Minimum Wage

Oral Answers to Questions — Scotland – in the House of Commons at 12:00 am on 27th April 1999.

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Photo of Peter Viggers Peter Viggers Conservative, Gosport 12:00 am, 27th April 1999

If he will make a statement about the impact of the minimum wage on the Scottish economy. [80992]

Photo of Mr Calum MacDonald Mr Calum MacDonald Parliamentary Under-Secretary (Local Government and Transport), Scottish Office

It is estimated that the national minimum wage will benefit 2 million workers in Britain as a whole, and 157,000 in Scotland. The Low Pay Commission has statutory responsibility for monitoring and evaluating the introduction and impact of the minimum wage and is expected to report to the Government on it in December 1999.

Photo of Peter Viggers Peter Viggers Conservative, Gosport

What is the Government's answer to the extra unemployment, estimated at 10,000, that will be caused in Scotland by the minimum wage? Will welfare to work use public money to subsidise people back into employment?

Photo of Mr Calum MacDonald Mr Calum MacDonald Parliamentary Under-Secretary (Local Government and Transport), Scottish Office

I do not recognise the hon. Gentleman's estimate. What I do know is that the claimant count in Scotland now is the lowest since 1976. That is an achievement by this Government which people in Scotland widely recognise. The national minimum wage is an important part of the Government's strategy to target poverty and to achieve a fairer society in Scotland, and we shall continue to develop and build on those policies.

Photo of Tom Clarke Tom Clarke Labour, Coatbridge and Chryston

Is my hon. Friend aware that the Scottish people are extremely proud that we have delivered the minimum wage, among many of our other promises? They are particularly pleased that the Labour party did it in the face of opposition from the Conservatives and with the Scottish National party tucked up in bed? Let us take, for example, the tourist industry, which was represented on the independent commission that made recommendations to the Government. Does my hon. Friend accept that, far from deploring a minimum wage, that industry welcomes it because it wants a well-trained, motivated and well-paid staff, consistent with the Scottish traditions of fairness, decency and a refusal to exploit those who seek to serve us?

Photo of Mr Calum MacDonald Mr Calum MacDonald Parliamentary Under-Secretary (Local Government and Transport), Scottish Office

My right hon. Friend is absolutely right. The national minimum wage was a landmark achievement by the Government in their bid to create a fairer society in Scotland. It was achieved against the opposition of the Conservatives and it is regrettable that the SNP did not even bother to turn out to vote for the national minimum wage, which has delivered benefits to people on low incomes in Scotland.

Photo of Michael Moore Michael Moore Shadow Spokesperson (Scotland)

While agreeing with the Minister that the minimum wage is an important development for Scotland, does he accept that the 14,000 job losses in Scotland since the general election are a damning indictment of the Government's record, and that, with so much of Scotland's economy dependent on exports, an early commitment to a single currency is essential for the country?

Photo of Mr Calum MacDonald Mr Calum MacDonald Parliamentary Under-Secretary (Local Government and Transport), Scottish Office

I certainly do not want to minimise the impact of any job losses on the families or individuals concerned, but the hon. Gentleman and his party should recognise that there has been a net gain in jobs in Scotland since the last election. As I said, unemployment in Scotland is at its lowest rate since 1976. That is a significant achievement, and all credit for it is due to the efforts of, and economic policies followed by, this Government.

Photo of Gavin Strang Gavin Strang Labour, Edinburgh East and Musselburgh

Does my hon. Friend agree that it is a disgrace that under the Tories so many Scots worked for poverty pay? Will he confirm that 157,000 Scottish employees will benefit from the statutory national minimum wage, which, complemented by the working families tax credit, the 10p income tax rate and a reduction in national insurance contributions, will help to ensure that work pays?

Photo of Mr Calum MacDonald Mr Calum MacDonald Parliamentary Under-Secretary (Local Government and Transport), Scottish Office

My right hon. Friend is absolutely right. The national minimum wage is only part of our strategy to tackle poverty. Taken together with, for example, the working families tax credit, which he mentioned, it means that the effective minimum wage for, say, a single earner with two children is not £3.60 but £7 an hour. That is an important contribution to tackling poverty among low-earning families.

Photo of Liam Fox Liam Fox Opposition Spokesperson (Constitutional Affairs, Scotland and Wales)

The Government's figures on the Scottish economy show unemployment rising by 1,200 last month and 16,000 fewer jobs in Scotland than there were a year ago. Why does the rise in unemployment in Scotland account for half the rise in the United Kingdom as a whole? Why is the Scottish economy performing so badly compared with the rest of the United Kingdom? What measures will the Minister take to deal with the special problems that seem to be afflicting the Scottish economy under Labour management?

Photo of Mr Calum MacDonald Mr Calum MacDonald Parliamentary Under-Secretary (Local Government and Transport), Scottish Office

The claimant count for March was 5.6 per cent., which is exactly the same percentage rate as for February. That is the lowest since 1976, which is a huge achievement by the Government. There have been particularly large reductions in youth and long-term unemployment. We are not complacent about those achievements, and we intend to build on them in the future.