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 11:15 pm on 9th March 1998.

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Photo of Mr Tim Collins Mr Tim Collins Conservative, Westmorland and Lonsdale 11:15 pm, 9th March 1998

I agree with my hon. Friend. The other reason that new clause 8 is so important is that it reflects the fact that, since 1974, there has been substantial structural change in the modern industrialised economies. We have moved to what is called the "just in time" philosophy. That means that companies no longer have large stocks of equipment, supplies or other things in their factories. They are used to being able to call instantly on the resources they need, which will include labour resources as well as imported and domestic raw materials.

If an economy is so dependent on transport and on the idea that an order can be placed today and raw materials will be in place tomorrow, and if that network were impeded in any one of the ways we hear about—the impact of the millennium bug when we reach the new millennium, or of a terrorist attack on major installations of power complexes—the consequences could be terrible. 1 have referred my hon. Friends to a report earlier this evening on "Channel 4 News", which showed the desperate circumstances of businesses in Auckland, New Zealand, which face the prospect of months of power cuts.

By any definition, those are economic crises that would make it next to impossible for some businesses to stay viable and to pay a national statutory minimum wage, which might have been determined in circumstances where any of those things seemed completely remote: power cuts, computers failing, a massive oil crisis or international developments leading to war. All those might not have been taken into account by the Low Pay Commission in setting the national statutory minimum wage level, but all would amount to a clear and present economic emergency for many businesses in a geographical area, business sector or particular part of the country. In those circumstances, new clause 8 would afford them valuable and absolutely vital protection.

New clause 8 has several other merits. It allows for the Low Pay Commission to be consulted, if it is reasonably practicable. There is no question of it being sidelined by the new clause. However, it is intended to be triggered in circumstances of emergency, where there is likely to be urgency, so the Secretary of State is given flexibility. If the Secretary of State is confident that he or she has the power and time to consult the commission, they may do so. If not, that does not prevent them from acting.