I accept the hon. Gentleman's point. With new clause 3 it will be convenient also to discuss the following: New clause 7—Hotel and catering industry—
'The hotel and catering trades shall be exempted from Part II of the Act and wages councils in these sectors shall retain existing powers.'.
New clause 8—Retailing and distribution—s
'The retailing and distribution trades shall be exempted from the provisions of Part II of the Act and wages councils in these sectors shall retain existing powers.'.
Amendment No. 55, in clause 12, page 12, line 4, at beginning insert—
'With the exception of the powers conferred on the clothing manufacturing, retail bespoke tailoring, cap and millinery and the made-up textiles wages councils.'.
Amendment No. 56, in clause 12, page 12, line 4, at beginning insert—
'With the exception of the powers conferred on wages councils setting conditions in the hotel and catering trades.'.
Amendment No. 57, in clause 12, page 12, line 4, at beginning insert—
'With the exception of power conferred on wages councils setting conditions for the retailing and distribution trades.'.
My interest in clothing and textiles is not new. For nearly 25 years I have represented an area of South Leeds where clothing was a major industry. The Burtons empire used to have a manufacturing base in Leeds, but that has now gone. Leeds also had the Fifty Shilling Tailors. I am sure that some hon. Members bought their first suits from such firms.
Clothing was a major industry in my area, and my prime motive in moving the new clause, is to alert the Government to the problems faced by Leeds and other textile towns nearby in the north, in the east midlands and in Leicester.
Some months ago I was prompted, in view of the problems facing the clothing and textile industry in relation to the wages councils, to table an early-day motion. It was signed by 186 people. That is not an
insignificant number. I stress its main points to the Minister. I believe that it expresses the wider issues which have a bearing on the precise problems about wages councils in the Bill. The motion states:
That this House, noting the widespread concern within the clothing industry at the Government's Wages Council proposals which would severely affect vulnerable workers, including many employees of small companies, ethnic minority workers, homeworkers and young workers generally"—
the motion led me to make a point which the Pay master General took up on Second Reading when I made a brief intervention—
further noting the recent report on the industry by the Department of Applied Economics at Cambridge University, which suggested that rather than destroying jobs, wage increases between 1950 and 1980 actually expanded clothing employment, and noting the contribution of the Clothing Manufacturing Wages Council (Great Britain),"—
I notice that we are not dealing with Northern Ireland now—
the Clothing Manufacturing Wages Councils (Northern Ireland) and the other clothing wages councils to good industrial relations in the industry which is helping to provide conditions under which the advanced sector of the industry can invest so that the United Kingdom clothing industry remains internationally competitive, accordingly calls on the Government to abandon its present proposals to reduce the scope and powers of the clothing wages councils.
That early-day motion did not get anywhere. As well as representing Leeds, South—which is a clothing industry area—I also now represent Morley, which is a textile town. At least, it was a textile town, but it is no longer. Textiles have almost disappeared from it during the past 25 or 30 years and that is not simply the Government's fault. My right hon. Friend the Member for Wakefield (Mr. Harrison), who is present today, also represents a town in west Yorkshire which contains a clothing and textile industry.
New clause 3 deals with
Retail Bespoke Tailoring, Cap and Millinery and the Made-Up Textiles Wages Councils.
All these councils are in the same general boat although there are differences of approach between them, a point that I have discovered after examining them and after receiving advice from various sources. I shall concentrate now on clothing and textiles.
I shall first clarify clause 22. New clause 3 provides that clause 22 will remain in the Bill. I would like the Minister to clarify certain points about clause 22 even though that clause was dealt with in Committee. In fact, I believe that clause 22 was not dealt with adequately in Committee. There was no discussion on that clause in Committee and it was agreed to without a Division because it makes a director, manager, secretary or similar officer of a limited company, or a person purporting to act in such a capacity, liable for offences under part II of the Bill if that person consented to the offence or connived in it, or if the offence was due to that person's neglect. The similar provision in the Wages Councils Act 1979—and we are dealing with the 1979 Act now, not the Truck Act 1831—is limited to liability or a failure to return accurately completed questionnaires issued by the wages inspectorate.
Clause 22, as I read it, would give the inspectorate added powers to pursue fly-by-night employers. The clothing industry and its associated industries are not short of fly-by-night employers. I could give examples of the failure of the inspectorate to recover money that they assess is due to clothing workers.
A report by the factory inspectorate, which the Minister will have access to, on 300 clothing factories published in February 1985 observed:
There is a higher turnover of employers in the clothing industry than in any other.
I could develop that point. However, we need to have clause 22 in the Bill. It gives extended powers to the inspectorate. However, I wonder whether the powers will be extended. My hon. Friends argued in Committee that the inspectorate now will have extended powers. The Minister did not reply to that argument. Do I understand that, because no reply was made, clause 22 does give extended powers to the inspectorate? I hope that the Minister will clarify that when he replies. From the Committee record, I believe that there are extended powers because the Minister would have contradicted that if it was not true.
If I understand the right hon. Gentleman correctly, he is referring to section 24(6) and (7) of the 1979 legislation. If that is correct, the wording is virtually identical. If not, if he will clarify the matter I shall carry out the necessary research and try to reply to his point in some detail later.
It is section 24(6) and (7) of the Wages Councils Act 1979. When the Bill was in Committee, the clause was approved without debate, but when Labour Members referred generally to the extended powers they were not told that they had it wrong and that there are not extended powers. Is that what the Minister is saying?
I thank the Minister very much. That is the first point and it shows the worth of a Report stage.
When I spoke during the Second Reading debate there was some badinage, as happens on legislation of this kind, about a report commissioned by the National Union of Tailors and Garment Workers. That was once a powerful union in Leeds, but it is not so powerful any more because there are not nearly as many people in the clothing industry in Leeds. However, it is an efficient union.
On Second Reading I referred to the fact that the research carried out by the department of applied economics at Cambridge showed that when pay goes up as a result of the activities of the wages council, job opportunities are expanded. That may seem extremely strange, particularly in the light of what the Paymaster General said just now. He seems to believe in an over-simplistic scenario on the effect of pay increases. He seems to think that if pay goes up, fewer people will be employed. There may be cases where that happens. That must be the case under certain conditions, but that cannot be the complete story.
The department of Employment's research paper, instituted by the Minister and replied to by the Department of applied economics, concluded that the clothing industry had fallen because of the increase in minimum rates. That was refuted not only by the unions but by the employers.
The independent examination by the department of applied economics in October 1985 countered that argument. The Paymaster General called the report in aid so I feel disposed to develop this argument because it underlines what is implicit in the Bill. The report said that the wrong figures were used in the study. Clothing and footwear figures were used instead of those for clothing. For females the Department's figures for minimum rates were incorrect. For males April minimum rates and October earnings were used instead of figures for rates and earnings in the same month. Foreign competition—we know about that in Leeds—was measured by the ratio of clothing retail prices to clothing wholesale prices. The clothing wholesale prices index was also used to calculate real minimum rates.
The Department assumed that there were always more workers willing to work in the industry for the wages available than employers wanted. That is implicit in what the Paymaster General said today. I do not find that so in my constituency. The Department assumed that employers did not substitute cheaper female labour for male employment. The Department's analysis was inadequate.
To summarise, the view of the department of applied economics was that available statistics show that the industry was short of labour for most of the period, and that the only way to get more labour into the industry was to have higher wages. Secondly, it found that the obvious explanation for the loss of jobs is foreign competition in the form of cheap imports. That is certainly the case in Leeds. I can give the Minister chapter and verse. A firm such as Maenson, formerly May and Sons of the 1860s and 1870s, eventually bought by the GUS empire, was shut down in Leeds when the pound went the wrong way and led to increased foreign competition. Given that background we want the wages councils to be excluded from the provisions of part II in the way that I describe in the new clause.
A problem in the industry arises from the high proportion of young people. Therefore, I want to deal with them. Let us not run away with the idea that young people in the clothing industry are waiting to go to the polytechnic or to Oxford university, or wherever, to read modern greats. The labour market is not a wide market that is equal; it is a series of different markets for different sorts of people.
The majority of young people entering the clothing industry undergo a fairly short period of training. As I understood the Paymaster General earlier, he was talking as though there was five years of intensive training with certificates at the end. From my experience over the past 25 years and the advice that I have been given, training is short. Then people go straight on to incentive schemes. Many of the young people are just as productive and, by the very nature of nimble fingers, more so than workers with long experience in the industry. As incentive workers, they are paid according to output, not age. If they are less productive, they automatically earn less. The Government's proposals would deem young workers not fully productive for five years. Anyone with a knowledge of the clothing industry will know that that is not the case. There is no evidence to support the Government's assertion that the extremely low rates which apply to young workers have restricted the recruitment of young trainees.
Let me deal now with the wider issue of incentive workers and holiday entitlement. The two most serious immediate consequences of part II—this is how I am advised it will affect my area, and, no doubt, other areas where people are involved in the clothing industry—will be the loss of the statutory right to holidays and the loss of the statutory right of incentive workers to be paid the minimum as a fallback rate. The holidays are of particular importance to women workers who often do two jobs, one at home and one at work. Contractual rights to holidays are of great importance in the socio-economic scene.
If one goes by television, the modern novel and the way people write today, one would think that all that Mr. Winston Churchill did in 1908 for sweated workers and people working at home was a thing of the past, but it is not. It is important that the Government realise that the world does not end at the Watford gap. There is still an industrial north. It is not the industrial north that it was, but the Government will keep bringing forward legislation that assumes that everywhere is like Guildford and Dorking, but it is not. There is a different part of the country.
The Government do not understand that some of the old methods and ways of industry still exist. Those of us who represent seats in the north, who live in London during the week and go home at the weekend, realise more than most the two worlds in which we live. The Government, led by the Prime Minister, tend to look at the world as if there had been profound changes and the economic ethos of the north has disappeared. Incentive workers could legally earn less than the minimum rate, which is less than £7 a week. That is why the new clause is justified.
I have not dealt with other wages councils, but it goes without saying that these problems apply to them too. No doubt my hon. Friends will mention them. I assume that we are wasting our time moving new clauses if the aim is to win. But perhaps our words will have some effect on the Minister and his Department. He should look at unfair competition and at the decline in the clothing industry, not only in the past 35 to 40 years, but in the past 10 years. The figures of employment are falling all the time. The industry has great problems. We shall not see again the totals that the clothing industry once had. In some ways, I am glad, because the industry was not perfect. It did not supply the right working conditions. Changes are taking place, but training and higher wages are still needed. The Government have made the mistake of changing the wages council for the clothing industry and others.
Long before I went to live in Leeds, and when I was serving in the RAF during the war, the phrase "gone for a Burton" was used. It meant that someone had had it. I often wondered where it came from. Some people say it, meaning that they have gone for a Burton ale. But I looked up that phrase again today and it is suggested that when aircrew or others trained in Blackpool and were learning morse code, they had to go to a nearby former Burtons shop to do their test. If they failed, they were flunked, and so they had "gone for a Burton".
In Leeds, Burtons has gone for a Burton. It does not produce a thing. Unless the Government help the clothing industry, it will all go for a Burton. The Bill shows a singular lack of understanding of the clothing industry's problems, and I commend the new clause to the House.
I listened with great interest to the speech of the right hon. Member for Morley and Leeds, South (Mr. Rees), as he clearly has great experience and important constituency interests. My constituency of Kettering is in Northamptonshire, in the midlands. There are perhaps 250 or 300 textile employees concentrated in three large firms. I appreciate that the conditions there are probably very different from those in some of the towns and cities that Labour Members may describe.
I have not received any representations about the Bill from the major employers in my constituency, who are in footwear manufacture and the making of leather handbags. However, I have received representations from the clothing industry. I have tried to understand the reason for that difference. Incidentally, I pay tribute to Mrs. Davies, the vice-chairman of the National Union of Tailors and Garment Workers, who has patiently lobbied me for the past six or 12 months. Indeed, she was one of those who yesterday presented a petition in Downing street. For many months, I listened with care and attention to the arguments that she made, not about conditions in my constituency but in the wider national context.
The central fear of some of the industry's employees is that wages for those under the age of 21 will be cut, with the resources being transferred to the owners of companies, and distributed in profits and dividends. They fear that young people will be exploited. Judging by the conversations that I have had in my constituency, I do not believe that to be so, although my constituency may not be typical.
I believe that fear to be misplaced for two reasons. First, profitability in the industry is generally low. We well understand the arguments used in favour of toughening the multi-fibre arrangement and helping to introduce sensible measures of protection for the industry. The Minister has a constituency with substantial footwear interests. Before he became a Minister, he was one of the officers of the all-party Back-Bench footwear committee. He understands the unfair conditions facing the footwear industry, which also face the clothing and textile industries. Employers will not deliberately cut the wages of those working in the industry in order to increase distributed profits, because the profits are simply not there.
Secondly, I have taken the trouble to talk to employers about the effect of reducing national insurance contributions. The evidence is that, with lower employment costs, particularly for those aged under 21, employers are prepared to take on extra labour. Perhaps not many are involved, but that evidence still exists I assume that the hon. Member for Truro (Mr. Penhatigon) spoke for the alliance. I entirely agreed with what he said. He generally supported the argument that, with greater flexibility of wage rates for those aged under 21, On balance, employment prospects would be enhanced. Given last year's Budget, that must be borne out by the evidence.
I agree with the right hon. Member for Morley and Leeds, South about the inspectorate. He got things exactly right, and I hope that the Minister will reply to that point. It is important that the inspectorate should have not only sufficient numbers, but the organisation and determination to make sure that the law is properly enforced.
However, I generally welcome the Bill. I do not agree with the fears expressed by those who support the new clause, and I am prepared to support the Bill as it is.
You have grouped together, Mr. Deputy Speaker, a new clause that deals with what might broadly be called the needle trades, a new clause that deals with the hotel and catering trades, and a new clause that deals with the retail and distribution trades. It is entirely logical to group them together, as they have much in common. For example, the workers in all three industries are the most vulnerable workers, and those who will suffer most from the Bill's provisions.
Those workers will suffer most partly because they are relatively defenceless. In all three industries there are some large establishments and employers and I shall come to that point later. But all three industries also have many workplaces that employ very few people. Sometimes they employ virtually no one, as the work is done by homeworkers. As few people are employed, they are very difficult to unionise. Moreover, as my right hon. Friend the Member for Morley and Leeds, South (Mr. Rees) pointed out, those working in the industry are often on the move. In all three trades, the turnover of labour is much faster than in, say, the engineering industry. Thus, the workers are not unionised. They are vulnerable and low paid, and work in small establishments that are rarely visited by an inspector, so the employer can get away with almost anything. I shall not weary the House with instances, but many of those quoted in Committee involved serious abuse of workers.
I smiled to myself when I heard the speech of the Paymaster General, which was based on the assumption that there is a free bargain between employers and workers in a country with 4 million unemployed. Of course there is not a free bargain. The Government say that there can be recourse to an industrial tribunal, but that does not mean much, because in the sweatshops in east London an employer can break the law because he knows that a worker will not go to a tribunal in case he is sacked.
Anyway, not all workers have that recourse. The so-called safeguards about which Ministers keep talking do not exist; hence the vulnerability of those three industries.
I want to say a word about each of the three industries to ensure that they are properly covered. My right hon. Friend the Member for Morley and Leeds, South spoke about great factories like Burtons. There were a few of those in east London—Simpsons, Polikoffs, and so on. However, the overwhelming majority of the needle trade in London is in small sweatshops run in exactly the same way and often in exactly the same premises as at the turn of the century. My father worked in them before this century began. There are the same sweatshop conditions now as at the beginning of the century; history is repeating itself. There is no protection for the workers.
My right hon. Friend asked why we did not have a great discussion in Committee about clause 22 to determine whether it provided extended powers for the inspectorate. It does not matter tuppence whether the clause does or does not give extended powers to the inspectorate because the inspectorate is vanishing and is almost out of existence. It is hideously understaffed, hideously overworked and hideously inadequate. Some establishments in my constituency have been in operation for 12 years but have not had an inspector across the front door. That is how frequently the inspector visits. Yet, simultaneous with the passage of the Bill, the Government are cutting the number of inspectors. In future, inspection will be much less frequent and much more perfunctory—and it is pretty perfunctory now in many cases.
Inspectors investigate whether proper wage rates are being paid by looking at the wages book. They assume that workers receive the amounts written in the wages book. I can tell the House, from first-hand experience, that that assumption is not universally valid. I suppose that it is valid in the majority of cases, but not in all. In the sort of cases that I have been describing, the only way to find out what Joe or Suzy Bloggs is being paid is to ask them. Sometimes the answer is very different from what is written in the wages book.
My next concern is about the welfare and catering trades. I accept that there are still one-man or two-man cafés, but during the past 10 or 20 years there has been a huge concentration with the establishment of hotel chains—one has swallowed up another and then a third and a fourth. There has also been the growth of huge fast food chains—the Wimpys, McDonalds, Kentuckys, Pizza Huts and so on. Those chains are hugely profitable: the employers are making enormous profits. Because of the enormous profits, shares in some of the public companies have appreciated hugely during the past few years, and virtually all of them on sweated rates of pay. The huge profits and huge capital gains made by shareholders have been achieved by workers being paid the absolute minimum.
The Government do not mind that happening because many of those companies donate some of their profits to Conservative party funds—
Oh yes. If the Minister doubts that, I am prepared to send him a list of companies. If he challenges me, I will get my list and quote it at length later. That might prevent the Minister from making any more speeches, because it is a very long list.
In the retail distribution industry there has been considerable concentration with the growth of supermarkets and other specialised chains such as the carpet and DIY chains. There is constant pressure not only to hold down wages, but to lower them. In an earlier debate the Paymaster General spoke about a drive to increase wages. He could not have been talking about this Bill because its purpose is to decrease wages.
In all the three groups I have mentioned there are vulnerable workers who will be abused even more than they are now. Although the three groups appear to be different each from the other, there is a common case for all of them, which is why it was sensible to group them. It is an overwhelming case for the exclusion of each of the three industries from the Bill. I shall therefore support the new clause in the Lobby.
Part II of the Bill is the part on which I should support the Government much more fully than I did on part I, but I hesitate to do so because I think that, as with part I, they do not have it quite right. The Government have not abolished all wages councils, and they should either have done so or left them alone. To tinker with them is the worst of all worlds.
If the Government had read the evidence given to the Institute of Personnel Management when it surveyed all sectors of industry and commerce on that issue, they swould have seen very few friends for wages councils. They are not liked by either side—employer or employee. Indeed, the evidence shows that seven or eight years ago the TUC was in favour of their abolition, and we can understand why. The industries with the lowest paid workers are those that come within the wages councils; by definition, wages councils tend to depress wage rates. There are no wages councils for many of our major industries, and if there were none at all the natural process of market forces would operate. However, we have now an unnatural aspect of market forces introduced by wages councils on a set of criteria that are in themselves often meaningless.
The members of wages councils make decisions without having the responsibility of carrying them out. They do not have to find the money to pay the wages that they set, and they can deliberately opt for a low wage settlement to avoid the hassle that accompanies protracted negotiations. Neither side of industry is done any favours by having wages councils.
The hon. Member for Bow and Poplar (Mr. Mikardo) observed that there is not strong trade unionism in the wages councils sector. That was part of the TUC argument. If the wages council umbrella were removed, the opportunity and the impetus of the unorganised to become members of trade unions and to be organised would be greater. One of the major reasons why workers in the wages council sector do not join trade unions is that they take the view that they are covered by the councils and that the wages set by these arbitrary bodies is, by and large, what they will receive. By definition, the councils keep workers at the lower end of the pay scale and do not provide a free opportunity for both sides of industry properly to negotiate for a set of wages, terms and conditions similar to that which exists in other industries.
The hon. Gentleman is wrong in two respects. First, previous TUC opposition to wages councils was formulated at a time when we did not have 4·5 million unemployed. Secondly, workers in the areas and industries covered by wages councils have employers who would sack them if they joined a trade union. That is why there have been so many disputes. The employers say, "If you join a trade union, you will go out of the door. There are plenty more people to take your job if you want to go."
I understand the hon. Gentleman's first argument as it is one that appears in the report produced by those who subscribe to the Institute of Personnel Management. It is said in that report that the attitudes of the various sides of industry depend very much on the moment when wages councils are discussed.
Are wages councils now what was intended by the late Sir Winston Churchill in 1908? Are conditions now exactly what they were then? I submit that conditions are very different in one strategic sense. In 1908, there was no television and no mass media of the sort that we have now. There were not the communications that are available to us. The underlying theme of 1908 no longer applies. I cannot understand why the Labour party is arguing so vociferously in favour of wages councils when they have not improved the conditions of the workers whom they cover and have covered over the years when comparisons are made with other industries. That is why I think that the Government are making a mistake even to have the minimum clause that is now to be found in the Bill.
We know that the majority of those who are members of wages councils--we went through this in fine detail in Committee—have never worked in industry or commerce. Three quarters of them have come from academic or legal backgrounds, yet they have been appointed to make wages council decisions and orders. The members of the councils have not come up through the trade union movement.
I have a list of members of the retail food trades wages council, and it is clear that the hon. Gentleman does not understand how wages councils are formulated. Their membership is not restricted to university professors or academics. Trade union officials and trade union members sit on wages councils, as do representatives of employers. They try to thrash out a settlement. I appreciate that there are appointed members, and the side that can draw the support of the appointed members wins the day. The order of the retail food trades wages council is a much better one than that which existed before I came to the House 16 years ago, and that has been achieved by trade union representation.
I accept that the hon. Gentleman has strong feelings on this issue. However, one of the arguments set out in the consultative document is that the councils have the very tendency which he demonstrated, which is that of the pendulum effect. They swing one way one year and the other way the next. It might be correct and proper if they were to swing one way for several years. As there is a balance on the councils, the members of them are always looking over their shoulders to ensure that they are not criticised by anyone. At the same time, they are not devoting their attention to the industries for which they are responsible. Instead, they are considering the actions and orders of other councils. In effect, they are equating within a narrow band. If there were no wages councils and if rates of pay were not set artificially for the industries that they now cover, without consideration being given to whether companies can pay more or less, the workers could be better off.
The Government's argument is that the changes that are set out in the Bill will increase the number of employees. They argued a couple of years ago that by changing the qualifying period for a case to be taken to an industrial tribunal they would similarly increase the number in employment. I have not seen the evidence of that yet in my constituency. The Government were warned, but they did not listen.
I had referred to wages councils throughout, Mr. Deputy Speaker, until the last passage before you intervened.
Unlike the hon. Member for Bow and Popular, I am sorry that the amendments have been grouped together. If they had remained separate, we could have had three separate debates and could have argued the merits and demerits of the individual industries. One of the bad features of national legislation is that it always brings everything down to a common level. The amendment, will do nothing for the workers in the industries to which they relate other than to maintain the status quo in a weakened form.
I am sorry that the Government have not abolished the wages councils. If their abolition proved to be unsuccessful, they could be brought back at a later date. Until they are abolished and we go through a period when they do not exist, we shall not know whether we would be better without them. We are to have the worst of both worlds, as we shall have a weakening of the existing system and a half-baked, one-line minimum which in reality will not mean a great deal to those who are covered by the wages councils in the industries to which the amendments relate.
The hon. Member for Langbaurgh (Mr. Holt) is living in another world. He does not seem to realise that in the clothing, catering, hotel and retail industries, to which wages council orders apply, workers are disadvantaged and unprotected. They are not members of unions because, on the whole, they are part-timers and/or women employees who do not join unions as readily as men. They are frightened that if they join a union they will lose their jobs. even if they are not especially good ones.
I am dealing with a firm in my constituency—I do not want to name it because negotiations are taking place—from which a group of workers came to my surgery seeking my advice. The members of the group told me that the company does not like unions and added, "If we join a union, we are afraid that we shall lose our jobs. We have mortgages and families. Our jobs are not brilliant, but at least they are jobs." They showed me how they were protected by their contracts of employment. They were notified of a change of contract. The reason given for the change was "management decision". In other words, the days of Attila the Hun have not gone from the factories of Leicester.
In its own way, the clothing industry in Leicester has performed a miracle in staying alive. I salute the resilience of the work force and some of the managements which, through their efforts, have kept the industry alive. However, all that is left is the remains of a great industry. I remember my father saying in the House that Leicester would never be hit by a recession and that it got through the last one because people cannot do without shoes, clothing, hosiery and knitwear. Father was right about many things, including most of his criticisms of his son, but he was wrong about that. The effects of the recession and of unlimited imports have kept people in the clothing industry at the lowest wage level and have put many of them out of work.
The Government did not abolish the wages councils, as the hon. Member for Langbaurgh (Mr. Holt) would have wished, out of any sense of kindness or compassion, but because many of their supporters in the industries recognised that abolishing wages councils and their orders would invite the cowboys in the industries to undercut them by paying even less then they had to pay under the minimum rates of the wages councils orders. That is why the Government did not get rid of the wages councils. That is why the Government are only prepared to get rid of them in stages. That is why we have had the emasculation of the system rather than its total abolition.
Leicester used to be the second most prosperous city in Europe. Today, unemployment in Leicester is rife. Unemployment in the hosiery industry in my constituency is as high as 60 per cent. The Government have the odd idea that, if they cut wages further and allow employers in the textile hosiery and retail industries to pay sweatshop wages without conditions, there will be more jobs. They think that employers will be prepared to take on more people if those whom they employ are sweated labour. Labour Members are against sweated labour. We believe that the wages councils regulations provide about the only protection there is against it, especially in periods of high unemployment.
The Leicester Mercury, Leicester's local newspaper, performed a public service by revealing the sweatshop conditions that exist. As my hon. Friend the Member for Bow and Poplar (Mr. Mikardo) said with his usual eloquence, the conditions are made much worse by cutting the strength of the factory safety inspectorate.
The number of sweatshops is growing and the cowboys are moving in. Homeworkers are exploited. The Government, in their pursuit of more jobs, are removing the rights of people who have jobs. That is no way to create employment. As the hon. Member for Langbaurgh said, in connection with another matter when he was stopped by the Chair, that will not work. There has been no improvement in employment because the Government's policy has taken away the rights of those at work. There will be no improvement in employment because the Government are seeking the destruction of the wages councils, if not by a direct route, then by an indirect one.
I support the clause proposed by my right hon. Friend the Member for Morley and Leeds, South (Mr. Rees) because it would remove from the legislation the clothing and textiles industry, which is in deep recession, and would give some hope to the people who work in it that hon. Members understand, as the hon. Member for Langbaurgh does not, the problems under which they so ceaselessly labour.
New clause 7 states:
The hotel and catering trades shall be exempted from Part II of the Act and wages councils in these sectors shall retain existing powers.
I am a sponsored member of the Transport and General Workers' Union. Some members of the union will be covered by new clause 7. The hotel and catering sector is the second largest sector covered by wages council protection. Three separate wages councils cover workers in pubs, clubs, licensed hotels, restaurants, cafes and snack bars.
It seems appropriate that the House, the home of the free lunch, should take considerable interest in the conditions that workers experience in the hotel and catering sector. I hope that when hon. Members next enjoy the benefits of a lunch or dinner in one of London's restaurants or hotels, they will think for a moment about the wages and conditions which the workers who have prepared the food, those who have served it, and those who wash up afterwards, must endure. In common with other wages council industries, poor conditions, low pay and poor prospects combine to produce high labour turnover, even in times of high unemployment, in the hotel and catering industry.
Union membership in the industry stands at just 6 per cent. of the national work force. Collective bargaining is confined to workers in a few large hotels and chains. The majority of workers rely directly on the wages councils to protect their wages and conditions. That is the answer to the comments of the hon. Member for Langbaurgh (Mr. Holt). Workers in that sector do not join trade unions because, if they do, they will be straight out of the door. The industries rely on high turnover and the threat of unemployment, which scare people from joining trade unions.
Although we could, no doubt, find some common ground in saying that there are defects in wages councils, Labour Members accept wages councils now because at least they provide minimal protection for the workers who most desperately need protection. I am looking to the next Labour Government to take a completely different attitude to the protection of workers in the hotel and catering sector. Labour Members have clearly demonstrated that the industry has changed dramatically because of the fast food chains and the importation of American systems.
The hon. Gentleman has not participated in the debate up until now. Perhaps he missed the important statement from the Labour Front Bench about what will happen if the Labour Party wins the next general election. The hon. Member for Birmingham, Ladywood (Ms. Short) said that a Labour Government would bring in a national minimum wage. Therefore, the wages councils would be null and void.
That does not necessarily follow. I was merely pointing out that, for the moment, we support a wages council system, because at least it provides some minimal level of protection. My right hon. Friend the Member for Morley and Leeds, South (Mr. Rees) said that the Government have not introduced the legislation to force wages up; they have introduced it to force wages down. It is quite remarkable that the Government's philosophy seems to be that the poor should suffer more poverty as a way of inspiring them to greater effort, but the rich should have greater wealth to inspire them. I have not heard of many judges, admirals, generals, consultants, or even politicians, pricing themselves out of jobs, as they take their large wage increases given by central Government. However, in the catering and hotel industry, where wages and conditions are already appalling, the Government want to take away the minimal protection that workers have. That is why I urge the House to support new clause 7.
I am anxious to deal with many of the points raised by the right hon. Member for Morley and Leeds, South (Mr. Rees). Although I shall try to cover some of the points made by other hon. Members, I am sure that the House will understand if I concentrate on the right hon. Gentleman's points, which were specific. The right hon. Gentleman and I share the experience of not having to change money at Watford. Those of us who come from and represent constituencies in the north are aware of what life is like there.
My hon. Friend the Member for Kettering (Mr. Freeman) represents a textile and footwear constituency and I know that much of what the right hon. Member for Morley and Leeds, South said was accurate. It was not conjecture or hypothesis. I agreed with many of his points. On many occasions, there has been all-party support on matters concerning the textile lobby—for example, on renewals of multi-fibre arrangements. Many hon. Members have joined forces, as I did when I was a Back Bencher, to lobby Ministers. There is no difference among us in that respect.
As I tried to point out in Committee, our differences on this issue are political and, to a great degree, psychological, in that one either accepts what the Government are saying—that those under 21 will be discriminated in favour of as a result of being taker, out of the purview of the wages councils—or one does not. I am not trying to put this bluntly; I am simply saying that one either accepts that view or one does not. We touched on this aspect in the debate on the last series of amendments. No Government in their right mind would go out of their way to do any harm to people under 21. We believe that, as a result of this legislation, we shall increase employment.
My hon. Friend the Member for Kettering put it well. He has experience in a constituency similar to mine of what is going on in industries which employ people who, by any standards, could be said to be low paid. Because we share that experience, we know what it is like.
As I said, the intention of clause 22 was to use the precise wording in the 1979 legislation in this legislation. I spent some time considering this aspect and took the advice of lawyers in the Department. I am not satisfied that my initial intervention during the speech of the right hon. Member for Morley and Leeds, South was correct. I think that he has a point. There are wider powers in the Bill. If that is correct, I am sure that he will be pleased, and I am certainly not sorry about that. I hope that we agree.
Would it not be a good idea for the hon. Gentleman—I do not want to develop this point now—to help us by advising us on the extent to which the powers have been extended?
I am happy to do that. I am under an obligation to the right hon. Gentleman to make that commitment.
Of the Opposition's contributions, the point with which I disagreed most was made by the hon. Member for Bow and Poplar (Mr. Mikardo). That is a pity, because I have great respect for him. We had many exchanges in Committee. The hon. Gentleman implied, as did some of his hon. Friends—it was unique—that the Bill's intention was to drive wage,,, down. That is not true. Labour Members could argue that that could have happened if the Government had gone down the route of total abolition advocated by my hon. Friend the Member for Langbaurgh (Mr. Holt), but we did not.
I carefully followed the points made by my hon. Friend the Member for Langbaurgh. Today, he developed his argument in a way that differed slightly from his approach in Committee. One would have to be foolish to disagree with him when he says that the wages council system does not appear to have worked. That is not open to conjecture or hypothesis. It is a fact. This Government or any Government would face a dilemma in considering whether they should go for complete abolition or whether they should try to remove youngsters under 21 from the purview of the legislation. Contrary to the comments of the hon. and learned Member for Leicester, West (Mr. Janner), no subterfuge is involved in the Government's intention to keep protection just for those over 21. We were convinced, following the consultation exercise. that protection for adult workers had to remain.
I am sure that hon. Members listened carefully to my hon. Friend the Member for Langbaurgh. If we scrapped the whole of the wages council system, as he suggested, we would be taking an incredible risk. Labour Members would never be prepared to take such a risk and, on this occasion, I agree with them. It would be too big a risk.
I return to the point that I made to the right hon. Member for Morley and Leeds, South. One either believes that we are helping youngsters under 21 to obtain jobs and to take that essential first step on the employment ladder, or one does not. We can argue for hours on this subject. Indeed, I suggest that we have already done so in Committee. We are talking about not a slight division but a massive chasm between us. It does not please me to say to the right hon. Member for Morley and Leeds, South that we are talking about a massive divide, but we believe that we are right and that the evidence is that youth employment will increase as a result of the legislation.
We accept—I do not think that any hon. Member mentioned this—that there will be some displacement, and it would be silly to deny that. We have always acknowledged that there would be some displacement, but believe that, on balance, there will be an increase in employment among those under 21 in the wages council industries.
Despite the comments of the right hon. Member for Morley and Leeds. South on clause 22 and his incorporation in the proposed new clause of the provisions of clause 22, I am afraid that, because I do not believe that we can operate two different types of wages council systems, I have to ask the House to reject the new clause.