Take-home Pay

Oral Answers to Questions — Employment – in the House of Commons at 12:00 am on 29th November 1994.

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Photo of Peter Luff Peter Luff , Worcester 12:00 am, 29th November 1994

To ask the Secretary of State for Employment if he will make a statement on the relative levels of take-home pay in the United Kingdom and other European Union countries.

Photo of Mr Michael Portillo Mr Michael Portillo , Enfield, Southgate

British workers' average take-home pay is among the best in the European Union, better than France, Italy or Denmark and comparable to western Germany.

Photo of Peter Luff Peter Luff , Worcester

Does my right hon. Friend agree that his answer provides further evidence of a remarkable combination of low personal taxation, high take-home pay and low overall labour costs? Does he further agree that that proves the success of the Government's economic policies and gives the lie to the Labour party's claims about the dangers of a sweatshop economy?

Photo of Mr Michael Portillo Mr Michael Portillo , Enfield, Southgate

Yes, my hon. Friend is absolutely right. It is important to do away with the myths. Wages in Britain are relatively high and taxes are low, so take-home pay is high. In addition, the Government are extremely careful hot to impose costs, burdens and inflexibility on employers that would make them uncompetitive. Of course, the Labour party is committed to the social chapter—[Interruption].—and to making sure that those costs are higher so that jobs would be lost in Britain. As I said that jobs would be lost in Britain, Labour Members cried, "Hear, hear."

Photo of Denis MacShane Denis MacShane , Rotherham

On take-home pay, is the Secretary of State aware that a pay-slip handed to me in Rotherham last weekend showed a pay rate of £1.80 an hour, which amounted to take-home pay of £99 for a 53-hour week? That is an national disgrace. At the party that he is organising to celebrate his 10 years in Parliament, will he ensure that the cleaners, servants and the people serving the champagne—of which that rate of pay would buy four bottles—will be paid a decent wage?

Photo of Mr Michael Portillo Mr Michael Portillo , Enfield, Southgate

If the hon. Gentleman is worried about pay today, I hope that he will at least congratulate the Government on the massive improvement that has occurred during our term in office. Pay in real terms for the bottom 10 per cent. of full-time workers has increased by 23 per cent., whereas, under the previous Labour Government, their pay fell in real terms. He should be concerned about the Opposition parties' proposals for a minimum wage, which would destroy those people's jobs. It is better for people to be on the ladder of progress with a job than to be put out of work by a minimum wage and to have no job at all.

Photo of Oliver Heald Oliver Heald , Hertfordshire North

Does my right hon. Friend agree with the suggestion of the right hon. Member for Kingston upon Hull, East (Mr. Prescott) that the way forward in solving the unemployment problem is to borrow more money, to get more people into public service jobs and to ignore efficiency, or does he agree that British workers should be climbing the technology ladder for a high-wage, highly efficient economy in Britain?

Photo of Mr Michael Portillo Mr Michael Portillo , Enfield, Southgate

My hon. Friend is right. That was the second major contribution by the right hon. Member for Kingston upon Hull, East to the national economic debate. On the first occasion, he admitted that a minimum wage would cause a shake-out—a euphemism for saying that it would destroy jobs. He has now applied his mind to the unemployment problem and believes that the remedy is for inefficient public services to employ more people and that that, somehow, will bring down unemployment. It would mean, of course, higher taxation on the wealth-creating sector and it would damage incentives and destroy jobs. I thank my hon. Friend for bringing those two arguments from the right hon. Member for Kingston upon Hull, East to the House's attention.