Minimum Wage

– in the House of Lords at 2:30 pm on 15th December 2004.

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Photo of Lord Rosser Lord Rosser Labour 2:30 pm, 15th December 2004

asked Her Majesty's Government:

What representations they have received calling for the abolition of the national minimum wage since its introduction.

Photo of Lord Triesman Lord Triesman Government Whip, Lords in Waiting (Whips)

My Lords, the Government have not received any recent representations calling for the abolition of the minimum wage.

Photo of Lord Rosser Lord Rosser Labour

My Lords, I thank my noble friend for that response.

Bearing in mind that the major employers' federations and confederations, along with the Official Opposition, opposed a national minimum wage by scaremongering about job losses, does my noble friend take it that the lack of continued advocacy against a national minimum wage is an admission by all those organisations that not only were they just plain wrong but also that they failed the up to 1.9 million who have benefited both from the introduction of the national minimum wage and subsequent upratings?

In addition—

Noble Lords:

Reading!

Photo of Lord Rosser Lord Rosser Labour

Does he share my suspicion that, since the Official Opposition also shamefully abolished the wages councils in 1993, the national minimum wage would at best simply be allowed to wither on the vine if the party opposite ever won power again?

Finally—

Noble Lords:

Order!

Photo of Lord Rosser Lord Rosser Labour

Will my noble friend draw to the attention of the Low Pay Commission that, in assessing representations made to it on the future level of the national minimum wage, it is the less than—

Noble Lords:

Order!

Photo of The Countess of Mar The Countess of Mar Crossbench

My Lords, I am sorry to interrupt the noble Baroness, but the Standing Orders state that at Question Time two questions may be asked.

Noble Lords:

And no reading!

Photo of Lord Rosser Lord Rosser Labour

My Lords, if I can finish the question.

Noble Lords:

No. Order!

Photo of Lord Rosser Lord Rosser Labour

My Lords, will my noble friend draw to the attention of the Low Pay Commission that, in assessing—

Photo of Baroness Amos Baroness Amos President of the Council, Privy Council Office, Lord President of the Council and Leader of the House of Lords (Privy Council Office)

My Lords, we really would move on much more quickly if we allowed the noble Lord to finish his question.

Photo of Lord Rosser Lord Rosser Labour

My Lords, will my noble friend draw to the attention of the Low Pay Commission representations made to it on the future level of the national minimum wage, as it is the less than highly paid economists at the TUC whose economic judgment and representations on this issue have so far proved to be the most reliable and accurate?

Photo of Lord Marsh Lord Marsh Crossbench

My Lords, can I beg to move that the noble Lord be no longer heard?

Photo of Lord Triesman Lord Triesman Government Whip, Lords in Waiting (Whips)

My Lords, I hope that was not a reference to me. With the agreement of the House I shall reply to the first two points. The minimum wage is a flagship policy for this Government and has been in place since April 1999. It is now supported by all major parties but it was opposed by many organisations and political parties before it was introduced, as my noble friend Lord Rosser said. Many of them predicted economic catastrophe. I have reread some of the views expressed at that time. Mr Michael Howard said:

"I shall continue to take every opportunity to point out the damage which the statutory minimum wage would cause. Labour's plans could cost up to 2 million jobs in Britain".

The reality, of course, has been the opposite. Jobs have increased in number, job security has increased and some disastrously poorly paid people are now earning a decent living.

Photo of Lord Russell-Johnston Lord Russell-Johnston Liberal Democrat

My Lords, has the Minister seen the article in today's Independent which suggests that many firms circumvent the minimum wage by getting women to work at lower than minimum wage rates at home, and that this is encouraged by the large stores? Do the Government propose to do anything about that?

Photo of Lord Triesman Lord Triesman Government Whip, Lords in Waiting (Whips)

My Lords, I have seen the argument advanced in the Independent. It draws to everyone's attention that many of the most serious problems are encountered by women workers. Much of the policy was intended to deal with that problem. Many of them are home workers, receiving very low wages from what I can describe only as unscrupulous employers who are breaking the regulations by paying low piece rates that bear no relationship to the minimum wage.

On 1 October 2004, the Government introduced new regulations to the effect that employers must pay their workers a minimum wage for every hour that they work, or a fair piece rate initially set at 100 per cent of the minimum wage. There will be ruthless regulation and inspection of this. Before people take objection to the notion of inspection and regulation as overbearing, the problem must be got right.

Photo of Lord Dixon-Smith Lord Dixon-Smith Shadow Minister, Environment and Transport

My Lords, perhaps we could come back to the question of the national minimum wage and disregard the history lesson.

Noble Lords:

Oh!

Photo of Lord Dixon-Smith Lord Dixon-Smith Shadow Minister, Environment and Transport

My Lords, I did not deny the history lesson; I said that we ought to disregard it. The fact is that the national minimum wage is rising at a considerable multiple of the inflation rate. What assessment have the Government made of the impact of this over time, and do they intend to give any advice to the Low Pay Commission as a consequence?

Photo of Lord Triesman Lord Triesman Government Whip, Lords in Waiting (Whips)

My Lords, the core objective in raising pay for low-paid workers was that it should not adversely affect their employment prospects. The commission has noted, throughout what I think have been several years of quite exceptional work, that business has expressed concerns over the impact of significant increases in the minimum wage. It has said that it will look at the impact of those increases on the sectors affected in its next report.

When it presents its next report to the Government, which will be at the end of February 2005, it must be a matter for the commission, without interference, to ensure that the levels of the national minimum rate and the recommendations for change are commensurate with making sure that jobs are protected. The commission has done that job exceptionally well; I cannot believe that it will fail this year, having succeeded in past years. However, if it is thought that it has failed, I have no doubt that we will have a debate on the matter.

Photo of Baroness Prosser Baroness Prosser Labour

My Lords, I declare an interest in this matter, as a serving member of the Low Pay Commission. I wonder whether my noble friend is aware of the variety of ways in which the Low Pay Commission gathers evidence before determining the recommendation to the Prime Minister on the level of the national minimum wage. For example, we take account of—

Noble Lords:

Question!

Photo of Baroness Prosser Baroness Prosser Labour

My Lords, for example, we take account, of course, of economic and labour market data. It has become quite clear that the national minimum wage is not the burden that some people seem to think. By rewarding their employees at a more commensurate level, many employers have found that they are able to employ workers who are much more committed to the task at hand. The evidence that we gather—

Noble Lords:

Oh!

Photo of Baroness Prosser Baroness Prosser Labour

My Lords, the evidence that we gather is helpful in that respect.

Photo of Lord Triesman Lord Triesman Government Whip, Lords in Waiting (Whips)

My Lords, the commission has worked exceptionally well. From the time when he started the work of the commission, Sir George Bain insisted that there should be regular visits to firms of all sizes, including small firms, to assess their capacity to pay the minimum wage without the loss of employment. The commission has dealt with both individual visits and the data with a great deal of skill. I hope that the House will agree on that. If it is felt that the methodology needs a wider-spread debate, of course the House should have such a debate; but I think that the commission has not done at all badly. I hope that will be acknowledged.