House of Commons Hansard Debates for 16 Feb 1993

Ms. Eagle : It is interesting to note that so far every Conservative Member has supported the new clause--which I, too, support--and opposed the Government's move to abolish wages councils. Unfortunately, we were not much enlightened in Committee : after some six hours of argument against abolition, the Minister dismissed what had been said in one and a half sentences. I hope that we shall now hear some explanation for the Minister's belief that the move is reasonable and will create employment-- and, perhaps, some evidence for his view.

I do not believe that any such evidence exists, and many of the speeches that we have heard so far have powerfully reinforced my view. I believe that the Government's decision was born out of purely ideological dogma-- and they are one of the most dogmatic Governments of the century. The measure is being imposed without consultation, and with hardly any attempt to justify it by means of genuine argument about the effects of abolition.

The proposal is an example of the Government's obsession with what I described in Committee as neo-classical 19th-century liberalism with a dash of Benthamite utilitarianism. I stand by that analysis. Let me add that that mixture of policy and philosophy is much older than Winston Churchill's observations in 1909--which were derided by some Conservative Back Benchers as old fashioned--and much more out of date.

I pointed out in Committee that the mixture of policy and philosophy to which I have referred led to the creation

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of the poor laws and the workhouse. In the neo-classical economic model, wages are driven down to whatever level the market dictates--which may be lower than people need in order to live, let alone enjoy life. There is no reason why wages cannot be driven down to zero or below. The Government continue to cling, however, to their outmoded dogma, despite all the evidence to the contrary--that their blessed belief in market forces leads to impoverishment. When the labour market is, as the Government would say, freed up, it fails to provide the work force with wages that can sustain body and soul. If wages councils are abolished, that is what will happen to the 2.7 million workers who now enjoy the protection of wages councils. 8 pm

Simply because of the way that the market operates, the abolition of wages councils will also lead to impoverishment slightly higher up the wages scale. If already low wages are pushed even lower, the wages of people in the more casualised sector of employment will also be pushed lower, which will take even more money and spending power out of the economy and create even more impoverishment. Clause 28 is an attempt to deregulate the labour market even further and to reduce wages costs, the spurious idea being that that, somehow, will create employment.

The Government regard any kind of cost of employing anybody as a burden on business. That is the phrase that they have used. They talk about people being priced back into jobs but we have heard already in the debate that wages council rates are woefully inadequate now. Many examples have been quoted of the wage rates being paid in non-wages council areas. I do not intend to give other examples, although I could do so. I have examples of wage rates as low as £1.80 an hour and others that are as low as £1 an hour.

We are being asked to agree to taxpayers having to subsidise bad employers, who pay poverty, exploitative wages to their work force, with their taxes, simply because people who are paid wages of £1 an hour can scarcely feed themselves on such wages, let alone try to feed and clothe their families. It is insulting that taxpayers should be asked to subsidise bad employers and that wages should then be ratcheted down so far that many other employers, who would prefer to pay higher wages, find that either they have to pay lower wages, because of the competitive pressures, or sack their workers. That is the way that the market mechanism works. It drives out the good and the responsible employers and replaces them with the bad, irresponsible and exploitative employers. It has happened many times in the last century and a half. If wages councils go, it will happen again and the ratcheting down of wages will accelerate.

One of the Government's policy objectives has been to achieve a widening of the gap between the rich and the poor. They have certainly achieved their objective during their period in office. There is massive poverty now, all of which helps to make it harder for the labour market to have any power. With unemployment standing at 3 million or 4 million--one can argue about the figure, but I say that the figure is closer to 4 million than to 3 million--there is a massive pool of people who are able to replace those who

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make a fuss about being paid low wages. That immediately leads to another drag on the levels of wages that can be paid.

In addition, there has been a deliberate strategy by the Government and their predecessors since 1979 to strip away, bit by bit, the employment protection measures that were on the statute book when the Conservatives first came to power in 1979. We have now reached the stage where employment protection under the law is at its absolute minimum. One has to work for two years before one qualifies for any kind of protection against unfair dismissal. Even the protection that one gains after two years in full-time employment and five years in part-time employment does not stretch as far as reinstatement. All this intimidates people and prevents them from managing to achieve even the few employment rights that they have under the law to adequate wage levels and adequate terms and conditions of employment.

There has been a deliberate attempt to create a low-tech, no-skill and cheap economy. The result of the deregulation of the labour market-- combined, on the macro-economic level, with the Government's incompetence, due to another of their obsessions that is not relevant to the Bill but which I mention only in passing, monetarism--is mass unemployment. That has led to the creation of a one third, two thirds society. The people who are in the bottom third cannot hope to do anything other than casualised, unprotected jobs for wages that, frankly, would have been a scandal at the turn of the century and that are a scandal today.

We, as a legislature, have a responsibility to put a stop to that. The last thing that we should be doing today is dismantling the last vestiges of minimum wage protection for already poor and vulnerable groups.

Mrs. Wise : Has my hon. Friend overlooked the excuse that is given by the Treasury Bench--that most of these people are women, anyway, whose income is therefore subsidiary? Is my hon. Friend waiting with bated breath, as I am, for the Secretary of State for Employment and all her female colleagues to declare themselves as mere subsidiaries and that they are queuing up to take a cut in their salaries on the same grounds?

Ms. Eagle : I agree with the sentiments expressed by my hon. Friend. The abolition of wages councils will affect women more than any other group of workers, because 80 per cent., or thereabouts, of wages council workers are women. The labour market is so segmented at the moment that women generally tend to find themselves in the lower echelons of job grades and, therefore, on lower pay.

As my hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson) said in his speech, wages councils lead to a unisex wage. The so-called gender gap--the gap between the average earnings of men and women in particular jobs--is consistently narrower in every wages council industry than it is in the non-regulated sector. As the Equal Opportunities Commission points out in its comments on the Government's attempts to abolish the wages councils, their abolition will have another effect. Apart from the effect on relative levels of poverty, when already low wages decline even further there will be a widening of the gender gap between men and women workers in the non-regulated sector.

The abolition of the wages councils will put us in grave danger of being in breach of the equal rights directive. I

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hope that the Minister will deal with that matter when he replies to the debate. It will run against the spirit of the equal pay legislation that has been on the statute book for 20 years. I shall be interested in what the Minister has to say about the Government's plans to ensure that the gender gap between women's pay and men's pay in this sector, as in all others, is narrowed rather than widened. The workers in the more exploitable areas tend to be women. They also tend to be members of the ethnic minorities. One in four of the ethnic minorities who are lucky enough to have a job find that they are confined to wages sector industries. We can also expect the gap between their pay and the average rate to widen if wages councils are abolished.

As for the effect that abolition of the wages councils will have in my region, the north-west, in so far as we have been able to find out, 345,000 people are working in wages council industries. It is, however, a reasonable estimate and amounts to one in 10 households. If we assume that the abolition of wages councils leads to a 20p fall in wages--it is a very generous assumption given that some of the wage rates that I mentioned earlier are currently being paid in the north-west--and if we also assume an 18-hour week because of the part-time nature of some of the employment that we are discussing, the abolition of wages councils will lead to a withdrawal of £52 million from the economy of the north-west and £10.2 million from my own region of Merseyside. Clearly, that will have an effect on employment.

What are the Department's estimates of the employment effect of withdrawing that spending power from not only the north-west but from the country as a whole if, as I believe will happen, wage rates go down in the aftermath of the abolition of wages councils? The new clause would require statistics to be kept not only on the level of wage rates within wages council industries and the areas that were covered by them but on other aspects. We should certainly appreciate some statistics that we can trust so that we can make a proper assessment of the economic effect of abolition. Neoclassical economic theory accurately predicts what will happen.

Having listened to what the Government have said in their justifications-- thin as they have so far been--for including abolition in the Bill, it is clear to me that they want wages to fall. Surely that is what "pricing yourself into a job" means in Tory-speak. I do not know how one can price oneself into a job at £1.80 an hour. I wonder whether we want such jobs. Should we be aiming for jobs that pay £1.80 an hour and which offer people absolutely no rights or dignity? Do we want such jobs in an advanced, highly technological society which purports to want to compete with some of the most advanced societies in the western world?

I suspect that the result of the Government's obsession with their own little neoclassical dogmas and the demand and supply curve in the labour market, of their continuing obsession with deregulation and of their seeming indifference to the human effect of the ratcheting down of wages in the one third of the country that has been impoverished by their actions, will be to turn us from the workshop of the world, which we have now ceased to be thanks to the Government's wonderful industrial strategies, into the sweatshop of the world. For that reason, I support new clause 12 and oppose the abolition of the wages councils.

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Mr. Burden : I support the new clause because it is important that we have evidence of the impact of the abolition of wages councils. That impact will be not only on statistics but on people, some of the worst-paid employees in the country.

In Committee there was a good deal of double-speak from the Government about why they want to abolish wages councils and what they think the impact of abolition will be. They argue that wages councils are unnecessary because 80 per cent. of employees covered by them are paid more than the legal minimum. That argument does not stand up to too close an examination, but, for the moment, let us accept it.

How does that argument square with the other argument, uttered in the next breath by the same people, that wages councils are apparently a barrier to employment? The Government point to pay increases in wages council industries, allege that they are higher than the general level--although they are not--and imply that the level of wages in wages councils industries and services stop people being employed. The Government cannot have it both ways. They cannot say that wages councils are irrelevant and, in the same breath, say that they are a barrier to employment.

If wages councils are abolished, there will be a cut in pay for some of the lowest-paid employees in the country. The Government will be giving vent to some of their worst and most grotesque ideological prejudices. They are throwing a bone to their right wing, saying, "Don't worry about Maastricht. When all is said and done, we can produce a Bill that will have a go at low -paid workers and the unions." That is what the Bill is all about.

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We have got used to the Government saying that inequality and poverty must be tolerated. We do not accept that, but we have got used to them saying it. We do not and will never accept that inequality and poverty must be deepened and increased, which is the basis of the Bill.

It is time that Conservative Members showed some honesty about how low they are prepared to watch wages fall. We have yet to receive an answer to the question whether they think that £2.78 is too high a wage for a hairdresser. Is it? We have yet to receive an answer to the question whether £2.92 is too high a wage for someone working in a restaurant. We have yet to have some honesty from the Government about the responses that they have received to the proposal, about the fact that the majority of responses opposed the abolition. We have yet to have some honesty from the Government about what the employment effects will be and the fact that even some of their own studies offer no clear evidence of employment increasing if wages councils are abolished. As my hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson) made clear, if wages councils were such a barrier to employment, how is it that employment in wages council industries and services has increased in recent years?

We need the Government to show some honesty about the disproportionate effect that the abolition of wages councils will have on women. Eighty per cent. of employees covered by wages councils are women, and the only answer we have had from the Government is, "Don't worry about that because in the main they contribute a

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second income." The Government then have the gall to get upset when we accuse them, rightly, of advancing the argument about pin money. The Government should be aware that there are challenges in Europe to the proposed abolition of wages councils and its relationship to the treaty of Rome. I have no doubt that, in a few weeks, we shall hear of another miraculous legal opinion which proves that it does not matter.

In the west midlands, 270,000 employees will be affected if wages councils are abolished. As in other parts of the country, that means about one in every 10 households. If only 20p an hour were taken off the pay in wages council industries, £50 million would be lost to the west midlands alone. That is not about boosting the economy or increasing prosperity ; it is about cutting pay. There is no suggestion among my constituents that it is the low-paid workers who cause unemployment. They know that it is Government policies and the recession that they have created and deepened.

In my city of Birmingham, a 33-year-old cafe assistant works 25 hours a week at the rate of £2 an hour. Her legal entitlement is £73 but she received £50. That is an illegal underpayment. I wonder why the Government do not put the emphasis that they put on the Bill into tackling that sort of problem, because the Bill will make such underpayment legal. In Committee, Conservative Members said that they did not condone illegal underpayment, but the Bill will legalise underpayment.

What will be the position of that cafe worker in the brave new world of voluntary bargaining? If she goes to her employer after wages councils have been abolished and exercises the free will, which Conservative Members impress on us that she has, to bargain with her employer for an increase in pay, her employer can sack her on the spot. When he does so, she will have no legal redress. A few years ago she would have had some legal redress, but, under present Government rules, because she has worked for only 10 months she has none.

Why have the Government, who want to abolish wages councils, a ratio of wages inspectors to workers covered by wages councils of 1 : 40,950? Compare that with the Government's cause celebre, alleged social security fraud. Even on a--I apologise for using the word--conservative estimate of the number of staff in social security offices who are engaged in tracking down alleged social security fraud, the ratio is 1 : 14,000.

We have had a lot of flannel from the Government Benches, but I wonder who will be seen to have won the argument when the report of tonight's debate and our proceedings in Committee are read. Hon. Members on both sides of the House have said that the Government are wrong to scrap wages councils. The Government have not even managed to summon one Conservative Member to defend them today. As my hon. Friend the Member for Wallasey (Ms. Eagle) said, in Committee we heard one and a half sentences from the Minister in answer to six hours of debate.

I have no doubt about the will of the House tonight and who has won the argument, but I suspect that, irrespective of the argument, when it comes to the vote Conservative Members who have not been prepared to back up the Government's argument will troop through the Lobby in their support.

I urge hon. Members to support the new clause and to reject what has been put forward by the Government. We

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are in the era of citizens charters, but there seems to be no citizens charter for the low paid--quite the opposite. What we have here is a charter for poverty pay put forward by "Citizen Michael" and "Citizen Gillian" which we should reject.

Mr. Hutton : This has been a significant debate for two principal reasons. First, if I am right and we lose the vote tonight, we will be marking the end of a consensus that has united both sides of the House for more than 80 years. That consensus is a matter in which the House can take pride. For that length of time, during two world wars and Governments of intense ideological commitment, both sides of the House have remained committed to the idea that it is appropriate and right for the House to set minimum rates of pay for the lowest-paid workers ; those workers who do not have the benefit of collective organisation through the trade unions and who look to us in the House to guarantee them some basic decency and minimum rights in terms of their workplace.

In Committee we heard arguments from the Government about the rationale behind their proposals, but their case was pathetically shallow and superficial. They presented no economic case for the abolition of the wages council and, as many of my hon. Friends have pointed out tonight, there is no economic case for abolishing the wages councils. If we were to abolish them, the same or a declining number of people would simply work for less wages. There would be no stimulus or boost to the employment prospects of tens of thousands of people in our country who are currently out of work. The abolition of the wages councils would simply depress wages for the most vulnerable and exposed section of the work force. That is a contemptible and sad thing for even this Government to be attempting at this moment. When the recession shows no sign of ending and unemployment shows every sign of increasing, the Government's response is to abolish the wages councils, and that is contemptible.

The consensus to which I have drawn attention is worth spelling out and looking at. It represents a philosophical approach, the guaranteeing of statutory employment rights, which is commendable. As part of my preparation for tonight's debate I made an effort to look at speeches made by the then Secretary of State, now the noble Lord Prior, when he spoke for the Government during the debate on the Loyal Address in May 1979. He made an observation which still commands much respect in the House. He said :

"The law should always give full recognition to the inherent weakness of the individual worker vis-a-vis his employer".--[ Official Report, 21 May 1979 ; Vol. 967, c. 824.]

That is a perfectly credible and coherent philosophical approach for hon. Members to embrace again tonight. Ultimately, we are discussing not just the issue of low wages, which is significant and should command attention, but a broader vision of the role of the House in establishing minimum employment rights. It is significant that, for example, when we consider other transactions, other contracts, there is no reluctance on the part of the Government or the Opposition to intervene in the marketplace and establish minimum terms and conditions on which parties can contract.

I think, in particular, of the law relating to consumer protection which has dominated much Government thinking for the past 20 years. Consumerism has become an important issue and Governments of both parties legislated extensively throughout the 1970s to intervene

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directly to protect consumers. That is perfectly credible because it recognises the fact that, in a normal marketplace transaction, the consumer is often in a weak position. He is unable to negotiate on a one-to-one basis with the supplier of goods and services, and Parliament, through a number of different devices, has intervened to protect consumers.

When it comes to employment protection rights and to protecting the rights of workers, I am afraid that we see a completely different approach from the Conservative Benches. They embrace the notion of the market and express the idea that workers, uniquely, are in a position to negotiate on a one-to -one, head-to-head basis with employers from a position of equal bargaining strength. Opposition Members know that that is simply not the case ; it is not a description of the real world. That was recognised in 1909 when the House first established the wages councils. Until this Bill was presented to the House, that was the position embraced by hon. Members on both sides of the House.

The other significant thing about tonight's debate is that those Conservative Members who have spoken--we have heard two excellent speeches from Conservative Members tonight, both ex-Ministers in the Department of Employment--have spoken out against the Government's proposals. The Government have not been able to find one hon. Member to make the case in favour of the abolition of the wages councils. The Minister shakes his head, but I have been in the Chamber throughout the debate and I have not heard one speech from a Conservative Member in support of the Government on this matter. [Interruption.] The Government have not found one Conservative Member to speak in favour of their case.

We have heard much waffle from Ministers during the past few weeks about the inherent logic of their decision to abolish the wages councils. For example, the Minister says that they are no longer necessary in the labour market of the 1990s. He has produced not a shred of evidence to support the case that the wages councils are not necessary. The Conservative election manifesto, upon which he and his right hon. and hon. Friends were elected, significantly make no reference to the Government's ambition to abolish the wages councils.

As we are debating a number of issues relating to the clause and the ethos of employment protection, it is worth pointing out that the oblique reference to the Government's philosophical commitment is to be found on page 20 of the manifesto which says :

"The workers' rights we believe in are those which enhance the individual's status and opportunities."

The abolition of wages councils will do none of those things. It will not enhance the rights of workers or their status, and it will expose them to what I can only describe as the real prospect of significant exploitation by a group of cowboy employers who are rubbing their hands at the prospect of being liberated from the constraints of the wages councils. That, for many millions of British people, will be a grim and horrifying prospect.

It is also worth pointing out that the Government are unique in their isolation among civilised nations in their ambition to remove from British employment law any minimum employment protection in terms of low wages. It is significant that the International Labour Organisation convention No. 26 has 100 nation state signatories, but only this country signed the convention and then deratified

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it. That shows that the Conservative Government are effectively isolated in the broad sweep of international opinion. No other country is going down this road.

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My hon. Friends and some Conservative hon. Members have drawn attention, rightly, to the remorseless drive to deregulate the labour market and have said that it will not produce the high-wage, prosperous economy that Conservative hon. Members, particularly the Government, pretend to have brought into existence after 14 years in power. We are a long way from that econony, from having that kind of society. I am sure that it is the view of all my hon. Friends that there is no doubt that abolishing the wages councils will accelerate the move towards a low-wage, low-prospect, poor- training, no-prospect labour market with increased exploitation and the prospect of many people working for wages which are disgracefully low.

As I said in Committee, it is an appropriate exercise of our power to make rules and to intervene on behalf of those people who, if they are left to the sheer force of the labour market, will find themselves working for unacceptable wages which we as civilised law-makers should not countenance. That is not a healthy development for this Parliament.

I hope that I speak for all my hon. Friends when I say that it is perfectly legitimate, in pursuit of a broad public policy objective, for this House to continue to express its support for wages councils in the full knowledge that if we do that tonight we shall not be adding to the burdens of employers nor adding to unemployment but doing something positive and constructive. I suspect that that is why most Conservative Members will not support us in the lobbies tonight, because they have a pathological aversion to doing anything that might improve the employment rights of British working people. It is important that we consider the abolition of wages councils against that background. They are an important part of the broad statutory employment framework that we have developed over many decades which has commanded until now a broad consensus of opinion on both sides.

We can describe the Government's intentions as, at best, wishful thinking in that they hope that the abolition of wages councils will increase employment and improve prospects in the labour market. It will not do that. That is wishful thinking ; it is a false hope. There is no evidence for it. It is a sad reflection of the Government's economic agenda that they present that case to the House tonight.

At worst, it is an example of cynical exploitation, exposing workers who deserve and look to this House for protection to the prospect of exploitation by employers who show complete contempt for the laws on minimum wages and wages councils and who will clearly take the opportunity offered to them by this Bill to lower wages even further for people who are already in the poverty trap. That is disgraceful and a pathetic reflection of this Government's ambition and their agenda, of their lack of imagination, in that this is all that they can come up with. I hope that hon. Members on both sides will have the courage and conviction to do the right thing and will reject the Government's shameful proposal.

Mr. Mike Watson (Glasgow, Central) : This has been one of the most stimulating debates in which I have

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participated during my years in the House. It has been particularly interesting to note the contributions from hon. Members not just in my party, which were excellent, but from the hon. Members for� Eltham (Mr. Bottomley) and for Broxtowe (Mr. Lester) who not only made excellent speeches but have stayed to listen to most of the debate. I hope they will be in the Lobby with us.

As to the rest of Conservative hon. Members who are here or who should be here--there are empty Conservative Benches--they should find no reason to oppose the two amendments that we are discussing ; nor should the Minister. We say in those amendments that if the wages councils are abolished, as the arithmetic of the House tells us they will in the course of time, and if it has the impact which we say it will, then the Minister should come here and tell us what he will do about it. Is that a frightening prospect? If he tells us that there will be no serious effect from this legislation, what is he afraid of and why is he opposing the new clauses? As so many speakers have pointed out this evening, the abolition of wages councils fits somehow into the Government's economic policy and clause 28 of the Bill has to be seen as part of the Government's intention to drive down wages, to bring about a low-skill, low-wage security and a no-hope work force that cannot stop cowering out of fear of being out of a job, desperate to take anything.

If ever there were an example of that, and the Minister seemed to dismiss it earlier, it was provided by that impressive and moving television programme last night, "Cutting Edge". The Minister demeaned it by making some rather trivial points about it. The programme gave a graphic description of the situation facing millions of low-paid workers. We saw a young woman desperately chasing round the country looking for work and we saw the way that she was treated. That seems inevitably to be the way in which such people will be treated, and even more so if abolition of the wages councils goes through. That surely will be the only result.

We have heard many arguments this evening but it is about the fact that, as my hon. Friend the Member for Barrow and Furness (Mr. Hutton) argued, the key word is poverty. People are living in poverty, being paid poverty wages even if they can find work. This Government should be showing them the way out of poverty, and giving some hope but in fact they are doing the opposite and saying, "If you have not got a job we will give you a job at £1.50 an hour." I can give countless examples from my constituency of people, in the centre of a major city, working for less than £2 an hour. I am not just talking about security guards. People in a hopeless position will of course grab at any lifeline. Does that mean we should be driving them further into the mire? Should we be saying to them--and let us get the figures right--"We think that if you are being paid between £2.59 and £3.10 an hour it will dissuade employers from taking you on"? That is what the Government are saying. If there were any doubt about that, my hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson), opening the debate, surely sank it decisively by showing that 90,000 new jobs had been created in wages councils areas at a time when unemployment was rising out of control.

I understand that the Minister failed to answer a similar debate in Committee, although I was not on the

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Committee. If he failed to do so, then he must answer it tonight and come up with a convincing reason, if he can find one, for saying that wages councils prevented employment being created and that they prevent employers taking on people they would be itching to take on if only they did not have to pay them £2.59 an hour.

We have heard many arguments about abolition of the councils, but we have to consider the effect on women because it has been said that 80 per cent. of the 2,500,000 people who come within the remit of wages councils are women. It has to be stressed that most women still work in what are traditionally regarded as women's jobs, usually low-paid and often undervalued.

We had a ministerial answer today showing that male workers' earnings are at present about £221 a week while women, mainly those working as hairdressers, are being paid only £110 a week on average while in the hotel and catering industry, which is also covered by wages councils, they are earning £126 a week. How can anyone say that that dissuades employers from taking people on? If the Government have an economic strategy to raise the country out of its present dire situation with unemployment about to go over the 3 million mark, even on the Government's own figures, how will they arrest that decline by this kind of measure? There are 4,500,000 part-time workers and 83 per cent. of that part-time work force have limited career prospects and involve the sort of women we saw on television last night. Despite the role they play in manufacturing and service industries, the Government give no credence or value to that area of work. I hope that the Minister will answer the points made about the typical role of women in society and in the work force.

The Secretary of State does a great disservice to her gender by suggesting that women have no economic role and no contribution to make to production or to the economy of the country. Surely the time is long overdue for the value of women in the work force to be recognised and for the Minister and his right hon. and hon. Friends to give some thought to the effect that the abolition of wages councils would have not just on women but on their families, and increasingly on those women who are, despite what the Minister has said, the breadwinners in many cases.

Many hon. Members have mentioned the situation in their own areas and I would like to say a few words about the situation in Scotland. Underpayments within Scotland in the period 1987-91 increased by 128 per cent. That is a higher figure--I take no pride in this--than in Wales or any of the English regions. In this connection, I would like the House to consider an aspect that has not been raised in this debate : the enforcement of the decisions of the wages councils and the rates that they have set for the past 80 years.

In 1991, in Scotland, only 7.5 per cent. of employers were visited by wages council inspectors, and 28.6 per cent.--that is, about 750--were found to be underpaying. The wages council inspectors get round far too few employers because of the shortage of staff, but, of those 737 who were underpaying, only two were prosecuted for paying below the set rate. So nearly one third of the employers were found to be paying below the rate-- breaking the law, it should be stated again. They should be thrown out of the party which claims to be the party of law and order. But only two were prosecuted, and the rest were let off scot free.

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The Government consistently rail against what they call social security scroungers. They ought to turn their attention to the Scrooges who, apparently without any shame, return home every evening and sleep soundly, despite the fact that they are making their money out of paying people less than £2 an hour. What service do they perform for society? What assistance do they give to the development of the economy?

The Government would have us believe that they are doing everybody a favour. There are no restrictions on the levels of wage that they are allowed to pay or on how they can treat people. They can hire and fire at will, and they regularly do, within the excessively long two-year period through which people have to qualify for what are normal, generally acceptable rights at work in other countries. Rather than doing the country a favour, they are doing only themselves a favour. The Government are aware of that, but those are their friends ; they are the people in the companies that make contributions to the Conservative party. If there is any logic in this clause in the Bill, it is that the Government are repaying the debts which they contracted during the general election campaign. That may be some form of twisted logic, but it is not a justification.

The situation is that evasion in terms of enforcement of the legislation triumphs over provision, sneer triumphs over fear--again a reference to the television programme last night--and greed triumphs over need. We in the Opposition at least are prepared to say that those in need are those to whom we will give first consideration, and that we will attempt to develop policies which will assist them in raising their standard of living and getting a decent job and a decent wage which will allow them and their families to live with some dignity.

To some extent, my hon. Friend the Member for Birmingham, Northfield (Mr. Burden) touched on an interesting statistic--the number of wages inspectors which is currently 61. We have to contrast that figure with the number of inspectors dealing with benefit fraud. About 2.5 million people are covered by wages councils, with 61 wages inspectors to enforce the law on their behalf. There are some 3 million unemployed, at least, yet 780 inspectors are involved in enforcing the law on benefits. That is hardly a balanced approach. We would not necessarily expect a balanced approach, but the prejudice which the Government show against the poor in society, the powerless and the helpless never ceases to amaze me, yet never seems to cause any kind of shame or embarrassment to Conservative Members. It is a situation which I and my hon. Friends will continue to expose at every opportunity. The Government cannot be serious about their attempts to regenerate the economy, for green shoots to begin to grow, if the only way that they act is to force people to earn less. I refer, as the hon. Member for Banff and Buchan (Mr. Salmond) did earlier in the debate, to the comments by the Secretary of State for Scotland yesterday, speaking at Edinburgh university, about people pricing themselves into jobs. The Minister of State, who nodded vigorously when that point was made, should tell us what is meant by people pricing themselves into jobs. Why is it that the people at the bottom have to reduce their salaries to make themselves employable, yet directors of the public utilities now privatised, or in industry, can only price themselves into jobs by going as high as possible, by going into figures like telephone numbers for salaries? Perhaps the Minister,

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in winding up, will tell us why there should be such a difference between the top and the bottom of the scale, and why, when push comes to shove, his efforts and his friends' efforts will always be against those at the bottom and in favour of those at the top. There is no logic to that, but I look forward to hearing the Minister's explanation.

I know that many hon. Members wish to speak in the debate, and it has already run for some considerable time, so I will bring my remarks to a close. I am not in any sense exaggerating when I say that the "Cutting Edge" programme last night had a profound effect upon me. It was not just the woman herself, who was, of course, a journalist and to some extent was cushioned from the long-term effects of her experiences over the three months. I was concerned about the people that she was meeting on a daily basis. She was asking them about their wages and why they had never done anything about them, and it was quite clear that they were afraid to raise the matter. We did not learn whether the sectors in question were unionised ; I suspect that almost definitely they were not. But the point is that those people are afraid to raise so much as a question with their employers about the rates of pay, the hours they work or the conditions that they have to face, because they are terrified that they will lose their jobs.

That is the situation, because of the desperate state of our economy, and it is a situation that the Government seem to be prepared to accept and make the basis of our economic recovery. It is a scandalous and indefensible position.

The woman in the programme slogged away at a number of pitifully paid jobs and, as if that were not bad enough, had to demean herself by going some 40 or 50 miles to her employer's house to beg for £75 that she had already earned and was entitled to. Then she had to make all kinds of desperate pleas before she got the money. What stuck in my mind at the end of the programme were two words which she used to describe her position and which she felt adequately described the position of the people with whom she had been working for the three months of the programme. She said that she felt powerless and invisible. That is with wages councils in existence, and she still felt powerless, invisible and unable to do anything about it. How much worse will the situation become when those wages councils are abolished?

The Government may well be prepared to abandon these people, to be pleased that they are powerless and to regard them as invisible. Opposition Members are not ; we will not abandon them ; we will continue to defend them. If the wages councils are abolished, it will be scandalous. None the less, those people can find some solace from the fact that there are those of us who are prepared to stand up for them, argue for them and ensure that they get a decent standard of living and a job that enables them to live with dignity. That is something which the Government and the Ministers will have to live with if they proceed with this obnoxious suggestion of abolishing wages councils.

Mr. Robert Ainsworth : I shall be as brief as I can, having been allowed to speak on the earlier clause.

We sat for a couple of months in the Committee discussing the issues and, at the end, were congratulated by the Chairman on having dealt with some politically controversial issues in a correct parliamentary way. The only time when that broke down was during the discussion on the abolition of wages councils, when there was a great deal of anger on our side of the Committee. I cannot quite

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get the anger out of my system now at the proposal under discussion and I know that that feeling is shared by many of my hon. Friends. The proposal is born of a number of things. It is born out of right-wing ideology and, as has been said by one or two Conservative Members, originated from the think tanks. It is born out of the naked protection and enhancement of vested interests. The only company to have been quoted by the Minister in Committee as having made representations in favour of the abolition of wages councils is Forte. When we pushed the Secretary of State for Employment for a response as to who had made representations to her in favour of the abolition of wages councils, she mentioned hoteliers. The measure is the product of the representations of vested interests.

As was said earlier, the measure is also the product of the instability in the Government. Against the backwoods-men in their own ranks, they are attempting to push through some pragmatic policies on Europe and they are having to dress themselves up as right-wing ideologues to attempt to keep their coalition together and maintain some semblance of unity. They are doing that at the expense of the weakest people in society.

There is no justification for the abolition of wages councils ; we heard none whatsoever in Committee and we have yet to hear any tonight. We all wait with bated breath for the Minister to stand up and give us the first justification for the abolition of wages councils. What we have heard from him is Orwellian double-talk about the abolition of wages councils. He asked why, although the Labour Government abolished certain wages councils, Labour Members are now opposed to the abolition of wages councils. The position is now totally changed. If a wages council had become completely and absolutely obsolete, as many of them did because they no longer provided a safety net as the bargaining arrangements within a particular industry had taken the rates of pay way above any national minimum, at a time when standards of living had risen across the board and there was sustained full employment, there was obviously no need for certain wages councils to continue. They became an anachronism and a complete waste of time. We are now talking about the abolition of the remaining wages councils when the need for them has never been greater in modern times.

Statistics on current living standards which have been released by a number of organisations prove that the gap between the richest and the poorest in Britain is wider than it has been since 1886. I suggest that the conditions prevailing in 1886 led right hon. and hon. Members at the time to the conclusion that there was a need for some safety-net legislation on wages. That was the reason for the introduction of wages councils in the first place. We are now moving back towards a position in which that legislation is necessary. The reason for its existence is the reason behind the proposals for its abolition.

The only weakness in wages councils is the refusal effectively to enforce existing legislation and to extend it to areas where it is clearly inadequate. Some new industries are not covered by wages councils when they should be--the example that always jumps out at me is the security industry, where there are the most appalling rates of pay

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--yet the Government have refused to extend wages councils legislation into those industries. Now we are faced with the total abolition of the system.

In Committee we heard arguments from Conservative Members--although we have not heard any such arguments from them tonight--for the total application of the market. This is not a debate on the economy and we have to decide for ourselves whether the Government in this day and age and in a so-called democracy have any role to play in saying that a certain standard of living should apply to the citizens of our country--not an extravagant standard by any means, but some minimum standard that we believe it is our responsibility to protect. If we do not believe in that and if we do not believe that the Government have any responsibility in those matters, we should vote for the abolition of wages councils, but if we do, we should oppose it. We are talking about a blatant abuse of privilege and power at the expense of the weakest in our society. That is what the Government are attempting to push through the House tonight without any adequate defence of their proposals.

Mr. Michael Forsyth : We have been discussing amendments about producing reports to Parliament, but we have heard a number of speeches about the principle of the abolition of wages councils and I shall try briefly to deal with some of the arguments that have been made tonight.

The most extraordinary statement that has been made repeatedly by a number of hon. Members was the criticism of my right hon. and hon. Friends for not having made speeches in favour of Opposition amendments. It is true that two of my hon. Friends did so, but it is for Opposition Members to make their own case for the new clause and amendments that they have tabled.

A number of hon. Members have drawn attention to the attendance on the Conservative Benches. I will not embarrass Opposition Members by pointing out the attendance on their side of the House. Those arguments do not advance their case.

Mr. Salmond : Will the Minister give way?

Mr. Forsyth : No, I shall deal with some of the arguments first. There has also been a disgraceful suggestion, which came first from the hon. Member for Holborn and St. Pancras (Mr. Dobson), that the proposals to abolish wages councils had something to do with vested interests in the Conservative party.

The hon. Gentleman might like to reflect on the position that the Labour party has taken on the matter. The Labour Government abolished 11 wages councils. They did so because the trade unions asked them to do so and it is the trade unions that run and fund the Labour party. If the hon. Gentleman wants to talk about vested interests, he might reflect on the fact that the Labour party's position on wages councils has been stood on its head as the trade unions have changed their position from opposing wages councils to being in favour of them.

What has brought about that transformation? I venture to suggest that the Labour Government abolished wages councils at the behest of the trade unions because the trade unions believed that they could organise collective bargaining on a scale which would mean that they would be able to recruit members. As their membership has

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declined, they have decided that wages councils are quite good because the members of the unions can sit on the boards of wages councils and determine wages and conditions, although they are no longer able to attract the membership which gives them the authority to do the same. Let us not hear anything about vested interests in wages councils.

Mr. Malcolm Chisholm (Edinburgh, Leith) : Will the hon. Gentleman give way?

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