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wages councils were abolished by the previous Labour Government. One of them was the council for the motor trades. The trade unions, through both organisation and the influence of their negotiations, increased the levels of pay. The wages councils legislation provides that the Secretary of State can lay an order to abolish a wages council where there is an alternative effective means of determining pay. I support that.

On the last Sunday of the 1979 election campaign I went to the Wembley rally as president of the Conservative trade unions. We demonstrated to trade union members and their families that they could cheerfully vote Conservative because the Conservative party understood the interests of working people and their families. Not many of them believe that we have changed much. Not many of them believe that we have changed since 1985, when I expressed to the House the views of the Government on the operation of wages councils. We struck out many of their complications. We proposed that they should not apply to people under the age of 21 because having the chance to start work is far more important than the level of pay at that age. The chance to start work becomes less important to people aged over 21.

I agree with hon. Members on both sides of the House that we should invest more capital so that wages costs become less significant in the cost of production. When I was a Minister in the Department of Employment there was an investment of a quarter of a million pounds for each person employed in glassmaking. Increasingly in offices and retail more money is invested in the system of distribution. The level of pay is not that important. In hotels and other service organisations, investment in cleaning, catering or other equipment can be increased so that the level of pay becomes less important. Yet my hon. Friend the Minister pretends to the House that wages councils have a significant effect on employment.

The challenge to the Government is, first, to explain why they did not make it plain before the last election that abolition of all the wages councils was on the agenda and, secondly, to make plain what they believe will be the employment effect of abolishing the wages council for those at present on or below the minimum rates. I do not want to hear about a statutory minimum wage for everyone. I do not advocate that. I want to hear what will be the effect of abolishing what we have now.

Mrs. Alice Mahon (Halifax) : I, too, watched the "Cutting Edge" programme last night. It was about the experience of a young reporter who went underground and worked for low and, indeed, illegal pay. Her experience mirrored that of many of our constituents, particularly my constituents in Halifax and the Calder valley, which is well known as an area of low pay.

The young woman's experience was identical to that of someone who wandered into one of my surgeries who earned £12 a day. A young man to whom I spoke a few weeks ago earned the same. That works out at £1.50 an hour, which is less than half the legal wage for that job. As my hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson) said, the legal wage is hardly a princely sum at £3.08 per hour. The employer of the boy who came to my surgery knew that he was breaking the law. This is something of which the Minister should take notice. His Government are supposed to be the Government of law and order, but they are very selective in their policy on prosecution. It is all very well for the Secretary of State for

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Social Security to burst into Gilbert and Sullivan at party conferences, where he sings songs about prosecuting the poor and about the evil of the "something for nothing" society. It is quite wrong that people should claim benefits to which they are not entitled, but Ministers take a myopic view when they condone huge-scale law-breaking such as was depicted in the television programme to which I have just referred.

Mr. David Hanson (Delyn) : My hon. Friend talks about law-breaking. Does she know that she could go into any job centre in the United Kingdom and find advertisements for jobs which, despite their being in wages council sectors, pay rates below the minima set by the councils for which the Minister has direct responsibility? 7 pm

Mrs. Mahon : That is a very relevant point, which the Minister should address in his reply.

In 1991 in Yorkshire and Humberside, 34,996 establishments were registered with the wages inspectorate. A total of 1,639 workers in the region were found to be being illegally underpaid, with arrears assessed at £174,189--an average underpayment of about £106 per worker. I realise that the proportion of recovered arrears is quite high, but of the 1,777 establishments visited, 44.6 per cent. were found to be illegally underpaying. We know that the wages inspectors visit only a tiny proportion of registered work forces--5.1 per cent., I think. They tend to concentrate on the areas in which they feel that underpayment is most likely to occur.

The Minister is very reluctant to give figures, but I can say that, nationally, 5,971 establishments were found to be illegally underpaying. There were just 15 prosecutions--fewer than the 20 to which we have heard reference. In Yorkshire and Humberside there were only seven prosecutions for illegal underpayment. That should be compared with the number of people prosecuted for claiming benefits illegally. Such a comparison shows where the Government's priorities lie.

Mr. Michael Forsyth : Will the hon. Lady give way?

Mrs. Mahon : No. The Minister has intervened about four times. He is taking up the time of everybody else. Any point that he wants to make may be made in his reply.

In Yorkshire and Humberside, inspectors found 934 establishments that were failing to display wages council notices, 259 that were failing to keep adequate records of wages paid and 825 that were failing to keep adequate records of hours worked. I wonder why. Is this a major reason for the Government's negotiating us out of the social chapter in the Maastricht treaty? It is obvious that they are now into law-breaking on a massive scale. Perhaps they think that British workers would have access to European law if they had the same rights as European workers. We have a set of seedy, shabby, unprincipled Ministers presiding over this situation. They know that the law is being broken, but they do not care. Often there is no protection whatsoever for the people least able to protect themselves.

Last night's television programme showed how a reporter obtained a job in a private nursing home. The owner of the home--Mr. Majieson, a very wealthy man--employed the reporter as a laundry worker at £2.40 an hour, which is well below the legal wage. There are other implications for this floating work force. Their pay is so

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low that they move on, constantly hoping for something better. Alternatively, they descend into a state of despair. The reporter was given no screening for any type of disease, despite the fact that she was working in a nursing home ; she was given no instruction on health and safety ; she even had to request rubber gloves, despite the fact that she was handling foul, soiled linen. On a number of occasions she was warned only after the event that she had been handling the soiled linen of a patient who had scabies.

This is not a marginal problem. If the wages council were overseen properly, if the inspectorate were doing its job properly, and if we had a Government who cared about the law, the councils could play an important part in looking after the growing number of people who are working in the private sector of the care industry. In 1982, there were 18,200 residents in private nursing homes and 44,000 in private residential care homes. The numbers have escalated. We are not talking about a marginal problem. We now have 109,000 people working in private nursing homes and 155,000 in private residential homes. We know where these homes are. Every local authority and every health authority has powers of inspection. It would be relatively easy to check on the wages being paid to employees, but the Government make no attempt whatsoever to do so. I am sure that if they were to take such a step they would find hundreds, if not thousands, of people being paid illegal rates.

The situation will undoubtedly get much worse when the wages councils are abolished. I am sure that there are many wealthy Mr. Majiesons who are breaking the law with impunity. The Minister must tell us why he and his colleagues preside over a Department that allows such a situation to continue.

Mr. Alex Salmond (Banff and Buchan) : The hon. Member will have noted that, now that the Secretary of State for Employment has joined her colleagues on the Front Bench, there are more Front-Bench Conservatives than Back-Bench Conservatives in the Chamber--and it is clear that the Back -Bencher who has just made such a fine speech was not invited by his Front Bench. Does the hon. Lady agree that there must be many guilty consciences around the various fine restaurants and bars in the Palace of Westminster this evening?

Mrs. Mahon : Indeed I do. The hon. Gentleman has made a very relevant point. Many of those hon. Members may have a vested interest and may want to stay out of the way because they themselves are private contractors who have done these things to people. Wages councils are relevant to the protection of 2.5 million, if not 3 million, workers. If we go back to a system in which employers can pay whatever they want, we shall have a new form of slave labour. The Minister has his roots in the 19th, if not the 18th, century. The abolition of wages councils will not result in the creation of any more jobs. Cuts in the pay of already low-paid workers will reduce their spending power at a time of recession and will increase their dependence on state benefits. If the Government, having listened to the arguments in Committee and in the Chamber, still make the case that low pay is necessary to a successful economy, how do they explain the success of the German economy as compared with that of a country like Bangladesh? I do not think that

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there is much chance of our winning this vote tonight, but I hope that the Government will reply to some of the points that I have raised.

Mr. Alex Carlile (Montgomery) : It is interesting to see such a dearth--indeed, a total absence--of Conservative Back-Benchers wishing to take part in this debate in support of their Front Bench. We may finish the debate having heard only one Conservative Back-Bench speech--that of the hon. Member for Eltham (Mr. Bottomley), who spoke most eloquently against the Government's view. What an ironic situation.

It seems to me that one searches Ministers' speeches in vain for one of the three cases that they might make for the abolition of wages councils. One looks for a moral case, an economic case or a political case, but one finds none. Indeed, in the 1909 speech of Winston Churchill to which reference has been made the moral case not against but for wages councils was made out very eloquently : "We believe that decent conditions make for industrial efficiency and increase, rather than decrease, competitive power."

That remains true today. The Government have failed to produce any evidence, let alone any cogent evidence, to the effect that competitive power and industrial efficiency will be increased by the abolition of the wages councils. Although wages councils no longer apply to workers aged under 21, there is evidence that the difference between the wages of workers aged under and over 21 in the same industry increased after abolition.

The Government seem to be claiming that 80 per cent. of people who work in wages council industries are in households in which another wage is coming in. I think that I heard the Minister express that view in one of his many interventions. What is the Minister really after? Is he after the sort of low-wage, many-job economy that those who visited central and eastern Europe before the political changes were used to seeing?

I recall getting into a taxi in Budapest a few years ago and being told by the driver that he was a professor of philosophy in a Budapest university, but to make ends meet he needed at least one other job. It was common to find people with two or three other jobs, working every hour possible to eke out a living. The Government seem by their policies to be aiming for that sort of economy.

A TUC survey suggested that four out of every five people involved in a wages council industry were female. Those statistics are undoubtedly right. It is ridiculous for the Government to suggest that all those women are secondary income earners. A 1990 labour force survey showed that 20.3 per cent. of wages council workers were single parents, compared with 13.8 per cent. of the general population. So it is self-evident that a single parent with no other source of income is 50 per cent. more likely to be employed in a wages council industry. The wages council for those single parents, female or male, is well worth having.

It is inevitable that overall wages will decrease following the abolition of wages councils. The effect will be to increase poverty and that will most strikingly affect single parents. The Government do not put forward a moral case, but an immoral, even an amoral, case. Their case is tainted by an acceptance that poverty is an acceptable element of a supposedly civilised economy.

Is there an economic case? In its defence--I emphasise "defence"--of wages councils, the Institute of Management says that any good employer who attempts

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to maximise profits will automatically and sensibly set wage rates at a level at which the productivity and calibre of workers is reasonable. The institute accepts that wages councils give a valuable guide towards realistic wages levels. An efficient industry is surely one in which the workers are at least reasonably content and are prepared to work longer hours for their wages because they are worth having.

I recall visiting Poland and talking to a privatised industry's chairman just after the political changes there. He described how difficult it was for him to find new workers for his factory, even though he had work for them. The reason was that wages had gone so low under the old communist regime that women in particular thought it was no longer worth working. Wages were set at such an impoverished level that it was not worth doing anything other than rely on the state. There is a danger of that happening if wages councils are abolished.

One is left with the conclusion--if there is no moral or economic case for their abolition--that the Government are relying on a political case. But such a case has yet to be explained to us. As the hon. Member for Eltham pointed out in his powerful speech, if there was such a good political case to be made, that case and the evidence supporting it would have appeared in Doctor Major's casebook, the Tory election manifesto on which the Conservatives, by a squeak, won the election again last April. There was nothing to support that case in the Tory manifesto. We have before us a proposal that has not at any stage been supported by any cogent argument. I hope that the House will vote against abolition tonight.

7.15 pm

Mr. Hanson : It was a pleasure to hear the contribution by the hon. Member for Eltham (Mr. Bottomley). I had the privilege, with many of my hon. Friends here tonight, of discussing the Bill for weeks and months in Committee, during which not a Conservative Member showed an iota of concern for those who will be affected by the abolition of wages councils, the people whom we are seeking to help.

The abolition of wages councils is a squalid part of the Bill, which we shall take pleasure in opposing in the Lobby. While we shall no doubt lose the vote, though not the argument, I trust that the Government will at least listen to the concerns that my hon. Friends and I are expressing as we debate the various clauses and amendments.

We are debating a squalid piece of legislation. Like many of my hon. Friends, I support the establishment of a minimum wage. Indeed, many of us fought the last election on that basis. Some former Conservative Members lost their seats because they opposed the concept. We must have a base line below which people are not allowed to fall, especially in environments which my hon. Friends have described, in which unions are not in place and in which workers are isolated. In some circumstances, workers face tremendous odds in making their voices heard.

Mrs. Audrey Wise (Preston) : Does my hon. Friend accept that wages councils are necessary even in some industries where trade unions are in place, such as in retailing, because of the nature of the trade? It is an irony that the Bill will make it harder for workers to organise into trade unions, which means that we are faced with a terrible Siamese twins-type Bill because it makes it harder

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to achieve powerful trade unions and at the same time makes it more essential for there to be powerful trade unions, as every other form of protection is stripped from workers.

Mr. Hanson : Having worked in the retail sector at the beginning of my career, I am well aware of the low wages, long hours and poor conditions that many in that sector must endure. I have been staggered during the debates on this issue by the way in which Conservative Members do not accept that Britain remains a low-paid, low-income society. The Bill, rather than strengthening people's rights and developing better pay and conditions, will continue to reduce the conditions and standard of living of many people. There are still 6 million women earning below the Council of Europe's decency threshold. We still have 12 million people on income support, with 2.5 to 2.6 million workers covered by the wages councils that the Government want to abolish. Wales, my region, has the lowest levels of pay in the United Kingdom, currently 87 per cent. of the national average. If the Government press their proposals, the 147,000 people who work in clothing manufacturing and who now earn the princely minimum wage of £102.86 per week, or the 492,000 licensed residential workers who earn £113, will undoubtedly find their wages reduced.

There is overwhelming evidence that the abolition of wages councils will reduce wage rates in those industries, will have an impact on increasing family poverty, will force more people into state subsidy through benefit, will not lead to net job creation and will remove much valuable legal protection. The Labour party has opposed the legislation from the beginning. In Committee we cited strongly the views of the Equal Opportunities Commission, a Government-sponsored body. We also cited the views of the Fawcett Society and the citizens advice bureaux. My citizens advice bureau in Flint lobbied me and put forward suggestions for widening the scope for wages councils to include private nursing homes and the security trade. The Trades Union Congress, the Low Pay Unit, the Institute of Management Consultants and many employers wrote to hon. Members during the Committee stage, saying that the abolition of wages councils was wrong, would not achieve the objectives sought by the Government and would hit hard those who were already suffering

In Committee, with all that weight of evidence in front of him, what did the Minister produce? He produced one solitary letter from Forte, contributors to the Conservative party, who did not even have the courtesy to send the letter to every hon. Member serving on the Standing Committee. Like many of my hon. Friends, I received not one letter nor one piece of evidence to support the abolition of wages councils.

The proposal has no logic. My region in Wales is the lowest-paid region in the United Kingdom. The abolition of wages councils will affect 109,500 workers in Wales ; that is one in ten of the work force.

Underpayment has already been mentioned. The reports of wages councils inspectors show that in different parts of Wales 32 per cent. to 41 per cent. of establishments were underpaying their employees. Those underpayments are being made even when it is a criminal offence and there is a check by inspectors. Unscrupulous employers, those

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who were said by Winston Churchill to undercut good employers, continue to underpay when there are legal checks.

I would welcome the Minister's comments on what will happen when wages councils inspectors have been removed, when underpayment goes underground, and when companies can get away with it because it is no longer a criminal offence. What will happen to the people who need support from the state to get a basic wage? We are not talking about vast burdens on employers but basic wages, low, poverty pay for people who need a strict mechanism to defend them from unscrupulous employers.

In Wales, if wages fell by only 10p per week £394,500 or £20 million a year would be lost to the local economy ; one in ten households would be affected.

Mr. Oliver Heald (Hertfordshire, North) : Will the hon. Member give way?

Mr. Hanson : Absolutely ; I am glad that we have at last provoked a Conservative Member to say something.

Mr. Heald : When the hon. Gentleman says that the local economy would lose that amount of money, is not that only if no new jobs were created? Is it not the contention of the Government that new jobs would be created? Is not that a laudable and moral aim?

Mr. Hanson : The hon. Gentleman sat in Committee with me for many hours. If wages are reduced, no new jobs will be created. Workers will work harder for poorer pay and people who control the industries will take bigger profits. There will be no increase in jobs.

Mr. Graham : My hon. Friend will realise that the hon. Member for Hertfordshire, North (Mr. Heald) expects people to work for 10p an hour. The Minister expects people to work for nothing ; he said that in Committee.

Mr. Hanson : My hon. Friend makes an apt observation.

As to the impact on the local economy in my region, my borough council, which is not Labour controlled, has written to me about its concern in regard to the loss of wages. If there is a knock-on effect, there will be greater unemployment. The people on wages councils rates do not go out and buy Alfa Romeos ; they do not holiday in Barbados, nor do they buy Italian imports or fine suits of clothes. They go to the local shops to buy local food, they use local transport and they pay for things locally, boosting the local economy. If the money is taken out of the local economy, there will be a knock-on effect, particularly in areas like mine which relies highly on tourism.

Mr. Jimmy Boyce (Rotherham) : We have heard much about spiteful policies. Does my hon. Friend agree that the Bill is not the result of a spiteful Government policy, but rather the result of a philosophical policy? If a more caring Government tried to operate the capitalist system and the philosophy of capitalism that the Government purport to operate, it would have the same effect, with decimation of conditions for working people. Does my hon. Friend agree that the Government are not capable of implementing a policy that is fair to working people?

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Mr. Hanson : My hon. Friend makes a valid point. The Government want to force down the wages of those in the low-paid sector. The National Institute of Economic and Social Research has estimated that 25,000 jobs will be lost through the knock-on effect of spending cuts because of wage reductions. That will have a major effect on many industries.

I want to give a constituency example in support of the new clause. Just after I was elected, the husband of a constituent came to my surgery because the constituent was too frightened to come. The husband said that, because the powers of the wages council for the hotel trade were being reduced, the workers were not being paid overtime. They were being forced to work overtime on Saturdays and Sundays ; if they did not agree, they were told to go because there were plenty of others to take their jobs.

I complained to the wages council inspector, who visited the hotel. He enforced the legislation and made the hotel chain pay the workers a decent overtime rate. The workers had a choice about doing overtime, because people who work in hotels have families too.

If the Government do not accept the amendment and do not undertake to consider the social implications of the abolition of wages councils, and if they proceed to abolish wages councils, what redress will there be for my constituent who is not a member of a trade union and who is only an individual employee in a massive hotel chain? My constituent will have no redress. She will be a cork, bobbing on the waters of a large company, to be washed up anywhere the company chooses to send her. That is not right.

We are are talking about basic rights. What is the objection to monitoring the working conditions and wages of lower-paid workers, and having a report back to Parliament? What is the objection to monitoring the effects of this vicious legislation? There should be no objections. That is why I hope the Minister will support the new clause.

Mr. Jim Lester (Broxstowe) : I wish to speak in support of my hon. Friend the Member for Eltham (Mr. Bottomley). Way back in history, when I was in the Department of Employment, I was responsible for wages councils. I always supported the principle of wages councils, although I also supported the move to improve their operation by taking away many of their peripheral responsibilities which tended to cloud the issue. Certainly I supported them in looking after sectoral interests and low-paid people.

I am well aware of the argument that the majority of people covered by wages councils earn more than the minimum level, but that does not justify their abolition because it is Parliament's responsibility--and I have always believed it was the responsibility of the Conservative party--to look after those who are least able to defend themselves, and not to stand back and allow those most able to defend themselves to roar away.

We have had many battles with the various think tanks, which purported to support my party but which, in many ways, have led it from the origins and the true traditions of Toryism. The think tanks argued that social security is the level of the basic minimum wage. That statement is offensive, and I find it impossible to support it.

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7.30 pm

I am chairman of the Family Budget Unit, which is made up of academics and people with great expertise on living costs. We have done a great deal of work on what the family budget should be if a family is to have a minimum standard of living. I am sure that many hon. Members have seen the results as they have been published and many people are asking for them. Hon. Members should examine our report section by section. For example, we say that the food bill for a family of four will be £40 or £50. I often tell my wife, "Darling, this is what the Family Budget Unit says that you should be feeding our family of four on." She gives me a short, sharp reply and shows me the bill from Sainsbury's, which is almost always double or treble the amount that the unit thought necessary for a decent standard of living.

I am constantly amazed that anyone can cope or have a reasonable standard of living on social security. I recognise that even those people on a marginally higher wage find it enormously difficult to sustain a family.

To the Government's credit, they introduced family credit as a way to ensure state assistance for those people identified as living most in poverty--families with children. It seems odd for the Government to say that they want to support families through that scheme when, by abolishing wage councils, this Bill will increase the budget required to pay for it. In other words, we shall use Government money to subsidise low pay, especially for families, which seems a tremendous anomaly. Our thinking about the basic levels of social security and salaries required for people to live on ought to be much clearer, and we should think about protection for people who are least able to protect themselves.

Mr. Roy Beggs (Antrim, East) : Does the hon. Member agree that every worker who is responsible for a family deserves the dignity of being able to earn sufficient to provide for his family, irrespective of family credit?

Mr. Lester : Yes, I do ; but I also recognise that society has changed considerably. From working with friends in the United States and other parts of the world, I recognise that traditional forms of employment in which a man--nowadays with his wife's assistance--can earn a reasonable income are tending to change. The idea of working for the same firm for 40 years has long since gone. People have to get their salaries as and where they can.

From his experience in Northern Ireland, the hon. Member for Antrim, East (Mr. Beggs) will know that the old basic industries no longer exist. We must look to a different pattern of employment, which forces me to conclude that a basic income system, which does not retract if people earn more money, is the only way forward. That, however, is another argument and I shall not develop it today. My third reason for not supporting the withdrawal of the wages councils is that I have had experience of running a company for 25 years, and I made a profit in every year except one. I recognise that there are considerable variations in the terms and conditions of employment within industry. The great value of wages councils is that they took into account the conditions for a sector when considering the basic wage. For instance, in some sectors employees receive tips, but in others they do not ; and

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housing may come with some jobs. One cannot directly compare one job with another, and the wages councils acknowledge that. Wages councils have been reviewed twice since they were formed and tended to include a majority of employers. I cannot conceive why, if employers were in the majority, they could not work within the wages council framework to set satisfactory minimum salaries for their industry-- fair levels at which everyone could work.

I have listened to the arguments of some Opposition Members about job creation and also to my hon. Friends. The truth is that if people depress wages to produce goods at lower prices to sell them, it is more likely to reduce jobs than to increase them, because such employers would undercut those offering decent wages and standards. That is not a job-creation formula.

My last reason for not supporting the abolition of wages councils is political. At the next election it would give the Labour party a far stronger argument for introducing a minimum wage as the argument would be more powerful if there were no protection for people at the bottom of the scale. For the reasons that I have stated, I disagree with the arguments on the minimum wage. The wage would not take into account variations in terms of employment in different sectors of industry and would be too high for some industries, which would cause unemployment, or so low that it had no effect and was therefore not worth the legislation that it was written on.

The minimum wage is an alternative to the wages councils, but I support the principle of sectoral minimum wages rather than a national minimum wage. The political reason is that the abolition of the wages councils would give the Opposition a strong case to introduce minimum wage legislation at the next election. I do not agree with such legislation but it has wide appeal. From a study of the opinion polls during the last election, one can learn how popular that suggestion was with the general public. The Bill is one way to make it even more popular at the next election.

An ancillary argument is that people in this country, who have a sense of their own dignity, will not be pushed around or allow their wages to be reduced artificially and wrongly if they feel that that is an injustice. They will do something about it. What can they do? They can join a relevant trade union, or possibly a sectoral trade union, which might well form. Abolition of the wages councils would be a recruiting sergeant for the trade union movement, which was established to protect people whose employment was without protection. That is another reason why those of my colleagues who do not think as highly of trade unions as I do should think twice before supporting the abolition of wages councils. The suggestion that people will sit back and accept such treatment is contrary to my experience of what people feel when they think that they are being unjustly treated.

For all those reasons, I am glad to have been able to contribute to the debate. I signed the amendment tabled by my hon. Friend the Member for Eltham. I hope that the Government will think seriously about proceeding on their course. As the clause suggests, we ought to be careful to monitor the results of the abolition of the wages councils. For the reasons that I have expressed, their abolition will not do employment or the protection of the work force any good.

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Mr. Graham : If anything has made me angry about the Government, it is their commitment to abolish wages councils. I come from Strathclyde, where the Government have inflicted a poverty that we thought unimaginable in a modern, high-technology country such as Britain. The levels of poverty would make anyone cry.

Our people are unemployed in their thousands and our young people are desperate for work, yet the Government have come up with this solution. The Government are going to abolish the wages councils and they imagine that doing so will create jobs. To devise something like that to replace jobs is the product of a sick mind.

Every single hon. Member makes a minimum of £31,000 a year. Yet people in this place have the audacity to suggest that wages from £2.59 to £3.10 an hour are too high--it is mind-boggling to say the least. In Committee, I told the Minister that I had a constituent who was expected to bring his family up on £1.85 an hour. At that time, the Minister agreed that some wages were so low as to be evil. Surely £3.10 an hour is evil pay in a modern society.

After 14 years of the Government totally mismanaging the economy, with unemployment raging at 3 million and bankruptcies hitting our companies every single day, the Government come up with the grand policy of abolishing wages councils. They want to abolish the wages councils that have protected 2.5 million people. The wages councils may not have done as well as we would have liked, but the Government have ensured that they could not be more effective and they have reduced their power.

In 1986, the Government started to reduce some of the wages councils' controls. The Minister knows very well what I am talking about ; there has been a systematic and sinister move by the Government to reduce the wages councils' powers over the years. We have now reached the stage where they wish to abolish them. It is amazing that the Tory Government seem to want to ensure only that the rich get richer and the poor poorer. They never think about increasing the quality of life of the folk who live on social security benefit, but just talk about cuts, cuts, cuts.

I wonder why no Conservative Member has tonight been prepared to defend the abolition of wages councils? I was absolutely delighted to hear the two Conservative Members speak in support of wages councils. They are quite correct ; there is no way that the abolition of the wages councils and low wages will create new jobs. Anyone who tries to lower already low wages must be the most evil member of society. From 1906 to 1909 there was a sweated trades exhibition, but in those days they had the vision to create the wages councils. We should have learnt from that, but the Minister does not seem to have realised that there are many people who live on low wages and have to have their wages topped up. Those people are means-tested.

Surely in a civilised society people should be entitled to decent wages to pay for rent, clothes, heating and food--why not? Surely all men and women deserve that dignity. Surely it is the right of every man and woman in this country who works to receive decent pay to allow them to afford to buy the necessities of life. However, the Government do not care and have come up with a measure to abolish wages councils. They have not given the House one example of the way in which that measure will create jobs.

Earlier statements have suggested that value added tax might be imposed on food, which could mean families

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paying £8 or £9 a week extra on food. Let us consider the position. We abolish the wages councils and some unscrupulous employers get together and lower wages. What will happen to the poor families? They will have to pay VAT and pay extra for their food. We will be going back to the bad old days that my mother and father have told me about, when parents went to work hungry and worked hard to ensure that their kids would be fed.

This country has not been brought up to its present standard only to have it lowered so that impoverished mothers and fathers have to work in bad health and, ultimately, cannot work to feed their children. What have we come to? I wonder about the Government's logic.

7.45 pm

Earlier, I spoke about a young man who was getting £1 an hour and was expected to work seven days a week. When he asked for time off work to go to a wedding, his boss sacked him. That seems unbelievable, but it is true. I also told the Minister about the man who earned £1.85 an hour.

I shall tell the House another important, true story. A security guard worked with his dog and got about £1.70 an hour. After he had done 17 hours work with his dog, his partner failed to turn up, so the man worked another 17 hours at £1.70 an hour. A complaint was made about the dog and why it did not get a rest. An animal welfare group said that it would take the case to court if the dog was not given a rest. The man had to give his dog a rest, but the man himself got no rest. We have laws for dogs, but no decent laws for men and women in this country.

The Minister cannot honestly expect to create jobs out of the low paid. If the Government do not have the ability to ensure that this country re- establishes its manufacturing base and if they do not invest in young people, education and the quality of life of our people, they should give up. If the measure is the Government's only means of reducing unemployment- -now at 3 million--the Minister should give up.

The Government should give our people a break. Our people need the wages councils, which must be improved and developed. The Government should forget their sick suggestion and get people back to meaningful, fruitful work. They should give my constituent an opportunity to work for a decent wage. He deserves a decent, fair pay for a fair day's work. If the Government give him that, people like him will make Britain great once again.

Mr. Salmond : I was struck by the contributions of the two Conservative Members, who were both against the Minister and the Government's attitude to the wages councils. The hon. Member for Eltham (Mr. Bottomley) made a graceful speech, obviously based on his experience and study of the issue. However, I was particularly struck by the remark of the hon. Member for Broxtowe (Mr. Lester), who said that he thought that the measure was an example of the fact that think tanks now have an over- mighty influence on the Conservative party. He was right--think tanks have taken over the asylum and the personification of that process is sitting on the Treasury Bench. I studied economics at the same university as the Minister of State. I studied it for somewhat longer than he did and I have a theory that he has since been engaged in

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a process of trying to devalue not only my degree, but the reputation and standing of one of Scotland's greatest moral philosophers, Adam Smith.

The hon. Member for Strathkelvin and Bearsden (Mr. Galbraith) expressed surprise that someone like Adam Smith should have railed against the concept of low wages. He should have expressed no such surprise : Adam Smith was opposed to low wages for the same reason as he opposed poll taxes. Both were indications of primitive, under-developed economies. That is what the Minister now stands for. The economic effects of the abolition of wages councils will probably be marginal, because a fairly small number of workers is involved and relatively few of those workers are now earning only wages council rates. It could be argued that there will be an employment effect, but there will certainly be an effect on income and demand which will depress employment. Much more important than the macro- economic effect of abolition is the micro-economic effect on individual workers. Low wages unquestionably lead to the demoralisation of the work force and to a lack of efficiency. The Minister should not find it particularly surprising that someone reduced to poverty-line wages, struggling to keep body, soul and family together on an income that does not sustain that effort, will feel less than comfortable about his working environment. Such a person may not put everything into being as efficient as possible. I suspect that the Minister greatly underrates the effect on individual companies of driving wages and conditions further down ; I am sure that the leaders of such companies do. Many of the industries concerned already provide the worst wages and conditions in the economy.

More revealing in an economic sense, however, is what the Government's attitude to wages councils betrays about their overall approach to the economy. Today's papers quote the Secretary of State for Scotland as saying, in an aside to his speech at Edinburgh university, that people in Scotland must price themselves back into jobs. The Minister probably wrote that speech : he is nodding vigorously in agreement.

According to the Government, a low-wage economy provides the way to be competitive in the modern world. All the evidence suggests, however, that high-wage, high productivity, high-efficiency economies are the most successful in the international environment. That is suggested not just by current evidence, but by historical evidence from Scotland. A hundred years ago, Scotland was the most prosperous country in the world per head of population and also paid the highest industrial wages in the world. Those wages were the result of a highly skilled, highly educated work force, relative to other countries at that time.

Given that historical experience, and given all the current international experience suggesting that high-wage, high-skill economies provide the route to economic success, why should the Minister suddenly find an economic formula suggesting that low wages and low productivity present the magic solution to economic difficulties?

Mr. Michael Forsyth : I agree with the hon. Gentleman's analysis of the desirability of a high-wage, high-skill economy and with his analysis of the Scottish economy 100 years ago. Perhaps he will now tell us how Scotland managed to pay high wages before wages councils existed.

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Mr. Salmond : Is the Minister now arguing that wages councils are necessary to maintain high wages? If not, why on earth is he pursuing that line?

Wages councils were introduced in the early years of the century to try to introduce some decency to the wage-bargaining process. The argument about wages councils is not an economic one, as the Minister would know if he had followed my speech more carefully. It concerns morality and decency and whether Members of Parliament can legislate, not to protect the poor against the strong, but to reinforce the power of the strong over the weak. It is about whether, instead of further reducing the standards for some of the most powerless and vulnerable sections of society, we should accept responsibility for enacting legislation designed to reinforce whatever power we can give such people.

Yesterday, the Secretary of State for Scotland argued--with the Minister's agreement--that people should price themselves back into jobs. That typifies the Government's overall economic approach. Why cannot people educate themselves into jobs? Why can we not train them into jobs? Why can we not replicate the success of the economies that are currently most successful internationally and the success of Scotland 100 years ago?

Let me end my speech as I began it, with a reference to Adam Smith. It is no great surprise that a moral philosopher like Adam Smith did not consider it appropriate for wages to be driven down--no surprise, that is, to anyone but the Minister, who has abused Adam Smith's theory and writing throughout his political career. The essential question for the House tonight, however, is one of decency. Are we going to pass legislation that will drive down further the wages and conditions of a group of people who may not have much effect on the macro-economy in numerical terms, but whose lives, interests and families are entitled to far more respect than the Minister is prepared to give them?

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