition Members do not want to listen; they would rather talk about it. Labour Members do not have a monopoly on suffering, although they frequently come to the House with bleeding hearts telling us, "We know all about it, but you affluent, fat-backsided capitalists know nothing about it." It is nonsense. It is what they would like the British people to believe, but, fortunately for us, the British people are not so stupid. The British people understand that the Labour party does not know everything about them.

Fortunately, Conservative Members care about the low-paid. I am not ashamed to say that my grandfather, who came from the back streets of Salford, did not work after 1933. However, my father fought his way from nothing to give me the opportunity to be able to sit in the House today. I am sure that many Conservative Members had a similar experience. The bleeding heart speeches from Labour Members make no impression upon me or many of my colleagues.

Photo of Mr Terry Lewis Mr Terry Lewis , Worsley

Will the hon. Gentleman give way?

Photo of Mr Kenneth Hind Mr Kenneth Hind , West Lancashire

No.

Many hon. Members have said that the Government's policies led to the problems of the low-paid, but as my hon. Friend the Member for Eltham (Mr. Bottomley) said, there were low-paid workers 25 years ago and 100 years ago. The low-paid are better off today when they ever were.

Photo of Mr Kenneth Hind Mr Kenneth Hind , West Lancashire

That is because of the realisation by Governments of both political parties of the problems of the low-paid. It is wrong and stupid to say that it is the Government's fault. That ignores the fact that other countries have been affected by the recession. There is unemployment in the United States of America—the most powerful economy in the world — in West Germany, and in France. They suffer from problems similar to those in Britain. It is significant that President Mitterrand, who was elected as a Socialist, began by implementing the sort of manifesto that the Labour party invited the people of Britain to accept in June last year. However, the people rejected it, and it is interesting that President Mitterrand has done an about-face and has adopted policies that would be more acceptable to the Conservative party. As a result, the French economy is beginning to pull round.

We were told in the debate that the Conservative party has a secret manifesto. It is so secret that no Labour Member has seen it, and certainly Conservative Members have not seen it. The hon. Member for Birmingham, Ladywood (Ms. Short) told us that the Government have deliberately created an economy in which the wages of the low-paid are reduced, and that unemployment has been created to establish the Government in power. Think about the sense of that. Britain is a democracy in which people examine the relative economic performances of Governments, and the money in their pockets. Then they think about how they will cast their votes. Will they vote for a party that deliberately sets out to destroy the economy and to lower standards of living? It is nonsense. It is another fairy story that the Opposition would like the general public to believe. It is about time the story was nailed. With due respect to the Opposition, it is rubbish and we should recognise it as such.

Let us consider the solutions that are being offered by the Opposition to the problems of the low-paid. They propose that we should have a minimum statutory wage of £90 a week. That is very commendable. If it were possible, I am sure that all hon. Members would support it. However, we have to take into account the economy and bear that in mind in making decisions. In 1969, when Mrs. Barbara Castle was Secretary of State for Employment, the Labour party had the opportunity to introduce such a measure, but it was rejected by Labour Members as being impossible to implement.

We have to remember the trade unions. One of the major policies on which the Labour party fought the last election was free collective bargaining. A minimum statutory wage involves a wages policy, which the Labour party rejects. It is not part of Labour's policy. The Opposition advocate that as one plank, but they do not accept it when it comes to a formal wage policy. They know that they are advocating something that the trade unions — the paymasters of the main Opposition party—will not accept. The trade unions will not accept a wages policy of any kind. Although Opposition Members may talk about it and advocate it in the House, they know there is no possibility of ever carrying it through in a statutory form. It is therefore nonsense and lacking in candour to advocate such a policy, and we on these Benches realise that.

When the deputy leader of the Labour party was recently asked about this proposal he said that it was out of step and did not fit in with his party's policy of free collective bargaining. It does not fit in with what Mr. Sidney Weighell said at the Trades Union Congress three years ago. He was advocating a wages policy, and he described free collective bargaining as the principle by which those with the biggest snouts get the most. He called them pigs at the trough.

If Labour Members give us lectures on a wages policy and a minimum wage, they should forget about free collective bargaining. They should examine the conflict in the argument. If I may say so, it is very much like the logic of the hon. Member for Liverpool, Broadgreen (Mr. Fields), whose arguments sounded to me very much like what one would hear at the fifth congress of the USSR Communist party. If what he said had been in Russian, it would have made as much economic sense to me.

We must consider what the effects of a minimum wage will be on the low-paid. It will. increase the cost to industry. As such, it will lower the competitiveness of industry and destroy the jobs of the very people that the policy seeks to help. One of the major arguments put forward by trade unionists in the 1970s — when they were looking for increases in wages—was that they wanted to restore the differentials that had been eroded by increasing wages paid to other workers. Inevitably, a minimum wage of £90 per week will lead to a rise in wages throughout the system, and that will increase inflation and wages by about 3 per cent. Inflation will lead to unemployment, and the people that the policy seeks to help will not be helped. They will lose their jobs, and will be worse off than before, when they were paid a lower wage, because they will be dependent on benefits paid by the state. That is the unacceptable face of the policy. It is nonsense to say to the general public that it is a policy that will work.

The hon. Member for Broadgreen told us about the money that is being paid to company directors. There are people in our society who get high wages, but they are a small minority. [Interruption.] Certainly barristers play their part in the system. They employ people. It might be, interesting to consider the number of people who are employed in banisters' chambers throughout the country. Certainly we in the legal profession do not pay low wages. I am sure that if we talked to banisters' clerks in London we would find that most of them were paid more than the average salary of a Member of Parliament. Perhaps on that basis we should join the low -paid.

We have to view the problem in the light of what the Government have done. It is all very well for the Opposition to say that the Government have done nothing about the low-paid. Since 1979, wages overall in this country have kept well ahead of prices. How do Opposition Members equate that with the idea of making people worse off? It does not tally. In 1978, having visited America, Mr. Callaghan told the Americans that the standard of living of the British people had been cut by 5 per cent. and that it was a magnificent achievement that we had been able to knuckle down and face the problems of recession. That is not what the Conservative party has done. The Conservative Government have kept pace with inflation and preserved the standard of living of people on low pay and pensioners. That is quite different from the policy that was adopted by the Labour party. One is judged by what one has done, not by what one says or what one would like to have done. One is judged by one's track record.

Opposition Members should consider the Government's record carefully. The Government have tried to beat inflation. Even the recently retired Leader of the Opposition has accepted that the way to improve the standards of living of the low-paid is to beat inflation. That is what the Government set out to do and have achieved. Inflation levels are down. That helps the low-paid. It does not provide the low-paid with the pay that they would like, but it gives them hope that things will improve.

Opposition Members should read The Standard tonight. The CBI is reported to have made a statement on the economy. The CBI is at the sharp end and its members take the risks. They are in a position to judge. They know what orders are coming in and they know their gross profit margins. Clearly the CBI has proved that the Government's policies are beginning to work and are pulling the economy round.

About 39,000 more people were employed this week. For the first time, things are beginning to move. The Opposition should not be sanctimonious about the low-paid. They should look at what is good for the low-paid. They should not talk about a policy that they cannot deliver. We have a policy that is beginning to work—and we have delivered.

Photo of Mr Harold Walker Mr Harold Walker , Doncaster Central

The Front Bench spokesmen have said that they are willing to exercise restraint in the hope that hon. Members who have spent so much time in the Chamber may be given the chance to participate. I hope that their restraint will not be ignored by hon. Members who wish to catch my eye.

Photo of Mr Dale Campbell-Savours Mr Dale Campbell-Savours , Workington 8:52 pm, 15th February 1984

The hon. Member for Lancashire, West (Mr. Hind) would do well to remember the custom, and that late in the evening other hon. Members are waiting to speak. His speech was interesting, but tragic. He seems to have forgotten whence he came. He has forgotten the poverty that he has left behind in Salford. His speech will be read by many people in Salford who will feel perturbed that a son of Salford has come to the House of Commons to preach to us in that way and to demand that further damage be inflicted upon them.

One of the more interesting speeches was that by the hon. Member for Elmet (Mr. Batiste) who deployed a well-reasoned, hard-line argument in favour of the free market. My hon. Friends and I listened to his speech with interest. The hon. Gentleman would do well to consider equally the position of the hon. Member for Bromsgrove (Mr. Miller), who can tell him that the free market in which he believes and subscribes to does not work. That is why he, as a Goverment Back-Bencher, has been at the forefront in demanding that there should be a Minister responsible for the midlands and a reversal in regional strategy to ensure that the midlands enjoys some of the benefits that historically have been enjoyed by other regions.

Photo of Mr Hilary Miller Mr Hilary Miller , Bromsgrove

My position was clear. My advice to the Minister was that regional policy should be phased out because it is not a help to industry, but that if they insisted on continuing that policy we in the west midlands demand to be considered on social grounds.

Photo of Mr Dale Campbell-Savours Mr Dale Campbell-Savours , Workington

The hon. Member for Bromsgrove makes it clear that he subscribes to interventionist regional policies. That is what he has just said by saying that if the policy exists he wishes to join the club. The Government have failed regionally and the free market is not working.

When we refer to low pay we should turn our attention to what is going on at home, in our own House of Commons. I have a wage slip relating to a person who works within 30 yards of this Chamber. He is not paid £25,000 or £35,000 a year, as are some Members of the House of Commons staff. As an attendant in the House of Commons car park whom we all pass every morning, he is paid the princely sum after tax of £68·89 for working 45 hours per week. He is one of many. He would be better off on the dole.

All the men who work in our car park have a gross pay of £97·79 per week. The pay for a 40-hour week is £86·94. The after-tax pay of the particular attendant would be only £60 a week for a 40-hour week. What is more disturbing about the wage slip is that the "tax to date" column shows that that car park attendant paid £1,138·50 tax in the current financial year. That is on a wage which I believe to be less than he would draw on supplementary benefit.

By checking the Official Report, that man will have seen references to concessions to the value of £3 billion for the better-off in the form of capital gains tax and capital transfer tax concessions. That wage slip is a symbol of our debate. It is the conclusive proof that every hon. Member needs that people in our society are being unfairly treated. Such people are here within the House of Commons.

I should like to think that these men, who earn an hourly rate of £2·17, will be the first to have the benefit of any changes in Government policy that might arise from tonight's debate. It is clear that whatever the definition of low pay—according to the TUC, the Royal Commission on the distribution of income and wealth, the Low Pay Unit or the resolution of the Council of Europe—the House is an employer of people who are paid a little more, or less, depending on the number of dependants, than supplementary benefit. That is wrong, but I am not saying that we can wave a magic wand and overnight transform the wage rate arrangements for millions of people. This is not a loony, east European state; it is a democratic society. In any democratic society, there will be inequality of pay. We have a duty to ensure that, wherever possible, we insulate people from the poverty derived from an unrealistic level of payment for their work.

The problem is that the Government are committed to free market principles, which will effectively remove the safety net for low pay. The Government will cut youth wages. They will cut public sector wages by keeping them at artificially low levels for many employees and then annually introducing percentage payments, which will only further deepen the problem of the spiralling inequality in the reward for work. At the same time, the Government will avidly abolish the wages councils. The Government have no perception of what poverty is about.

I shall read a letter from a person in my constituency, who sets out beautifully what we are talking about. This person is without work and receives a little more, or a little less, than many others in work. The letter states: I have written a letter to be read out in Parliament. My husband has been on the dole 3 years now. He is 50 years old and is not work shy as the Tories call the people up the North. There are no jobs to get and how many times have they to be told?Now my complaints for myself and 1,000s like me.

  1. 1. We haven't enough money to heat our houses.
  2. 2. Also we are not getting any extra bedding as Social Security say we are just allowed 3 Sheets and 2 Blankets so how can this help when the weather is very severe and bitterly cold?
  3. 3. We have to stay in the house as we have no footwear for this weather and we get on each other's nerves. We are just living on a thread and cheesed off with these conditions as they are not brought on by ourselves.
  4. 4. We don't smoke or drink. We just have the TV to depend on. We have no pets as we couldn't afford them.
I was watching World In Action when one of your M.P.s was trying to live on the dole money for a week which was a disgrace. He went in the pub for a pint and had to stand with an empty pint glass hoping someone would treat him, what a cheek. I wonder if he would like to live on dole money 3 years not being able to get furniture, bedding and the food you need in your tummies this weather to keep warm. Why do we have to suffer? We are all human beings and have a right to live as everyone else. We are going 20 years backwards. It is 1984 now and we should have a decent living. I think the Tory government has gone too far as the people who put them in are not expecting to be in this state. What is there to live for? We are on a point of breaking our nerves. That is a desperate letter, and there are millions of such people. The Government Assistant Whip, the hon. Member for Epsom and Ewell (Mr. Hamilton), laughed when my hon. Friend the Member for Liverpool, Broadgreen (Mr. Fields) rose to make his speech. The hon. Gentleman does not understand that much of what my hon. Friend said about living conditions in his constituency reflected conditions in constituencies throughout the whole of the United Kingdom. The Government cannot afford to put this subject aside and laugh. We are seeing real poverty. Many hon. Members will never understand that poverty because they have never lived in it. Those of us who have never lived in poverty have a duty, perhaps more than others, to ensure that society is helped to develop to protect those who are worse off.

The most disturbing aspect of the impact of poverty and low pay is its effect on families in terms of their expectations of life. In this society, fed by television and the media, expectations are naturally high. Where those expectations cannot be met, people who feel that they are their due will involve themselves in anti-social activity. Much of the crime wave derives directly from poverty. If this were a country without poverty, crime would fall dramatically. Everyone knows that.

Instead of investing in family security and support, we invest only in reinforcing the powers of law and order to further subjugate the people. That is not the way to resolve society's problems. We will resolve them only when all of us in the House, irrespective of political persuasion, understand that we have a duty to help and secure for our people the life that we have sought and know is their due.

Photo of Michael Lord Michael Lord , Suffolk Central 9:05 pm, 15th February 1984

I do not intend to enter into the Dutch auction on care and compassion. I do not find it constructive, and we should try to be a little more constructive.

Before I became a Member of the House, I ran a small business. I had to employ all sorts of people, particularly young people. I found it extremely difficult. On many occasions I wanted to take on young people when the business could not afford to pay them a great deal. They wanted to work. Pay levels and the rules and regulations made it impossible to take them on, thus denying them a job and also the opportunity to contribute to the firm and help it grow. They would have grown with it. That is extremely sad when we are told—and I think that it is right—that small businesses are likely to be one of the main sources of jobs in the future. Small businesses are hindered by rules and regulations, and jobs, therefore, suffer.

Wages councils have had a role to play but, at best, I think they are arbitrary, and, at worst, they may fix unrealistic pay levels which can be disastrous and cost a great many jobs.

Why is it impossible for us to trust people sensibly to deal one with the other? Some of the comments that have been bandied about the Chamber give us some idea of why. It is sad that we cannot trust employer and employee to deal fairly with each other without rules and regulations which so often destroy and hinder the jobs that we are trying to create.

Why must the state insist on being a mixture of wet nurse, fairy godmother and big brother? This has not proved constructive. These rules and regulations cost jobs. I can give an example in agriculture some time ago where women were employed part time. They were not earning much, but they were not working much. It suited them; it fitted in with their family arrangements. New minima were introduced that the employer could not afford to meet. The ladies lost their jobs and the employer lost useful labour. A satisfactory relationship which had existed for many years was destroyed. That is pointless and shows the damage that rules, regulations and minimum wages can cause.

It is not fair to say that we must have more pay without saying where it will come from. The Opposition say all the time in the debate that they want more pay for everyone, particularly the low paid, but they do not say where the money is to come from. I thought that the fact that we could not do that in our economy, without creating more wealth, had been accepted a long time ago not just by Conservative Members, but by the Opposition.

What is low pay? Is the miner low paid compared with the Fleet street printer? Is a bus driver low paid compared with a miner? Is a nurse low paid compared with a bus driver? These matters are all relative and, if we care in our pay bargaining for ourselves, we must surely consider others, too. I am sure that the answer for the country is for us to follow the present course, to keep inflation down as low as possible, to look after those at the bottom of the pay scale by maintaining the safety net as high as possible, and to do our best to improve everybody's lot by increased competitiveness and productivity in industry, and increased responsibility in wage bargaining throughout all sections of the economy.

Photo of Mr Ron Davies Mr Ron Davies , Caerphilly 9:10 pm, 15th February 1984

I wish to respond briefly to the points made by the hon. Member for Elmet (Mr. Batiste). He was advocating the argument set out in the White Paper "Regional Industrial Development". In the White Paper, the Government appeared to suggest that the cure for unemployment in the regions of Britain was to allow free rein to market forces. The White Paper on page 3 states: Imbalances between areas in employment opportunities should in principle be corrected by the natural adjustment of labour markets. If the people of south Wales understood that to mean that they had to have more unemployment to cure unemployment, lower wages to cure low wages and lower standards to cure low standards, and when they understood what the Government had in store for them, there would not be much singing in the valleys.

I refer next to the speech of the hon. Member for Suffolk, Central (Mr. Lord). The Department of Employment's official statistics show that approximately 7·5 million people are on low pay. The number in Wales is about 375,000. I wish to speak briefly about the plight of those people in the valleys of south Wales.

The Welsh Office provides a document giving an index of deprivation. That is the statistical basis used in the calculation of inner city assistance. In the key districts of west Gwent and mid-Glamorgan, the percentages of economically active people, those who are in work who are officially classified by the Welsh Office as being on low incomes, are as follows. In Blaenau Gwent, the constituency represented with distinction by my right hon. Friend the Member for Blaenau Gwent (Mr. Foot), the percentage is 34·3; in Merthyr Tydfil and Rhymney, it is 35; in the Rhondda, it is 34·5; in my district of Rhymney Valley, it is 29·9.

In each of those districts, almost one in three of the working population, according to the Government statistics, are deprived people. They are classified as groups on low incomes. That represents a catastrophe in general terms, and a disaster in terms of the region. The problems of those individuals have to be coped with in a deprived environment in which unemployment is becoming the norm, low wages form a substantial majority of incomes of working people, the environment is destitute, conditions are poor and educational standards are bad. That situation offers little hope, and it compounds the general problem.

I take issue with the argument advanced by the hon. Member for Elmet. He said that there had to be more unemployment to cure unemployment and lower wages to cure low wages. I wish to make two points. First, there is a direct correlation between high unemployment and low-wage occupations. I have been given some statistics by the statistical department of the Department of Employment in its new earnings survey. The figures apply as at 1 April 1983. They relate to wage increases for the 12 months up to 1983. In professional and related employment, the wage increase was 11·1 per cent. For accountants, it was 12 per cent. For estimators and valuers, it was 10 per cent. For finance, insurance and tax specialists, it was 15·4 per cent. For the same period, the figures for manual grades were as follows: gardeners and groundsmen 4·6 per cent., metal working production fitters 4·2 per cent., sheet metal workers 3·7 per cent., and for mains layers and sewer men 0·2 per cent.

If the argument is right that jobs can be created by low wages, why are there not more jobs for gardeners and groundsmen? If the argument is right that high wages destroy jobs, why are not all tax avoidance specialists, accountants, estimators and valuers on the dole? The answer is that that is a specious argument and does not hold water.

The hon. Member for Elmet argued that there might be more jobs if we were prepared to accept lower wages. However, the Department of Employment new earnings survey showed a direct correlation between high wages and high employment levels, and between low wages and high unemployment. In the year to April 1983, the average gross weekly earnings of full-time male employees in Greater London was £200. In January 1984, unemployment in that area stood at 10 per cent. In the south-east region, including Greater London, the average gross weekly earnings were £184·9 per week, while unemployment stood at 9·8 per cent.

Therefore, at the top of the scale we find high wages and low unemployment. However, at the other end of the scale the situation is reversed. In the northern region, for example, including Cumbria, the average gross weekly earnings are about 25 per cent. lower, at £159·3. However, the unemployment rate is about 70 per cent. higher at 17·7 per cent. In my region of Wales, the average gross weekly earnings for men are the lowest in the table, at £156·3, and the unemployment rate in January 1984 stood at 15·6 per cent.

Conservative Members and the Government must accept that their arguments are without foundation. If they propose, in their regional policy, to use the whip, fear and coercion of high unemployment in the belief that it will generate employment, some sense of security in the minds of those who live in the valleys of south Wales and the other depressed regions of Britain, as well as the serenity and ability to enjoy a complete life, they are mistaken. Those policies will lead to more unemployment, lower wages and more deprivation.

There is no law of nature or of God that says that people must be poor. There is no immutable law that says that poverty shall exist in our regions. The levels of poverty in my region of south Wales stem directly from the Government's economic policies, and from the way in which we organise our society. I therefore conclude that if we can organise our society in a way that encourages and spreads poverty, we can equally arrange it in a way that attacks and removes it.

Photo of Mr John Evans Mr John Evans , St Helens North 9:20 pm, 15th February 1984

I apologise to my hon. Friend the Member for Burnley (Mr. Pike) who has sat in the House for most of the debate but who, unfortunately, has not been able to catch your eye, Mr. Speaker. I hope that on a future occasion he will be more fortunate.

The most depressing speech today was that of the Minister of State in reply to my right hon. and learned Friend the Member for Monklands, East (Mr. Smith). The Minister denied that low pay exists. There is no programme to deal with low pay. There is not even an apology or an excuse for low pay. All we got from the Minister of State was a long diatribe justifying the fact that low pay has to exist.

The first three speeches from the Tory Back Benches—by the hon. Members for Ludlow (Mr. Cockeram), Bournemouth, East (Mr. Atkinson), and Elmet (Mr. Batiste)—were all based upon a scurrilous attack on wages councils. They were part of a miserable Tory campaign to abolish wages councils and leave without protection millions on poverty wages. I hope that the Labour party in Bournemouth will publish the speech of the hon. Member for Bournemouth, East and make sure that every member of the catering trade has a copy of it. It should be helpful to it in the next election.

The motion is short, sharp, and very much to the point. It concentrates on three issues which go to the heart of any debate on low pay. I hope that the debate will trigger a national debate about the scandal of low pay and poverty in the United Kingdom in the 1980s. Indeed, in that respect my hon. Friend the Member for Dunfermline, East (Mr. Brown) used a memorable phrase when he said that the Government had abandoned the concept of a national minimum standard of living. The motion deplores the poverty, injustice and discrimination caused by low pay. I have heard not a single comment from the Tory Benches which contradicted or deplored those sentiments.

My hon. Friends have demonstrated in a series of magnificent speeches that poverty in Great Britain is widespread, and arises primarily from low pay. It affects almost one third of the entire adult work force and is a direct result of the Government's policy. It is increasing. My hon. Friends the Members for West Bromwich, West (Miss Boothroyd) and Birmingham, Ladywood (Ms. Short) drew attention to the collapse of the economy of the west midlands, once the most prosperous part of the country. They also emphasised the plight of millions of women who are among the lowest of the low-paid.

Various formulae can be used to define low pay, ranging from the DHSS supplementary benefit earnings equivalent level of £105·45 per week down to the average of the lowest one tenth of male manual workers at £91·30. Most fair-minded people will be happy to settle for the definition of the excellent body, the Low Pay Unit, as the two thirds median of male earnings which gives a figure of £100·20 per week gross. Any fair-minded person knows in his heart that anyone in full employment who earns less than £100 per week gross is low paid. If that individual has dependent adults and/or children, he is also suffering hardship and poverty.

Poverty is much talked about in political and academic circles, but it is a condition that has to be experienced personally over a period before one can speak about it with authority. Poverty means that when one's furniture starts to fall into disrepair, there is no way of renewing it. It means that there is no money to replace worn-out bedding and old overcoats have to be used instead. It means that no matter how many springs come through the mattress it cannot be replaced. It means that threadbare carpets cannot be renewed. It means that there is no way of replacing broken crockery. It means that when a washing machine finally breaks down it cannot be replaced and clothes have to be washed by hand.

It means that there are never any new clothes for the mother or father and that when patched-up clothes are finally finished the family must rely on better-off relatives or jumble sales for replacements. It also means the constant dread of being unable to pay the gas or electricity bill, which could mean the nightmare of being cut off, and the Tories have increased the tax on electricity and gas so that thousands of our fellow citizens have neither.

For children it is even worse because not only can they rarely have anything new in the way of clothes or toys, but even more rarely do they get luxuries such as steak or good meat, butter, jelly, jam or cream cakes, and there is no such thing as a holiday away from home. The feeling of failure and anger at their parents' inability to provide them with any of the perceived good things in life start to enter their minds and they begin to learn at an early age what poverty, injustice and discrimination really mean.

The second point in the motion condemns the Government for deliberately fostering low levels of pay and I have not heard one comment from the Tory Benches throughout the debate which contradicted or refuted those sentiments. Indeed, the Government — or at any rate some of their prominent members—positively revel in their achievements. Their policies — those of the Chancellor and the Secretary of State for Trade and Industry in particular—have been aimed deliberately at lowering wages.

Although the number of low-paid workers has steadily increased under this Government and millions of workers have lost their jobs, the Tories continue to prattle on endlessly about people pricing themselves back into work. Indeed, their pitiful amendment to the motion shows that that policy is to continue. The amendment states, in effect, that if people in work reduce their wages, more jobs will be created for the unemployed. There is not a shred of evidence to justify such nonsense, which is really aimed at trying to cause a division between the employed and unemployed.

The Government and Tory councils' drive for privatisation has been a cynical exercise. It does not seem to have improved local services or been to the benefit of consumers. The abolition of the fair wages resolution and schedule 11 has made it clear whose interests privatisation will serve. The Government's simple appeal for competition as a means of achieving efficiency has resulted in the competition being between employers, being a contest in wage-cutting, as the Government have allowed Departments to accept tenders based on unfair competition and low pay.

Much of the evidence resulting from privatisation, for example in Wandsworth, has shown that wage-cutting has driven companies down a spiral of inefficiency as penalties incurred reinforce the desire of employers to cut wages, and the fall in the numbers and morale of the work force leads to more penalties. In short, privatisation and the abolition of fair wages has been a charter for exploitation and deepening low pay.

When we examine the YTS and young workers scheme, we see that not only have the Government sought to undermine established rates of pay, and thereby sour industrial relations, but have attempted deliberately to suppress the rates of pay of young workers through those schemes. Experience of the young workers scheme. which gives employers a subsidy provided that they pay youngsters only a certain amount, shows that the majority of jobs provided under the scheme would have existed anyway, and often at higher rates of pay.

The Government have actually embarked on a policy of furnishing employers with incentives to pay low wages, although the Government realise that the payment of low wages does not necessarily meet with an equal acceptance of the idea of low wages. For that reason, the Government think it necessary to put pressure on young people who refuse to lower their expectations. The Secretary of State for Employment said, in a letter to my right hon. Friend the Member for Manchester, Gorton (Mr. Kaufman) on 30 January: I can see no reason why those who unreasonably refuse to take up the offer of a training place which will significantly improve their chances of employment, or leave that place for no good reason, should carry on regardless receiving full benefits at the tax-payers' expense. It seems that coercion in the form of financial penalties is to be brought to bear on young people who refuse to place their confidence in a Government who have created record unemployment, a record number of bankruptcies and a record decline in manufacturing industry, and who have increased poverty. The Government seem to be intent on lowering the expectations of, and demoralising, young people whose only crime was to leave school at a time when the Government were laying waste the economy.

The third point in the Opposition's motion tonight concerns the threat to abolish wages councils. The Minister's comments about the future of the wages councils in no way clarified matters, and when one considers the very heavy pressure that he is under from the Tory Back Benches, one can see what is likely to happen in the future.

There is no evidence to suggest that if wages councils were abolished there would be any improvement in employment prospects. My hon. Friend the Member for Stalybridge and Hyde (Mr. Pendry) has drawn attention to the ridiculous level of the fines, the cut of one third in the inspectorate since the Government took office, and the fact that there are almost no prosecutions of employers who have ignored wages councils' awards. That is a scandal which should be exposed to the whole country. There were only seven prosecutions in 1982 out of some 9,000 employers found to be underpaying their work forces. That is a dubious record for the Government. How can the Government claim to have the interest of all workers—including the low-paid—at heart, when they appear to be intending to remove the little protection that is afforded to employees to ensure that they achieve something resembling a fair week's wage for a fair week's work?

The Minister of State said that the Opposition motion suggested no solutions. The House knows that repeatedly, during the past weeks and months, the Opposition have put forward proposals for policies to reflate the economy and modernise the infrastructure—objectives which almost all industries agree to be necessary. We have put forward policies to rebuild our shattered inner cities and provide their impoverished citizens with a better standard of living. We have suggested policies to improve the service industries, and to improve the quality of the NHS.

Every idea put forward by the Opposition is rejected out of hand by the Government. They have no policies, no ideas, nothing to put before the nation, but any constructive proposal by the Opposition is rejected. That is why our motion is utterly condemnatory. The Government deserve to be condemned for the economic mismanagement which has made Britain into a low-wage, low-productivity nation.

Skilled craftsmen throughout Britain today—fitters, electricians and building trade workers, men with families and in full-time employment—are so badly paid that they qualify for, and are forced to apply for, family income supplement or housing benefit. That is a scandal and an outrage. Yesterday's debate showed that the Government's attitude and actions in relation to housing benefit will further impoverish the low-paid.

We have heard a great deal today about statistics, percentages and comparisons. Much has been said about incentives to work, with the suggestion that if people would only take lower wages they would be priced back into work. We even heard about the poverty trap whereby low-paid workers who by some chance receive a small rise are worse off due to loss of benefits. When figures are bandied about and statistics are flying around the Chamber, too many Conservative Members forget that those statistics represent people — men, women and, above all, children. As an act of economic policy the Government have deliberately sought to increase the incidence of low pay and poverty. They are to be condemned not just for that. They should be condemned by all decent-minded people for the poverty, injustice and discrimination that they have visited upon hundreds of thousands of innocent children who have a right to expect Governments to care about their welfare and their future. The Government have deliberately abdicated that responsibility. They have made it clear today that they have no intention of putting to the nation any plans, policies or proposals to ameliorate the plight of the millions of low-paid workers in our society. Their only idea is to abolish the wages councils. The Government ought to be condemned and they will be condemned by the Opposition. I invite my right hon. and hon. Friends to vote for the Opposition motion.

Photo of Hon. Peter Morrison Hon. Peter Morrison , City of Chester 9:37 pm, 15th February 1984

The Opposition spokesman on employment, the right hon. and learned Member for Monklands, East (Mr. Smith), said in the penultimate sentence of his opening speech that this was a serious subject that deserved a serious debate. I could not agree more, although I regret the somewhat petulant and negative way in which the Opposition motion is drafted.

Low pay is an important subject. As the hon. Member for St. Helens, North (Mr. Evans) rightly said, first and foremost it is about people. It is also relevant to the wider debate about economic prosperity and how that prosperity should be shared, as the hon. Member for Fife, Central (Mr. Hamilton) said in his contribution. I agree with the Liberal party spokesman, the hon. Member for Truro (Mr. Penhaligon), that this is not a simple issue. Having visited his area twice during my time at the Department, I appreciate that low pay is an especially important issue in Cornwall.

I listened with great care and interest to the views of the Opposition. Strong arguments were advanced as to why the pay of various groups should be increased. The right hon. and learned Member for Monklands, East drew attention to the social charter of the Council of Europe. The Low Pay Unit frequently alleges that the United Kingdom is in breach of its commitments under that charter, alleging that there is a commitment to a minimum wage of not less than 68 per cent. of the average wage. The facts, however, are as follows. An advisory committee of the Council of Europe made that recommendation in 1977 but it has never been accepted by the council. Nor, so far as I am aware, is it supported by even one member state. The Low Pay Unit is well aware of the facts and does its reputation no good by continuing to peddle an allegation that it knows to be untrue.

Photo of Mr John Smith Mr John Smith , Monklands East

It is all very well talking about the recommendation's legality. I have alleged not that the Government are in breach of anything, but that the European social charter has a decency threshold of 68 per cent. of earnings that any civilised community would accept. Does not the Minister accept that to be a civilised standard?

Photo of Hon. Peter Morrison Hon. Peter Morrison , City of Chester

The right hon. and learned Gentleman must understand that the impression given, perhaps not by himself but by the Low Pay Unit, is that that fact is accepted by all member states. That is not the case.

There is no argument about the fact that some wages are relatively low, and that it would be desirable to increase them, but surely there is no need to base such arguments on artificial definitions of low pay. That hardly does justice to the problem.

I was disturbed to hear that Opposition Members were concerned exclusively with pay. They seem to conclude that pay levels are set without regard to other economic factors and, worse, that it is possible to raise pay levels for some or all workers without any consequences. There was no attempt to put the question of pay into context. I entirely agree with my hon. Friends the Members for Elmet (Mr. Batiste) and for Gainsborough and Horncastle (Mr. Leigh) that pay cannot be considered on its own.

Let me try to repair that omission. It is incontrovertible—I hope that the right hon. and learned Member for Monklands, East and his hon. Friends agree with me—that real pay levels depend on what is produced and sold. That is true of countries, industries, firms and individuals. Pay levels are related directly to the health of the productive sectors of the state: the manufacturing and commercial base that underpins the economy. If that prospers, the benefit will work through in the form of higher pay. If it does not prosper, wage increases will be an illusion. There must be a deeper understanding that pay levels depend entirely—I repeat myself on purpose—upon what is produced and sold. That is also true of jobs.

The motion gives a totally false and selective impression of what has happened in the past few years. The facts are otherwise. From 1978–79 to 1983–84, those on average earnings—and I stress that these are only averages—increased their take-home pay by 5 per cent. to 6 per cent. in real terms. Perhaps Opposition spokesmen have heard today's announcement that average weekly earnings rose by 7·5 per cent. in the year to December 1983.

Photo of Miss Betty Boothroyd Miss Betty Boothroyd Member, Labour Party National Executive Committee

Can the Minister say what proportion of that figure was overtime worked?

Photo of Hon. Peter Morrison Hon. Peter Morrison , City of Chester

As the hon. Lady appreciates, there will always be some overtime.

Photo of Hon. Peter Morrison Hon. Peter Morrison , City of Chester

There is always some overtime in the figure but, when compared to previous years, the amount of overtime has generally been lower, but this has started to improve.

Photo of Hon. Peter Morrison Hon. Peter Morrison , City of Chester

I shall come to that point later in my speech.

Photo of Hon. Peter Morrison Hon. Peter Morrison , City of Chester

I have made the point perfectly well, and will develop it later.

Part of the reason for the improvement in real earnings is that inflation is under control. I know that the right hon. and learned Member for Monklands, East did not like to compliment the Minister of State on the fact that inflation has come down to about 5 per cent., but that has been a significant achievement, given that it was 20 per cent. at the end of the last decade.

Photo of Hon. Peter Morrison Hon. Peter Morrison , City of Chester

I shall give way in a moment, and I shall refer to some of the remarks that the hon. Lady made.

As the Chancellor forecast in his autumn statement, we are well on course for an inflation rate of 4·5 per cent. by the end of this year. Indeed, as the House will know, average prices fell last month. I did not notice the Opposition welcoming that. For everyone it is good news. I would have thought that the House, particularly Opposition Members, would realise that it is good news, especially for the low-paid. The hon. Member for Dunfermline, East (Mr. Brown) said that there was no evidence that the situation had improved. I hardly think that that is so, as my hon. Friend the Minister of State reminded the House.

Photo of Clare Short Clare Short , Birmingham, Ladywood

I am grateful to the Minister for giving way. He is trying to claim that things are all right for the low-paid because average wages have gone up. Will he not confess that that is totally misleading because the average does not tell us what is happening to the lowest paid? Under the Government the number of low-paid people has risen. In 1979 one tenth of male manual workers were low paid, whereas in 1983 the proportion had increased to one in six — [HON. MEMBERS: "Speech."] Those are the facts. Similarly, the pay of high-paid workers has gone up, which is exactly what we alleged. The rich have become richer and the poor poorer.

Photo of Hon. Peter Morrison Hon. Peter Morrison , City of Chester

If the hon. Lady had listened, she would have heard that I was at pains to say that those were only averages. I was also at pains to say that the fact that inflation had come down and prices had dropped last month was particularly good for the lower-paid.

Photo of Hon. Peter Morrison Hon. Peter Morrison , City of Chester

I should like to continue as I wish to develop a number of points.

That improvement in real earnings was all the more remarkable in that it took place during a major world recession and at a time of major structural change in the economy. The hon. Member for West Bromwich, West (Miss Boothroyd), giving a vivid picture of her constituency in the west midlands, talked about the structural change in the economy and how it affected her part of the country. I understand that.

During this time, some industries have expanded and others have contracted. In the past, jobs have contracted in older and more traditional industries in areas such as the hon. Lady's constituency, but over the past decade 1 million new jobs have been created in the services sector. Whole new industries have been created — fast food outlets, video recorder and home computer industries, security services and energy conservation. Some 40,000 people now work in the micro-electronic industry in Scotland—more than in coal or steel.

The past decade has been a time of change in industry. That has been reflected both in the type of jobs available and in the pay levels that they command. Earnings in some industries have gone up relative to the average—in the energy industries, in financial and business services and in the chemical and allied industries. Of course, others have declined relative to the average, such as motor manufacture, construction, textiles and footwear. That is true not only of industries but of occupations. In general, non-manual jobs are in relatively greater demand than manual jobs. Adjustments in relative pay reflect that, and earnings of white collar workers—I accept—have grown faster than those of manual workers.

Photo of Mr Dale Campbell-Savours Mr Dale Campbell-Savours , Workington

Will the Minister give an absolute assurance to the House that the deflation of wages will not form part of the Government's policy for industrialisation in the outer regions?

Photo of Hon. Peter Morrison Hon. Peter Morrison , City of Chester

The hon. Gentleman heard what my hon. Friend the Minister of State said when he asked that question earlier. My hon. Friend replied perfectly correctly, and I stand entirely by what he said.

Photo of Mr John Biggs-Davison Mr John Biggs-Davison , Epping Forest

My hon. Friend said that he should like many more people to have higher wages. Is not the question of unduly low wages a reflection on the trade union movement? Should it not be doing more to improve the condition of lower-paid workers?

Photo of Hon. Peter Morrison Hon. Peter Morrison , City of Chester

I shall refer shortly to the position of some trade unions, and my hon. Friend will discover that I am in substantial agreement with what he said.

The hon. Members for Stalybridge and Hyde (Mr. Pendry) and Birmingham, Ladywood (Ms. Short) asked about the position of women in the economy. I am not sure where the hon. Gentleman got his figures from, because, relative to men, women have improved their position. In 1970, their average hourly earnings were 63 per cent. of men's earnings, and today that proportion has risen to over 74 per cent. Indeed, during the recession, women have, relatively speaking, done rather well. Their employment has fallen by less than that of men since 1979, and the number of women in part-time jobs — which many women actively want—has risen.

Although the Opposition do not like to hear it, there is more good news. Yesterday's output figures showed that in 1983 output in production industries was 2½ per cent. up on 1982. Both the Common Market and the OECD forecast that the United Kingdom will have the highest growth rate in 1984 of any Common Market country. For example, private sector housing starts in 1983 were up 20 per cent. on 1982 and are on course for the highest figure for 10 years.

The CBI quarterly survey, derided earlier in the debate, points to a further rise in business confidence, further increases in manufacturing output, a broadening of recovery in capital goods industries and a 7 per cent. increase in manufacturing investment in real terms in 1984, and my hon. Friend the Member for Bolton, North-East (Mr. Thurnham) was at pains to point out the importance of an increase in investment.

Opposition Members choose to ignore these facts and continue to look at pay in isolation, but there is an unbreakable link between pay and jobs. In the decade of the 1970s — the decade of high pay rises and low productivity—jobs were exported to other more efficient countries. Countries such as Germany have higher real pay levels and lower unemployment as a result. That is because their industries are more productive and pay increases are related to increases in productivity.

The link between pay and jobs is widely recognised. With 3 million people unemployed, there can be no doubt that jobs for the unemployed are the first priority. I quote from a joint TUC-Labour party document entitled "Partners in Rebuilding Britain". It states: The first call on the nation's resources must be the creation of jobs for the unemployed".

I agree with that priority, although judging from the tenor of the debate, I wonder whether Opposition Members believe that that is no longer the first priority. That priority is reflected in our amendment. I hope that the Opposition still remain of the same view.

That is one reason why we introduced the young workers scheme, which is directly designed to improve young people's job prospects by opening up the differential between young people's pay rates and those of adults. The hon. Member for Ladywood will be pleased to hear that more than 250,000 young people have benefited from the scheme. The hon. Lady, my hon. Friend the Member for Ludlow (Mr. Cockeram) and the hon. Member for Caerphilly (Mr. Davies) were at variance on whether the level of youth wages had anything to do with whether school leavers and whether 17 and 18-year-olds were more likely to get a job. The hon. Member for Ladywood asked whether anything had been published about the case that she had put forward. She will know that in the Employment Gazette of last June, the findings of one of our economists were published. Those findings stated: Using improved data and concentrating on the period 1969 to 1981, the study shows that the employment of young people under 18 years of age appears to have been reduced by increases in their average earnings relative to the average earnings of adults. That is especially apparent for males.

That was backed up by a report from Warwick university by Messrs. Merrilees and Wilson. I hope that the hon. Lady will now accept that the remarks of my hon. Friend the Member for Ludlow had a published basis.

Photo of Hon. Peter Morrison Hon. Peter Morrison , City of Chester

No, I shall not give way. I hope that the hon. Lady will accept that my right hon. Friend the Secretary of State received a letter from the TUC about this matter, to which was attached a document, part of which stated: There must obviously be some truth in the proposition that, with all other things being equal, an individual employer will tend to employ more people if wages are lower and fewer people if wages are higher. That is a quotation from a TUC document.

My hon. Friend the Minister of State made the Government's position clear on wages councils. I appreciate that there are stongly held views on both sides of the House. I listened carefully to the arguments advanced by all Opposition Members and by my hon. Friends the Members for Bournemouth, East (Mr. Atkinson), Ludlow and Eltham (Mr. Bottomley). The suggestion of the hon. Member for St. Helens, North that the Government have a devious plot to abolish the councils is not borne out by the remarks of my hon. Friend the Minister of State, who said: We will look with a most searching eye into the operation of the wages councils and examine fairly—not ignoring the facts or refusing to face them—whether their existence and operation increases unemployment. If that turns out to be true, it would be a dereliction of duty if the Government were to continue the system merely because we have always had it".

The youth training scheme has been a point of discussion in many different ways. I regret that the hon. Member for Ladywood referred to it as "that rotten scheme".

Photo of Mr Bernard Weatherill Mr Bernard Weatherill , Croydon North East

Order. I understand that the Minister is not giving way.

Photo of Hon. Peter Morrison Hon. Peter Morrison , City of Chester

As I was saying, the hon. Member for Ladywood referred to the YTS as "that rotten scheme". Has she visited the training centre which is in her constituency, as I have? Has she seen the trainees in that centre? Has she learnt how enthusiastic they are about the scheme?

Photo of Hon. Peter Morrison Hon. Peter Morrison , City of Chester

No, I will not.

I wonder whether the hon. Member for Ladywood appreciates that the managing agencies are enthusiastic as well as the trainees. Whatever the hon. Member for Dunfermline, East and his right hon. and hon. Friends may say about the £25 allowance, I find that the trainees are quite happy with it.

Photo of Hon. Peter Morrison Hon. Peter Morrison , City of Chester

They understand that it is an investment in their future. It is an investment in their ability to get jobs.

Unless the low-paid get better training, they will not acquire skills; if they do not acquire skills, they will not get better pay. The right hon. and learned Member for Monklands, East did not refute the suggestion that he had contradicted the right hon. Member for Leeds, East (Mr. Healey). Does he wish to do so now?

I recommend the amendment to my right hon. and hon. Friends.

Question put, That the original words stand part of the Question:—

The House divided: Ayes 196, Noes 289.

Division No. 168][10 pm
AYES
Adams, Allen (Paisley N)Bidwell, Sydney
Alton, DavidBlair, Anthony
Anderson, DonaldBoothroyd, Miss Betty
Archer, Rt Hon PeterBray, Dr Jeremy
Ashdown, PaddyBrown, Gordon (D'f'mline E)
Ashley, Rt Hon JackBrown, Hugh D. (Provan)
Ashton, JoeBrown, N. (N'c'tle-u-Tyne E)
Atkinson, N. (Tottenham)Bruce, Malcolm
Bagier, Gordon A. T.Buchan, Norman
Banks, Tony (Newham NW)Caborn, Richard
Barnett, GuyCallaghan, Jim (Heyw'd & M)
Beckett, Mrs MargaretCampbell, Ian
Beith, A. J.Campbell-Savours, Dale
Bell, StuartCanavan, Dennis
Bennett, A. (Dent'n & Red'sh)Carlile, Alexander (Montg'y)
Bermingham, GeraldCarter-Jones, Lewis
Cartwright, JohnLitherland, Robert
Clark, Dr David (S Shields)Lloyd, Tony (Stretford)
Clarke, ThomasLofthouse, Geoffrey
Clay, RobertLoyden, Edward
Cocks, Rt Hon M. (Bristol S.)McCartney, Hugh
Cohen, HarryMcDonald, Dr Oonagh
Coleman, DonaldMcGuire, Michael
Concannon, Rt Hon J. D.McKay, Allen (Penistone)
Conlan, BernardMcKelvey, William
Cook, Frank (Stockton North)McNamara, Kevin
Cook, Robin F. (Livingston)McTaggart, Robert
Corbyn, JeremyMadden, Max
Cowans, HarryMarek, Dr John
Cox, Thomas (Tooting)Marshall, David (Shettleston)
Craigen, J. M.Martin, Michael
Crowther, StanMason, Rt Hon Roy
Davies, Rt Hon Denzil (L'lli)Maxton, John
Davies, Ronald (Caerphilly)Maynard, Miss Joan
Davis, Terry (B'ham, H'ge H'l)Meacher, Michael
Deakins, EricMeadowcroft, Michael
Dewar, DonaldMichie, William
Dixon, DonaldMikardo, Ian
Dobson, FrankMillan, Rt Hon Bruce
Dormand, JackMiller, Dr M. S. (E Kilbride)
Douglas, DickMitchell, Austin (G't Grimsby)
Dubs, AlfredMorris, Rt Hon A. (W'shawe)
Duffy, A. E. P.Morris, Rt Hon J. (Aberavon)
Dunwoody, Hon Mrs G.Nellist, David
Eadie, AlexOakes, Rt Hon Gordon
Eastham, KenO'Brien, William
Edwards, Bob (W'h'mpt'n SE)O'Neill, Martin
Evans, John (St. Helens N)Orme, Rt Hon Stanley
Fatchett, DerekPark, George
Fields, T. (L'pool Broad Gn)Parry, Robert
Fisher, MarkPavitt, Laurie
Flannery, MartinPendry, Tom
Foot, Rt Hon MichaelPenhaligon, David
Forrester, JohnPike, Peter
Foster, DerekPowell, Raymond (Ogmore)
Foulkes, GeorgePrescott, John
Fraser, J. (Norwood)Randall, Stuart
Freeson, Rt Hon ReginaldRedmond, M.
Garrett, W. E.Rees, Rt Hon M. (Leeds S)
Gilbert, Rt Hon Dr JohnRichardson, Ms Jo
Godman, Dr NormanRoberts, Ernest (Hackney N)
Golding, JohnRobertson, George
Gould, BryanRobinson, G. (Coventry NW)
Hamilton, James (M'well N)Rooker, J. W.
Hamilton, W. W. (Central Fife)Ross, Ernest (Dundee W)
Hardy, PeterRoss, Stephen (Isle of Wight)
Harman, Ms HarrietSedgemore, Brian
Harrison, Rt Hon WalterSheerman, Barry
Hart, Rt Hon Dame JudithSheldon, Rt Hon R.
Haynes, FrankShort, Ms Clare (Ladywood)
Healey, Rt Hon DenisShort, Mrs H.(W'hampt'n NE)
Heffer, Eric S.Silkin, Rt Hon J.
Hogg, N. (C'nauld & Kilsyth)Skinner, Dennis
Holland, Stuart (Vauxhall)Smith, C.(Isl'ton S & F'bury)
Howell, Rt Hon D. (S'heath)Smith, Rt Hon J. (M'kl'ds E)
Howells, GeraintSnape, Peter
Hoyle, DouglasSoley, Clive
Hughes, Dr. Mark (Durham)Spearing, Nigel
Hughes, Robert (Aberdeen N)Steel, Rt Hon David
Hughes, Roy (Newport East)Stewart, Rt Hon D. (W Isles)
Hughes, Sean (Knowsley S)Stott, Roger
Hughes, Simon (Southwark)Thomas, Dafydd (Merioneth)
Hume, JohnThomas, Dr R. (Carmarthen)
Janner, Hon GrevilleThompson, J. (Wansbeck)
John, BrynmorThorne, Stan (Preston)
Jones, Barry (Alyn & Deeside)Tinn, James
Kaufman, Rt Hon GeraldTorney, Tom
Kennedy, CharlesWallace, James
Kilroy-Silk, RobertWardell, Gareth (Gower)
Kirkwood, ArchibaldWareing, Robert
Lambie, DavidWeetch, Ken
Lamond, JamesWelsh, Michael
Leadbitter, TedWhite, James
Leighton, RonaldWigley, Dafydd
Lewis, Ron (Carlisle)Williams, Rt Hon A.
Lewis, Terence (Worsley)Wilson, Gordon
Winnick, David
Woodall, AlecTellers for the Ayes:
Wrigglesworth, IanMr. John McWilliam and
Young, David (Bolton SE)Mr. John Home Robertson
NOES
Adley, Robertdu Cann, Rt Hon Edward
Aitken, JonathanDunn, Robert
Alexander, RichardDurant, Tony
Amess, DavidDykes, Hugh
Ancram, MichaelEdwards, Rt Hon N. (P'broke)
Arnold, TomEyre, Sir Reginald
Ash by, DavidFairbairn, Nicholas
Aspinwall, JackFallon, Michael
Atkins, Rt Hon Sir H.Farr, John
Atkins, Robert (South Ribble)Favell, Anthony
Atkinson, David (B'm'th E)Fenner, Mrs Peggy
Baker, Rt Hon K. (Mole Vall'y)Finsberg, Sir Geoffrey
Baker, Nicholas (N Dorset)Fookes, Miss Janet
Baldry, AnthonyForman, Nigel
Batiste, SpencerForsyth, Michael (Stirling)
Beaumont-Dark, AnthonyFowler, Rt Hon Norman
Bellingham, HenryFox, Marcus
Benyon, WilliamFranks, Cecil
Berry, Sir AnthonyFraser, Peter (Angus East)
Best, KeithFreeman, Roger
Bevan, David GilroyFry, Peter
Biffen, Rt Hon JohnGale, Roger
Biggs-Davison, Sir JohnGalley, Roy
Blaker, Rt Hon Sir PeterGardiner, George (Reigate)
Body, RichardGardner, Sir Edward (Fylde)
Bonsor, Sir NicholasGarel-Jones, Tristan
Boscawen, Hon RobertGlyn, Dr Alan
Bottomley, PeterGoodhart, Sir Philip
Bowden, A. (Brighton K'to'n)Gow, Ian
Bowden, Gerald (Dulwich)Gower, Sir Raymond
Boyson, Dr RhodesGrant, Sir Anthony
Braine, Sir BernardGreenway, Harry
Brandon-Bravo, MartinGregory, Conal
Bright, GrahamGriffiths, E. (B'y St Edm'ds)
Brinton, TimGriffiths, Peter (Portsm'th N)
Brittan, Rt Hon LeonGrist, Ian
Brooke, Hon PeterGround, Patrick
Brown, M. (Brigg & Cl'thpes)Gummer, John Selwyn
Browne, JohnHampson, Dr Keith
Bruinvels, PeterHanley, Jeremy
Bryan, Sir PaulHannam, John
Buchanan-Smith, Rt Hon A.Hargreaves, Kenneth
Buck, Sir AntonyHarvey, Robert
Budgen, NickHaselhurst, Alan
Burt, AlistairHavers, Rt Hon Sir Michael
Butler, Hon AdamHawkins, C. (High Peak)
Butterfill, JohnHawkins, Sir Paul (SW N'folk)
Carlisle, John (N Luton)Hawksley, Warren
Carlisle, Kenneth (Lincoln)Hayes, J.
Carttiss, MichaelHayhoe, Barney
Channon, Rt Hon PaulHayward, Robert
Chapman, SydneyHeathcoat-Amory, David
Chope, ChristopherHeddle, John
Churchill, W. S.Hickmet, Richard
Clark, Hon A. (Plym'th S'n)Hicks, Robert
Clark, Dr Michael (Rochford)Higgins, Rt Hon Terence L.
Clark, Sir W. (Croydon S)Hill, James
Clarke, Rt Hon K. (Rushcliffe)Hind, Kenneth
Clegg, Sir WalterHirst, Michael
Cockeram, EricHogg, Hon Douglas (Gr'th'm)
Colvin, MichaelHolland, Sir Philip (Gedling)
Conway, DerekHolt, Richard
Coombs, SimonHooson, Tom
Cope, JohnHordern, Peter
Cormack, PatrickHoward, Michael
Corrie, JohnHowarth, Alan (Stratf'd-on-A)
Couchman, JamesHowarth, Gerald (Cannock)
Cranborne, ViscountHowell, Ralph (N Norfolk)
Crouch, DavidHubbard-Miles, Peter
Currie, Mrs EdwinaHunt, John (Ravensbourne)
Dickens, GeoffreyHunter, Andrew
Dorrell, StephenHurd, Rt Hon Douglas
Douglas-Hamilton, Lord J.Irving, Charles
Dover, DenJenkin, Rt Hon Patrick
Jessel, TobyOsborn, Sir John
Jones, Gwilym (Cardiff N)Ottaway, Richard
Jones, Robert (W Herts)Page, Richard (Herts SW)
Joseph, Rt Hon Sir KeithParris, Matthew
Kershaw, Sir AnthonyPatten, Christopher (Bath)
Key, RobertPattie, Geoffrey
King, Roger (B'ham N'field)Pawsey, James
King, Rt Hon TomPeacock, Mrs Elizabeth
Knight, Gregory (Derby N)Percival, Rt Hon Sir Ian
Knight, Mrs Jill (Edgbaston)Pink, R. Bonner
Knox, DavidPollock, Alexander
Lamont, NormanPowell, William (Corby)
Latham, MichaelPowley, John
Lawler, GeoffreyPrentice, Rt Hon Reg
Lawrence, IvanProctor, K. Harvey
Lee, John (Pendle)Raffan, Keith
Leigh, Edward (Gainsbor'gh)Raison, Rt Hon Timothy
Lennox-Boyd, Hon MarkRathbone, Tim
Lewis, Sir Kenneth (Stamf'd)Rees, Rt Hon Peter (Dover)
Lightbown, DavidRenton, Tim
Lloyd, Ian (Havant)Rhodes James, Robert
Lloyd, Peter, (Fareham)Rhys Williams, Sir Brandon
Lord, MichaelRidsdale, Sir Julian
Luce, RichardRifkind, Malcolm
Lyell, NicholasRoe, Mrs Marion
McCurley, Mrs AnnaRost, Peter
Macfarlane, NeilRowe, Andrew
MacGregor, JohnRumbold, Mrs Angela
MacKay, Andrew (Berkshire)Sainsbury, Hon Timothy
MacKay, John (Argyll & Bute)Scott, Nicholas
Maclean, David John.Shaw, Giles (Pudsey)
McNair-Wilson, P. (New F'st)Shaw, Sir Michael (Scarb')
McQuarrie, AlbertShepherd, Colin (Hereford)
Madel, DavidShersby, Michael
Malins, HumfreySilvester, Fred
Malone, GeraldSims, Roger
Maples, JohnSkeet, T. H. H.
Marland, PaulSoames, Hon Nicholas
Marlow, AntonySpence, John
Marshall, Michael (Arundel)Spencer, D.
Mates, MichaelStanley, John
Mather, CarolSteen, Anthony
Maude, Hon FrancisStern, Michael
Mawhinney, Dr BrianStevens, Lewis (Nuneaton)
Maxwell-Hyslop, RobinStewart, Allan (Eastwood)
Mayhew, Sir PatrickStewart, Andrew (Sherwood)
Mellor, DavidStokes, John
Merchant, PiersTapsell, Peter
Meyer, Sir AnthonyTemple-Morris, Peter
Miller, Hal (B'grove)Thomas, Rt Hon Peter
Mills, Iain (Meriden)Thompson, Donald (Calder V)
Mills, Sir Peter (West Devon)Thompson, Patrick (N'ich N)
Miscampbell, NormanThorne, Neil (Ilford S)
Mitchell, David (NW Hants)Thornton, Malcolm
Moate, RogerThurnham, Peter
Monro, Sir HectorTownend, John (Bridlington)
Moore, JohnTrippier, David
Morris, M. (N'hampton, S)Viggers, Peter
Morrison, Hon C. (Devizes)Wakeham, Rt Hon John
Morrison, Hon P. (Chester)Waldegrave, Hon William
Moynihan, Hon C.Walker, Bill (T'side N)
Mudd, DavidWalker, Rt Hon P. (W'cester)
Murphy, ChristopherWall, Sir Patrick
Neale, GerrardWard, John
Needham, RichardWarren, Kenneth
Nelson, AnthonyWells, John (Maidstone)
Neubert, MichaelWilkinson, John
Newton, TonyYounger, Rt Hon George
Nicholls, Patrick
Norris, StevenTellers for the Noes:
Onslow, CranleyMr. John Major and
Oppenheim, PhilipMr. Archie Hamilton.
Oppenheim, Rt Hon Mrs S.

Question accordingly negatived.

Question, That the proposed words be there added, put forthwith pursuant to Standing Order No. 33 (Questions on amendments):—

The House divided: Ayes 286, Noes 196.

Division No. 169][10.13 p.m.
AYES
Adley, RobertFairbairn, Nicholas
Aitken, JonathanFallon, Michael
Alexander, RichardFarr, John
Amess, DavidFavell, Anthony
Ancram, MichaelFenner, Mrs Peggy
Arnold, TomFinsberg, Sir Geoffrey
Ashby, DavidFookes, Miss Janet
Aspinwall, JackForman, Nigel
Atkins, Rt Hon Sir H.Forsyth, Michael (Stirling)
Atkins, Robert (South Ribble)Fowler, Rt Hon Norman
Atkinson, David (B'm'th E)Fox, Marcus
Baker, Rt Hon K. (Mole Vall'y)Franks, Cecil
Baker, Nicholas (N Dorset)Fraser, Peter (Angus East)
Baldry, AnthonyFreeman, Roger
Batiste, SpencerFry, Peter
Beaumont-Dark, AnthonyGale, Roger
Bellingham, HenryGalley, Roy
Benyon, WilliamGardiner, George (Reigate)
Berry, Sir AnthonyGardner, Sir Edward (Fylde)
Best, KeithGarel-Jones, Tristan
Bevan, David GilroyGlyn, Dr Alan
Biffen, Rt Hon JohnGow, Ian
Biggs-Davison, Sir JohnGower, Sir Raymond
Blaker, Rt Hon Sir PeterGrant, Sir Anthony
Body, RichardGreenway, Harry
Bonsor, Sir NicholasGregory, Conal
Boscawen, Hon RobertGriffiths, E. (B'y St Edm'ds)
Bottomley, PeterGriffiths, Peter (Portsm'th N)
Bowden, A. (Brighton K'to'n)Grist, Ian
Bowden, Gerald (Dulwich)Ground, Patrick
Boyson, Dr RhodesHamilton, Hon A. (Epsom)
Braine, Sir BernardHampson, Dr Keith
Brandon-Bravo, MartinHanley, Jeremy
Bright, GrahamHannam, John
Brinton, TimHargreaves, Kenneth
Brittan, Rt Hon LeonHarvey, Robert
Brooke, Hon PeterHaselhurst, Alan
Brown, M. (Brigg & Cl'thpes)Havers, Rt Hon Sir Michael
Browne, JohnHawkins, C. (High Peak)
Bruinvels, PeterHawkins, Sir Paul (SW N'folk)
Bryan, Sir PaulHawksley, Warren
Buchanan-Smith, Rt Hon A.Hayes, J.
Buck, Sir AntonyHayhoe, Barney
Budgen, NickHayward, Robert
Burt, AlistairHeathcoat-Amory, David
Butler, Hon AdamHeddle, John
Butterfill, JohnHickmet, Richard
Carlisle, John (N Luton)Hicks, Robert
Carlisle, Kenneth (Lincoln)Higgins, Rt Hon Terence L.
Carttiss, MichaelHill, James
Channon, Rt Hon PaulHind, Kenneth
Chapman, SydneyHirst, Michael
Chope, ChristopherHogg, Hon Douglas (Gr'th'm)
Churchill, W. S.Holland, Sir Philip (Gedling)
Clark, Hon A. (Plym'th S'n)Holt, Richard
Clark, Dr Michael (Rochford)Hooson, Tom
Clark, Sir W. (Croydon S)Hordern, Peter
Clarke, Rt Hon K. (Rushcliffe)Howard, Michael
Clegg, Sir WalterHowarth, Alan (Stratf'd-on-A)
Cockeram, EricHowarth, Gerald (Cannock)
Colvin, MichaelHowell, Ralph (N Norfolk)
Conway, DerekHubbard-Miles, Peter
Coombs, SimonHunt, John (Ravensbourne)
Cope, JohnHunter, Andrew
Cormack, PatrickHurd, Rt Hon Douglas
Corrie, JohnIrving, Charles
Couchman, JamesJenkin, Rt Hon Patrick
Crouch, DavidJessel, Toby
Currie, Mrs EdwinaJones, Gwilym (Cardiff N)
Dickens, GeoffreyJones, Robert (W Herts)
Dorrell, StephenJoseph, Rt Hon Sir Keith
Douglas-Hamilton, Lord J.Kershaw, Sir Anthony
Dover, DenKey, Robert
du Cann, Rt Hon EdwardKing, Roger (B'ham N'field)
Dunn, RobertKing, Rt Hon Tom
Durant, TonyKnight, Gregory (Derby N)
Dykes, HughKnight, Mrs Jill (Edgbaston)
Edwards, Rt Hon N. (P'broke)Knox, David
Eyre, Sir ReginaldLamont, Norman
Latham, MichaelPawsey, James
Lawler, GeoffreyPeacock, Mrs Elizabeth
Lawrence, IvanPercival, Rt Hon Sir Ian
Lee, John (Pendle)Pink, R. Bonner
Leigh, Edward (Gainsbor'gh)Pollock, Alexander
Lennox-Boyd, Hon MarkPowell, William (Corby)
Lewis, Sir Kenneth (Stamf'd)Powley, John
Lightbown, DavidPrentice, Rt Hon Reg
Lloyd, Ian (Havant)Proctor, K. Harvey
Lloyd, Peter, (Fareham)Raffan, Keith
Lord, MichaelRaison, Rt Hon Timothy
Luce, RichardRathbone, Tim
Lyell, NicholasRees, Rt Hon Peter (Dover)
McCurley, Mrs AnnaRenton, Tim
Macfarlane, NeilRhodes James, Robert
MacGregor, JohnRhys Williams, Sir Brandon
MacKay, Andrew (Berkshire)Ridsdale, Sir Julian
MacKay, John (Argyll & Bute)Rifkind, Malcolm
Maclean, David John.Roe, Mrs Marion
McNair-Wilson, P. (New F'st)Rost, Peter
McQuarrie, AlbertRowe, Andrew
Madel, DavidRumbold, Mrs Angela
Malins, HumfreySainsbury, Hon Timothy
Malone, GeraldScott, Nicholas
Maples, JohnShaw, Giles (Pudsey)
Marland, PaulShaw, Sir Michael (Scarb')
Marlow, AntonyShepherd, Colin (Hereford)
Marshall, Michael (Arundel)Shersby, Michael
Mates, MichaelSilvester, Fred
Mather, CarolSims, Roger
Maude, Hon FrancisSkeet, T. H. H.
Mawhinney, Dr BrianSoames, Hon Nicholas
Maxwell-Hyslop, RobinSpence, John
Mayhew, Sir PatrickSpencer, D.
Mellor, DavidStanley, John
Merchant, PiersSteen, Anthony
Meyer, Sir AnthonyStern, Michael
Miller, Hal (B'grove)Stevens, Lewis (Nuneaton)
Mills, Iain (Meriden)Stewart, Allan (Eastwood)
Mills, Sir Peter (West Devon)Stewart, Andrew (Sherwood)
Miscampbell, NormanStokes, John
Mitchell, David (NW Hants)Tapsell, Peter
Moate, RogerTemple-Morris, Peter
Monro, Sir HectorThomas, Rt Hon Peter
Moore, JohnThompson, Donald (Calder V)
Morris, M. (N'hampton, S)Thompson, Patrick (N'ich N)
Morrison, Hon C. (Devizes)Thorne, Neil (Ilford S)
Morrison, Hon P. (Chester)Thornton, Malcolm
Moynihan, Hon C.Thurnham, Peter
Mudd, DavidTownend, John (Bridlington)
Murphy, ChristopherTrippier, David
Neale, GerrardViggers, Peter
Needham, RichardWakeham, Rt Hon John
Nelson, AnthonyWaldegrave, Hon William
Newton, TonyWalker, Bill (T'side N)
Nicholls, PatrickWalker, Rt Hon P. (W'cester)
Norris, StevenWall, Sir Patrick
Onslow, CranleyWard, John
Oppenheim, PhilipWarren, Kenneth
Oppenheim, Rt Hon Mrs S.Wells, John (Maidstone)
Osborn, Sir JohnWilkinson, John
Ottaway, RichardYounger, Rt Hon George
Page, Richard (Herts SW)
Parris, MatthewTellers for the Ayes:
Patten, Christopher (Bath)Mr. Michael Neubert and
Pattie, GeoffreyMr. John Major.
NOES
Adams, Allen (Paisley N)Beith, A. J.
Alton, DavidBell, Stuart
Anderson, DonaldBennett, A. (Dent'n & Red'sh)
Archer, Rt Hon PeterBermingham, Gerald
Ashdown, PaddyBidwell, Sydney
Ashley, Rt Hon JackBlair, Anthony
Ashton, JoeBoothroyd, Miss Betty
Atkinson, N. (Tottenham)Bray, Dr Jeremy
Bagier, Gordon A. T.Brown, Gordon (D'f'mline E)
Banks, Tony (Newham NW)Brown, Hugh D. (Provan)
Barnett, GuyBrown, N. (N'c'tle-u-Tyne E)
Beckett, Mrs MargaretBruce, Malcolm
Buchan, NormanKilroy-Silk, Robert
Caborn, RichardKirkwood, Archibald
Callaghan, Jim (Heyw'd & M)Lambie, David
Campbell, IanLamond, James
Campbell-Savours, DaleLeadbitter, Ted
Canavan, DennisLeighton, Ronald
Carlile, Alexander (Montg'y)Lewis, Ron (Carlisle)
Carter-Jones, LewisLewis, Terence (Worsley)
Cartwright, JohnLitherland, Robert
Clark, Dr David (S Shields)Lloyd, Tony (Stretford)
Clarke, ThomasLofthouse, Geoffrey
Clay, RobertLoyden, Edward
Cocks, Rt Hon M. (Bristol S.)McCartney, Hugh
Cohen, HarryMcDonald, Dr Oonagh
Coleman, DonaldMcGuire, Michael
Concannon, Rt Hon J. D.McKay, Allen (Penistone)
Conlan, BernardMcKelvey, William
Cook, Frank (Stockton North)McNamara, Kevin
Cook, Robin F. (Livingston)McTaggart, Robert
Corbyn, JeremyMadden, Max
Cowans, HarryMarek, Dr John
Cox, Thomas (Tooting)Marshall, David (Shettleston)
Craigen, J. M.Martin, Michael
Crowther, StanMason, Rt Hon Roy
Davies, Rt Hon Denzil (L'lli)Maxton, John
Davies, Ronald (Caerphilly)Maynard, Miss Joan
Davis, Terry (B'ham, H'ge H'l)Meacher, Michael
Deakins, EricMeadowcroft, Michael
Dewar, DonaldMichie, William
Dobson, FrankMikardo, Ian
Dormand, JackMillan, Rt Hon Bruce
Douglas, DickMiller, Dr M. S. (E Kilbride)
Dubs, AlfredMitchell, Austin (G't Grimsby)
Duffy, A. E. P.Morris, Rt Hon A. (W'shawe)
Dunwoody, Hon Mrs G.Morris, Rt Hon J. (Aberavon)
Eadie, AlexNellist, David
Eastham, KenOakes, Rt Hon Gordon
Edwards, Bob (W'h'mpt'n SE)O'Brien, William
Evans, John (St. Helens N)O'Neill, Martin
Fatchett, DerekOrme, Rt Hon Stanley
Fields, T. (L'pool Broad Gn)Park, George
Fisher, MarkParry, Robert
Flannery, MartinPavitt, Laurie
Foot, Rt Hon MichaelPendry, Tom
Forrester, JohnPenhaligon, David
Foster, DerekPike, Peter
Foulkes, GeorgePowell, Raymond (Ogmore)
Fraser, J. (Norwood)Prescott, John
Freeson, Rt Hon ReginaldRandall, Stuart
Garrett, W. E.Redmond, M.
Gilbert, Rt Hon Dr JohnRees, Rt Hon M. (Leeds S)
Godman, Dr NormanRichardson, Ms Jo
Golding, JohnRoberts, Ernest (Hackney N)
Gould, BryanRobertson, George
Hamilton, James (M'well N)Robinson, G. (Coventry NW)
Hamilton, W. W. (Central Fife)Rooker, J. W.
Hardy, PeterRoss, Ernest (Dundee W)
Harman, Ms HarrietRoss, Stephen (Isle of Wight)
Harrison, Rt Hon WalterSedgemore, Brian
Hart, Rt Hon Dame JudithSheerman, Barry
Haynes, FrankSheldon, Rt Hon R.
Healey, Rt Hon DenisShort, Ms Clare (Ladywood)
Heffer, Eric S.Short, Mrs R.(W'hampt'n NE)
Hogg, N. (C'nauld & Kilsyth)Silkin, Rt Hon J.
Holland, Stuart (Vauxhall)Skinner, Dennis
Home Robertson, JohnSmith, C.(Isl'ton S & F'bury)
Howell, Rt Hon D. (S'heath)Smith, Rt Hon J. (M'kl'ds E)
Howells, GeraintSnape, Peter
Hoyle, DouglasSoley, Clive
Hughes, Dr. Mark (Durham)Spearing, Nigel
Hughes, Robert (Aberdeen N)Steel, Rt Hon David
Hughes, Roy (Newport East)Stewart, Rt Hon D. (W Isles)
Hughes, Sean (Knowsley S)Stott, Roger
Hughes, Simon (Southwark)Thomas, Dafydd (Merioneth)
Hume, JohnThomas, Dr R. (Carmarthen)
Janner, Hon GrevilleThompson, J. (Wansbeck)
John, BrynmorThorne, Stan (Preston)
Jones, Barry (Alyn & Deeside)Tinn, James
Kaufman, Rt Hon GeraldTorney, Tom
Kennedy, CharlesWallace, James
Warden, Gareth (Gower)Winnick, David
Wareing, RobertWoodall, Alec
Weetch, KenWrigglesworth, Ian
Welsh, MichaelYoung, David (Bolton SE)
White, James
Wigley, DafyddTellers for the Noes:
Williams, Rt Hon A.Mr. John McWilliam and
Wilson, GordonMr. Don Dixon.

Question accordingly agreed to.

MR. SPEAKER forthwith declared the main Question, as amended, to be agreed to.

Resolved,That this House believes that the most important step towards any improvement in pay levels is by a general improvement in the economy; therefore welcomes the encouraging signs of economic recovery, the improvement in training, the increase in productivity and the reduction in inflation; and recognises that the number of people who have a job will depend directly on the levels of pay received by those in work.