Power of Secretary of State to Suspend the National Minimum Wage in the Case of National or Local Economic Emergencies

Part of Orders of the Day — National Minimum Wage Bill – in the House of Commons at 10:45 pm on 9th March 1998.

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Photo of David Maclean David Maclean Conservative, Penrith and The Border 10:45 pm, 9th March 1998

My hon. Friend is absolutely right. Tourism is a textbook case, and it is an entirely apposite example of an industry in which the minimum wage could be suspended because of short-term economic problems.

We might have another oil crisis. I know that we have a convention requirement to stock 79 or 80 days' supply of oil to stave off such a crisis, but who can tell what form the next crisis may take? Events in the middle east or the Balkans may lead to another crisis, whether or not it is genuine. It does not require a genuine crisis to bring about a lack of confidence in the markets and among economic commentators, and, in those circumstances, particular sectors or areas of the country could be severely affected.

The Government would then be in a bit of a panic. They could do all the spin-doctoring they liked, but spin-doctoring would not remove the problem that the national minimum wage might severely affect workers in a specific area or sector. The Government would be powerless to do anything about it. However, if they could use the order-making power contained in new clause 8, they would be able to overcome a short-term crisis.

One of the main points of contention is the economic crisis that will affect rural areas and all types of employment there—not only agricultural workers, who are covered by the Agricultural Wages Board, but all other workers, such as those working in tourism or in agricultural supply. The dire economic circumstances envisaged in the new clause are coming about rather more quickly in rural areas than any of us would like.

The Government might ask what point there would be in suspending the minimum wage for three months, but the power would be extendable. In much the same way as we extend the Prevention of Terrorism Act annually, provision could be built into new clause 8 to allow the Government to extend the three-month period as they saw fit. The new clause would allow the Government to suspend the impact of the minimum wage in objective 5b areas, where people are suffering because of the economic crisis caused by the Government's bungling of policies for the countryside.