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6.40 pm

Mrs. Maria Fyfe (Glasgow, Maryhill) : There are three ways to improve spending power--charity, state handouts and better wages. I invite Conservative Members to say which they would prefer to improve their standard of living.

Will the Secretary of State for Employment explain why, during the weeks of Tory attacks on Labour's plans to make employers stump up and pay at least £3.40 an hour--which is not a fortune by anyone's standards--the Government have not uttered one word of concern about the plight of people on low pay ? The Government have not recognised the facts, but we know their attitude because of what they have done to the wages councils. They failed to recognise that so many people on low wages were involved in those councils.

It has been mentioned today that the Secretary of State has just had his 50th birthday. I am amazed that someone who has spent half a century on this earth remains so ignorant of the circumstances of many of our fellow British citizens. I suggest that he takes a walk round Maryhill when I shall show him the standard of living of people on low wages in such an area. I am not interested in how he spends his birthday--I am interested in the birthdays of the kids of people who cannot afford to provide decent birthdays for their children and who get into debt trying to do so.

I shall say a few words about trade unions, although I have only a few minutes. My own union, the Transport and General Workers Union, supports the minimum wage. Although the Electrical, Electronic, Telecommunications and Plumbing Union is outside the Trades Union Congress, as my hon. Friend the Member for Birmingham, Ladywood (Ms. Short) said, its members gave the shadow Chancellor of the Exchequer a standing ovation when he took the battle right into its camp and attacked Eric Hammond's refusal to accept the minimum wage proposal. Members of the Amalgamated Engineering Union have never made a wage claim based on the pay of assistants in dry cleaning shops or of waitresses in cafeterias. However, many male car workers have a wife, mother or daughter who earns low wages in jobs that have no trade union organisation and for which there are no wage councils, and they are not in the least averse to their wives, mothers, daughters, friends and neighbours receiving decent pay.

The TUC supports the minimum wage. Norman Willis has had letters supporting the minimum wage published in the national press, so let us have no nonsense or pretence that the trade union movement is against a minimum wage. A few leading individuals are against the proposal, but they are not the voice of the trade union movement as a whole. Let us stop the attempt to deceive the House and the British public about the stance of the trade union movement.

6.43 pm

Mr. Tony Blair (Sedgefield) : If ever a ploy backfired, it was the attempt to hijack this debate. The Secretary of State for Employment is faced with the fastest-rising level of unemployment anywhere in the western world. According to the report published last week by the Organisation for Economic Co-operation and Development job creation in this country will be lower this year than anywhere in the western world. Next year, this

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will be the only country in Europe in which the number of jobs created will fall. We have the lowest growth and the lowest investment. We are the only country to suffer low growth four years in a row. Faced with that, what does the Secretary of State tell us today? Absolutely nothing.

The same OECD report states that skill shortages and inadequate training are responsible for high unemployment. Who but the Secretary of State is responsible for those skill shortages? Thousands of people are waiting for training places. We know from documents leaked from his Department that the relationship between the training and enterprise councils and the Government is not sustainable. We know that Britain has the worst skills deficit of any country in Europe, but what has the Secretary of State told us about that today? Nothing. When he had the chance to debate poverty seriously--an issue that matters to millions--what did he do? He elbowed the Secretary of State for Social Security out of the way and attacked Labour's minimum wage proposal.

There can be no more pertinent example of what the Government have become than the fact that faced with the fastest-rising unemployment and the worst skills shortage, the Department of Employment devotes its entire energy and resources to attacking the Labour party. The Conservative party has ceased to be a party of Government and has become a party of Opposition. The Prime Minister must be the first British political leader in history to have gone into opposition while still residing in Downing street.

What have the Government tried to tell us today? The Secretary of State tried to tell us that the Fabian Society condemned the minimum wage. I quote what the author of the pamphlet involved, Mr. Fred Baylis, said to The Independent . After complaining about persistent misrepresentation by the Secretary of State, he concluded : "Despite what Mr. Howard twists my words to suggest, I did not condemn Labour's proposal for a legal minimum wage. I strongly support it."

That is from the man whom the Secretary of State said condemned the minimum wage.

The Secretary of State also said that Labour Members of Parliament condemned the mininimum wage. We asked which Labour Members of Parliament, and he cited my hon. Friend the Member for Birkenhead (Mr. Field), who then told him that he supported the proposal. We are still waiting for the answer to the question which Labour Members of Parliament are supposed to condemn the minimum wage.

I shall mention one or two items in the Secretary of State's document because I think that some Tory Back Benchers may be interested. It states :

"Norman Willis of the TUC has said the level of two thirds male median earnings is an extreme level' (Financial Times, 3rd July 1991)."

I have read the Financial Times of 3 July 1991, but those words do not appear. In fact, Mr. Willis said :

"the claim by Mr. Howard that Labour's policy would destroy 2m jobs assumed that the wage would be set at some extreme level overnight'".

The Secretary of State also cited in support the National Institute for Economic and Social Research. A few days ago The Guardian cited comments from Mr. Paul Gregg, the author of a pamphlet. What he said is highly significant and we should have an explanation. Mr. Gregg said :

"I have had officials from the Department of Employment ringing me up quite often. Every time I say what I am saying [on the issue] it's not what comes out at the end."

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It is about time that the Government stopped misrepresenting what people say and started telling the truth. On the Government's claim that it will cost 2 million jobs, the independent Income Data Services said the other day not only that the Government's assumptions were entirely unrealistic, but that the Government's claim were not borne out by the facts. When Income Data Services examined the 120 wage claims, it could find no discernible effects of the type claimed by the Government.

Mr. Howard : The hon. Gentleman knows that the Income Data Services study was not based in any sense on the introduction of a national statutory minimum wage. If the hon. Gentleman does not accept my estimate or the estimates of any of the independent experts who have said how many jobs that it would cost, when will he give us his estimate?

Mr. Blair : The right hon. and learned Gentleman's claims not borne out by the experience in other countries. Many of them, with lower unemployment rates than this country, have a minimum wage. The right hon. and learned Gentleman persists in telling us that a minimum wage will cause job losses.

Of course, the Income Data Services report was not an analysis of a minimum wage, because we do not have one ; it was an analysis of where wage levels had been raised far higher proportionately for the lowest-paid than for the higher-paid, with no discernable employment impact and no impact on differentials.

It is not just a matter of the Government opposing Labour's proposals--they now want to abolish even the minimum wage protection, through wages councils, that we have. Not content with opposing minimum wage legislation for some of the lowest paid in our society, they now want to deprive even the people who have the benefit of that protection. Almost 90 years ago, Winston Churchill said in the House that it was necessary to set up the wages councils to prevent the good employer from being undercut by the bad. Those arguments are as valid today as when they were advanced.

The rest of Europe and the United States not only have a minimum wage but are uprating it by more than inflation. They realise what this Government do not--low wages are not the key to economic success. Training, skills and technology are the keys to success in a modern economy.

Let us consider some of the people whom the Government say should not be protected in the way that we believe they should be. The security guard on £1.50 an hour, the hairdresser's assistant on £1 an hour and other people sometimes working for a pittance are the people whom the Government do not want to support and whom they want to keep on low pay.

When the Government attack the minimum wage and our protection for the low paid, we hear little from them about Mr. John Baker, the chief executive of National Power, and his 60 per cent. pay rise or about Mr. Robert Evans of British Gas and Mr. Iain Vallance of British Telecom. Is there not something peculiarly disgusting about those who decry the notion of protection for the lowest paid, yet sit on their hands and do nothing while those in the privatised companies get huge pay rises? [Interruption.]

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Conservative Members will listen. Have not the Government always opposed every piece of social legislation that has ever been put through the House? Do not they still oppose the European social charter? This is the only country to oppose it. Are not the arguments that we hear about the minimum wage the same arguments the Government used to oppose equal pay legislation in the 1970s? The Conservative party turned its back on the unemployed, and it now turns its back on the low-paid.

Of course the minimum wage must be implemented carefully and of course we cannot set it at too excessive a level, but we will start the process of having a minimum wage. We shall take care, but we shall introduce it, because it is fair and right and because a society that treats its most vulnerable badly is a society not worthy of the name. Labour will create that society, and that is one reason why we shall have a Labour Government.

6.53 pm

The Secretary of State for Social Security (Mr. Tony Newton) : I should have found all the rhetoric of the hon. Member for Sedgefield (Mr. Blair) more convincing if, among the many other quotations, it had contained a reference to the OECD report, which was published less than a fortnight ago, about the effects of a minimum wage in France. That report states that it is likely that France's minimum wage has reduced employment levels, especially for youths and the unskilled, and notes that unemployment is particularly prevalent among workers earning at or near the minimum wage.

Mr. Blair : I do not blame the right hon. Gentleman, because he has been badly briefed by the Secretary of State for Employment. That OECD report refers to an earlier report by Mr. Bazen and Mr. Martin which found, first, that there was no adult employment effect and, secondly, that there was no discernible youth unemployment effect in France.

Mr. Newton : The OECD report does not appear to bear the interpretation that the hon. Gentleman places on it. What is more, the OECD specifically suggested that the right way to tackle the problems about which the whole House is concerned is exactly the way in which the Government have been tackling them--by reducing imposts on the low-paid, such as national insurance contributions, as we have done, and by introducing and improving family credit.

The notion that a minimum wage policy of the kind outlined by the hon. Member for Sedgefield will overtake and allow to wither on the vine the benefit known as family credit--a huge improvement on its predecessor, family income supplement--is far-fetched, given that family credit is now worth the equivalent of £2,000 a year to the average person who receives it. If we are told that a minimum wage will raise wages to that sort of amount, by heavens we have probably underestimated the unemployment that will be created.

I have only a few minutes left to speak. I do not particularly complain about that, except to say that I cannot be expected in the time available to respond to all the points made in the debate. At the end of April--the latest date for which figures are

available--family credit, already taking well over twice as much money to at least half as many families again as under family income

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supplement, went to about 340,000 families, the highest ever number. There are further signs that the numbers helped by that benefit will continue to increase.

Whether one bases one's views on the OECD report or on any other sensible analysis, there can be no doubt that family credit, together with the tax and national insurance policies which have pursued to create employment, is being and will be infinitely more effective in tackling those problems than the Labour party's policies would be. I have not attempted to go into all the statistical minutiae offered by the hon. Member for Oldham, West (Mr. Meacher), but we heard a lot about training and statistics in Europe. Let me give the hon. Gentleman four facts for him to ponder. If we adopted the approach to pensions which is general in Europe, 2 million women would have no pension. Nowhere but in Britain do married women with no contribution record qualify for a pension in their own right based on their husband's contributions. If we adopted the German approach in caring for the elderly, there would be no special income support regime providing up to £300 a week for more than 200,000 people in residential and nursing care. In Germany, that is held to be the responsibility of relatives.

If we adopted the French approach to child benefit--the hon. Member for Sedgefield is fond of referring to France--2,750,000 families, or 40 per cent. of all families, would get no such benefit. In France, the one-child family does not qualify.

May I tell the hon. Member for Mid-Staffordshire (Mrs. Heal) that, if we followed the French on income support for young people, single able-bodied under-25s would receive no benefit at all. So the next time that the hon. Member for Sedgefield wants to imply that the system works better elsewhere, he should say which system he has in mind and whether he proposes to copy it.

No matter how much statistical smoke is emitted, it is ridiculous for Labour Members to pretend to be bothered about poverty, and preach about a minimum wage that will mean fewer jobs and more unemployment.

Mr. Don Dixon (Jarrow) rose in his place and claimed to move, That the Question be now put.

Question, That the Question be now put, put and agreed to. Question put accordingly, That the original words stand part of the Question :--

The House divided : Ayes 217, Noes 281.

Division No. 199] [7 pm

AYES

Abbott, Ms Diane

Adams, Mrs Irene (Paisley, N.)

Allen, Graham

Anderson, Donald

Archer, Rt Hon Peter

Armstrong, Hilary

Ashley, Rt Hon Jack

Ashton, Joe

Banks, Tony (Newham NW)

Barnes, Harry (Derbyshire NE)

Barnes, Mrs Rosie (Greenwich)

Barron, Kevin

Beith, A. J.

Bellotti, David

Benn, Rt Hon Tony

Bennett, A. F. (D'nt'n & R'dish)

Benton, Joseph

Bermingham, Gerald

Blair, Tony

Boateng, Paul

Boyes, Roland

Bradley, Keith

Bray, Dr Jeremy

Brown, Gordon (D'mline E)

Brown, Nicholas (Newcastle E)

Brown, Ron (Edinburgh Leith)

Bruce, Malcolm (Gordon)

Caborn, Richard

Callaghan, Jim

Campbell, Menzies (Fife NE)

Campbell-Savours, D. N.

Canavan, Dennis

Carr, Michael

Clark, Dr David (S Shields)

Clarke, Tom (Monklands W)

Clelland, David

Clwyd, Mrs Ann

Cohen, Harry

Cook, Frank (Stockton N)

Cook, Robin (Livingston)

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Column 828

Corbett, Robin

Corbyn, Jeremy

Cousins, Jim

Cox, Tom

Crowther, Stan

Cryer, Bob

Cunliffe, Lawrence

Cunningham, Dr John

Darling, Alistair

Davies, Rt Hon Denzil (Llanelli)

Davies, Ron (Caerphilly)

Davis, Terry (B'ham Hodge H'l)

Dewar, Donald

Dixon, Don

Dobson, Frank

Doran, Frank

Douglas, Dick

Duffy, Sir A. E. P.

Dunnachie, Jimmy

Eastham, Ken

Edwards, Huw

Evans, John (St Helens N)

Ewing, Harry (Falkirk E)

Ewing, Mrs Margaret (Moray)

Fatchett, Derek

Faulds, Andrew

Fearn, Ronald

Field, Frank (Birkenhead)

Fields, Terry (L'pool B G'n)

Flannery, Martin

Flynn, Paul

Foster, Derek

Foulkes, George

Fyfe, Maria

Galbraith, Sam

Galloway, George

Garrett, Ted (Wallsend)

George, Bruce

Gilbert, Rt Hon Dr John

Godman, Dr Norman A.

Golding, Mrs Llin

Gordon, Mildred

Gould, Bryan

Graham, Thomas

Grant, Bernie (Tottenham)

Griffiths, Nigel (Edinburgh S)

Griffiths, Win (Bridgend)

Grocott, Bruce

Hain, Peter

Hardy, Peter

Harman, Ms Harriet

Haynes, Frank

Heal, Mrs Sylvia

Healey, Rt Hon Denis

Henderson, Doug

Hinchliffe, David

Hoey, Ms Kate (Vauxhall)

Hogg, N. (C'nauld & Kilsyth)

Home Robertson, John

Howarth, George (Knowsley N)

Howell, Rt Hon D. (S'heath)

Howells, Geraint

Howells, Dr. Kim (Pontypridd)

Hoyle, Doug

Hughes, John (Coventry NE)

Hughes, Roy (Newport E)

Hughes, Simon (Southwark)

Ingram, Adam

Janner, Greville

Jones, Barry (Alyn & Deeside)

Jones, Ieuan (Ynys Mo n)

Jones, Martyn (Clwyd S W)

Kaufman, Rt Hon Gerald

Kilfoyle, Peter

Kinnock, Rt Hon Neil

Kirkwood, Archy

Lambie, David

Lamond, James

Leadbitter, Ted

Leighton, Ron

Lestor, Joan (Eccles)

Lewis, Terry

Litherland, Robert

Livingstone, Ken

Livsey, Richard

Lloyd, Tony (Stretford)

Lofthouse, Geoffrey

McAllion, John

McCartney, Ian

Macdonald, Calum A.

McKay, Allen (Barnsley West)

McKelvey, William

McLeish, Henry

McMaster, Gordon

McWilliam, John

Madden, Max

Mahon, Mrs Alice

Marek, Dr John

Marshall, David (Shettleston)

Marshall, Jim (Leicester S)

Martin, Michael J. (Springburn)

Martlew, Eric

Maxton, John

Meacher, Michael

Meale, Alan

Michael, Alun

Michie, Bill (Sheffield Heeley)

Michie, Mrs Ray (Arg'l & Bute)

Mitchell, Austin (G't Grimsby)

Moonie, Dr Lewis

Morgan, Rhodri

Morley, Elliot

Morris, Rt Hon A. (W'shawe)

Morris, Rt Hon J. (Aberavon)

Mowlam, Marjorie

Mullin, Chris

Murphy, Paul

Oakes, Rt Hon Gordon

O'Brien, William

O'Hara, Edward

O'Neill, Martin

Orme, Rt Hon Stanley

Patchett, Terry

Pendry, Tom

Pike, Peter L.

Prescott, John

Primarolo, Dawn

Quin, Ms Joyce

Radice, Giles

Randall, Stuart

Rees, Rt Hon Merlyn

Reid, Dr John

Richardson, Jo

Robertson, George

Robinson, Geoffrey

Rogers, Allan

Rooker, Jeff

Rooney, Terence

Ross, Ernie (Dundee W)

Rowlands, Ted

Ruddock, Joan

Salmond, Alex

Sedgemore, Brian

Sheerman, Barry

Sheldon, Rt Hon Robert

Shore, Rt Hon Peter

Short, Clare

Skinner, Dennis

Smith, Andrew (Oxford E)

Smith, C. (Isl'ton & F'bury)

Smith, Rt Hon J. (Monk'ds E)

Smith, J. P. (Vale of Glam)

Snape, Peter

Soley, Clive

Spearing, Nigel

Steinberg, Gerry

Stott, Roger

Strang, Gavin

Straw, Jack

Taylor, Mrs Ann (Dewsbury)

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