National Minimum Wage

Oral Answers to Questions — Trade and Industry – in the House of Commons at 12:00 am on 18th January 2001.

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Photo of Jeremy Corbyn Jeremy Corbyn Labour, Islington North 12:00 am, 18th January 2001

What plans he has to reform the method of setting the figure for the national minimum wage. [144533]

Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry

We have no such plans. The Government have confidence in the independent Low Pay Commission. As the minimum wage is here to stay under this Government, we have decided to make the Low Pay Commission a permanent body.

Photo of Jeremy Corbyn Jeremy Corbyn Labour, Islington North

Clearly everyone welcomes the principle of a national minimum wage, and I congratulate the Government on introducing it, but does the Minister agree that the current level is far too low? It is extremely difficult for anyone to live and survive on that level of pay. Would it not be better if the national minimum wage were immediately raised to £5 an hour—which would be something approaching a wage on which people could live—and thereafter increased in line with earnings, rather than left to a quango to decide? The poorest workers could then share in the rising prosperity of the rest of the workers in this country.

Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry

My hon. Friend should not underestimate the positive effect that the introduction of the minimum wage, even at its present level, has achieved. The figures that the Government submitted to the Low Pay Commission in our evidence show clearly that, for the first time in many years, the bottom 10 per cent. of income earners have had a higher increase in their average earnings than the top 10 per cent. Earnings in the north-east and Wales—traditionally low-paid areas—have increased by a larger amount than those anywhere else in the country, so real benefits are coming through.

I ask my hon. Friend to consider the remit that I have given the Low Pay Commission for this year, which makes it clear that when the commission considers an increase, it is not restricted to considering inflation. This year, it will also be able to take into account the increase in earnings.

Photo of Peter Lilley Peter Lilley Conservative, Hitchin and Harpenden

Will the Secretary of State confirm that self-employed people such as sub-postmasters and postmistresses are not covered by the minimum wage legislation? A Post Office report sent to Members of Parliament shows that the Government's decision to force pensioners and others to have their payments paid into a bank will result in a £550 million loss to the sub-post offices, and that 20,000 sub-postmasters and postmistresses will find their incomes driven below the level of the minimum wage—unless the Secretary of State can replace that money.

Will the right hon. Gentleman confirm, in response to an earlier question, that the maximum that the banks will be coerced into paying is £125 million? Will he tell us by what authority he will require them to pay that, and whether all the other money will come from the taxpayer—

Photo of Michael Martin Michael Martin Speaker of the House of Commons

Order. That does not have a lot to do with the minimum wage.

Photo of Michael Martin Michael Martin Speaker of the House of Commons

Order. I am telling the right hon. Gentleman that it does not have a lot to do with the minimum wage. I call Mr. Davidson.

Photo of Ian Davidson Ian Davidson Labour/Co-operative, Glasgow Pollok

Is my right hon. Friend the Secretary of State aware of an economic collapse following the introduction of the minimum wage, of the kind predicted by Conservative Members? That certainly does not seem to have happened in my part of the country. Will my right hon. Friend consider arranging for the level of the minimum wage to be raised, so as to reduce the amount of Government expenditure, such as the working families tax credit, that effectively subsidises bad employers? We should not be paying out Government money to subsidise poor employers.

May I also say that I deprecate those who would try to hold down the level of the minimum wage to £5? It really ought to be far more than that.

Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry

My hon. Friend is as generous as ever in these matters. It is probably better for the Low Pay Commission to consider any increase in the light of the labour market and the economic conditions at the time.

It is a bit rich for Conservative Members, who campaigned against the introduction of the national minimum wage, to be critical when certain groups are not included. The important point, which reflects points raised by my hon. Friends, is that the national minimum wage under this Government is here to stay. The Low Pay Commission will be there to recommend increases when it is appropriate to do so. We must ensure that the successful way in which the provision has been implemented since April last year can be continued, and that millions of families can continue to benefit from having the dignity of work that is properly paid, and having a safety net below which no one should fall in terms of the income that they receive for their hard labour.