Wages Act (Deregulation)

Oral Answers to Questions — Employment – in the House of Commons at 12:00 am on 3rd March 1987.

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Photo of Mr Thomas Torney Mr Thomas Torney , Bradford South 12:00 am, 3rd March 1987

asked the Paymaster General how many new jobs he estimates have been created by the deregulation contained in the Wages Act.

Photo of Mr David Trippier Mr David Trippier , Rossendale and Darwen

Attempts to estimate the job creation effects of these particular reforms are not likely to be fruitful. However, in my opinion the adverse effects of over-regulation on business enterprise are such that the provisions of the Act can only increase employment beyond what it would otherwise have been.

Photo of Mr Thomas Torney Mr Thomas Torney , Bradford South

In view of that answer, is the Minister prepared to tell the Chancellor of the Exchequer to eat his words, introducing the last Budget, when he said that "lower wages mean more jobs"? Does he agree that the real reason for the Wages Act was to cut the wages of the lowest paid workers in order to increase the profits of friends of the Tory party who contribute huge sums to Tory party funds?

Photo of Mr David Trippier Mr David Trippier , Rossendale and Darwen

I am certainly not in a position to ask my right hon. Friend the Chancellor of the Exchequer to eat his own words, nor would I ever dare to do so. But the hon. Gentleman has given the House the incorrect impression that the legislation which we introduced took everyone out of the purview of the wages councils orders. That is not the case. We took only those under 21 out of that purview. The purpose of introducing that legislation was to give those young people a chance to get on the first rung of the employment ladder, a chance that we do not think that they would have had without that sort of legislation.

Photo of Mr Michael Grylls Mr Michael Grylls , Surrey North West

Does my hon. Friend not agree that, if the partial deregulation of the Wages Act has been successful in creating new jobs, that is an argument for deregulating the entire Act?

Photo of Mr David Trippier Mr David Trippier , Rossendale and Darwen

My hon. Friend's question shows the dilemma that the Government were in when they were reviewing this position not that long ago. On the one hand some Labour Members wanted to keep the wages council orders in their old form and on the other hand some Conservative Members wished to scrap them altogether. As a responsible Government, we listened to the representations made by industry during the consultation process. We decided to retain the purview to which I referred earlier for those over 21. We believe that we have got the balance right.

Photo of Mr John Browne Mr John Browne , Winchester

Does my hon. Friend accept that over-regulation is far more of a disincentive to new enterprise and to new employment than are either access to capital or high interest rates? Will he reaffirm that the Government will continue their drive towards deregulation and the encouragement of enterprise and creating even more new employment than is contained in their fine record to date?

Photo of Mr David Trippier Mr David Trippier , Rossendale and Darwen

My hon. Friend is absolutely right. I am happy to confirm that our latest White Paper, "Building Businesses …Not Barriers", was simply the second chapter of what will be a long-running novel.

Photo of Ms Jo Richardson Ms Jo Richardson , Barking

Will the Minister answer a simple question? Why, through deregulation under the Wages Act and under the Sex Discrimination Act 1986, is he dragging more people, especially women, into low pay?

Photo of Mr David Trippier Mr David Trippier , Rossendale and Darwen

As I have already told the House, women over the age of 21 are not affected by the legislation to which we have referred. We are talking about those who are aged 21 and under.

Photo of Mr Paul Marland Mr Paul Marland , Gloucestershire West

Does not my hon. Friend agree with me that it was trade union negotiators who, in the 1970s, took youth wages to such an unrealistically high level that denied young people the opportunity of work then and even now?

Photo of Mr David Trippier Mr David Trippier , Rossendale and Darwen

The result of that, as my hon. Friend implies, is that those young people could not price themselves into jobs. With this legislation we are giving those young people an opportunity that they otherwise would not get.