Minimum Wage

Oral Answers to Questions — Trade and Industry – in the House of Commons at 12:00 am on 16th October 1991.

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Photo of Mr Graham Riddick Mr Graham Riddick , Colne Valley 12:00 am, 16th October 1991

To ask the Secretary of State for Trade and Industry whether he has received any representations from business men about the impact on industry of minimum wage levels.

Photo of Peter Lilley Peter Lilley Secretary of State for Trade

I am aware of the very widespread concern among business men that a national minimum wage would destroy jobs and competitiveness.

Photo of Mr Graham Riddick Mr Graham Riddick , Colne Valley

Is my right hon. Friend aware that the chief executive of Sears the retailers has said that if a minimum wage policy were introduced it would be bound to lead to unemployment going over 3 million? Has not the Organisation for Economic Co-operation and Development said that the French minimum wage has reduced employment opportunities, particularly for young people with few skills? Does my right hon. Friend agree that it is the height of hypocrisy for Labour to say that it cares about the most disadvantaged people in society when its own policies would deny job prospects to those very same people?

Photo of Peter Lilley Peter Lilley Secretary of State for Trade

My hon. Friend is absolutely right. A number of estimates have been published by business of the damage that would be done by a minimum wage and of the number of jobs that would be destroyed. All of them are very large. Only the Labour party, in the shape of the Opposition spokesman on employment, maintains that there will be no impact on jobs from a minimum wage. Asked by Jonathan Dimbleby: is it your view that there is no negative impact on jobs from a minimum wage of any kind? he said: Yes, that is my view.

Photo of Mr James Lamond Mr James Lamond , Oldham Central and Royton

Is the Secretary of State telling us that he has so little confidence in the ending of the recession that he does not believe that there will be sufficient wealth in the economy to cascade down to those on the very lowest wages, who are asking for just £3·40 per hour, which is barely enough to maintain a reasonable standard of living?

Photo of Peter Lilley Peter Lilley Secretary of State for Trade

I do not think that one can ever afford to be reckless with jobs in the way that the Opposition plan to be. It is particularly unwise to destroy the jobs of those on the bottom rung of the employment ladder. If they can never get on to the first rung of the employment ladder, they can never rise up it. If the Labour party says that a minimum wage of £3·40 would have no impact at all on jobs, why stick at £3·40? Why not set it at £5? Would that have any effect? Or is the Labour party saying that there is some magical higher figure which will influence them but that £3·40 has no impact at all?

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

Does my right hon. Friend agree that minimum wage legislation will encourage illegal immigration and overstaying? Would it not encourage some employers to employ people in the unrecorded and perhaps ironically called black economy?

Photo of Peter Lilley Peter Lilley Secretary of State for Trade

My hon. Friend is almost certainly right. It creates a new form of law breaking—namely, giving jobs to people who need them.

Photo of Mr Roy Beggs Mr Roy Beggs , East Antrim

Does the Secretary of State accept that Northern Ireland already has a low wage economy and that we still have the highest unemployment? Does he agree that we have a responsibility to ensure that people receive a fair reward for the services that they provide and that they are not exploited? Will he tell the House how many other members of the European Community have a minimum wage strategy?

Photo of Peter Lilley Peter Lilley Secretary of State for Trade

The one thing that is absolutely certain is that a minimum wage would do great damage in Northern Ireland, as elsewhere in the United Kingdom. It is also equally certain that in France, where the OECD carried out a study, it has been recognised that the minimum wage has destroyed jobs, particularly among the low paid, the young and the less skilled. I cannot believe that it would be to the benefit of the Province of Ulster that its unemployment problem should be aggravated further by this imposition.