Home Page

Column 125

House of Commons

Tuesday 18 October 1994

The House met at half-past Two o'clock


[ Madam Speaker-- in the Chair ]

Oral Answers to Questions


Minimum Wage

1. Mr. Luff: To ask the Secretary of State for Employment what assessment he has made of the effect of a minimum wage on levels of youth unemployment in other OECD countries.

The Parliamentary Under-Secretary of State for Employment (Mr. Phillip Oppenheim): Minimum wages destroy jobs, particularly among young people. Youth unemployment is far lower in the United Kingdom than in France or Spain, which both have statutory national minimum wages similar to that proposed by the Labour party.

Mr. Luff: I welcome my hon. Friend to the Dispatch Box. Is he aware that the right hon. Member for Kingston Upon Hull, East (Mr. Prescott) has observed that any fool knows that a minimum wage-- [Hon. Members:-- "Reading."] I am quoting.

Madam Speaker: Order. We are not making a good start today. It is not in order for the hon. Gentleman to quote. I am sure that he can do well without that.

Mr. Luff: I shall paraphrase, Madam Speaker. The right hon. Member for Kingston Upon Hull, East has observed that any fool knows that a minimum wage would cause a shake-out in jobs. Could my hon. Friend give an estimate of the size of that shake-out?

Mr. Oppenheim: There are a number of estimates, ranging up to 2 million jobs. I shall give my hon. Friend another interesting quote. John Grant, who was Minister with responsibility for the low-paid under the last Labour Government, recently wrote in The Guardian that it was a "pious hope" to expect better-paid workers not to want to increase differentials if a statutory minimum wage were imposed. That increase in differentials would have an enormous knock-on effect through the rest of the economy, severely damage our competitiveness and lead to a massive shake-out in jobs.

Mr. Rooker: Has the Minister seen the report in The Birmingham Post today disclosing research that shows that, last year, increases for company directors in the west midlands averaged £50,000 a year? How can he preach to the low-paid that there should not be a statutory minimum

Column 126

wage? Why are employers allowed to exploit the social security system, which has to spend £1 billion a year on family credit for low-paid workers?

Mr. Oppenheim: I may surprise the hon. Gentleman when I say that I, too, would like low pay rates to rise so that people are better paid. However, that must be done on a sustainable basis. The only sustainable way to improve the lot of the low-paid is to improve the productivity, efficiency and competitiveness of our economy and to enhance the skills and education of our work force. Those are the policies that we have been pursuing during the past 15 years, with the result that pay at all levels has risen substantially--in marked contrast to the position between 1974 and 1979, when productivity stagnated and so did pay. The rich may have become poorer under the last Labour Government, but the poor certainly did not become any richer.


2. Mr. John Marshall: To ask the Secretary of State for Employment what has been the change in the number of unemployed since December 1992.

The Secretary of State for Employment (Mr. Michael Portillo): Seasonally adjusted claimant unemployment has fallen by 405,700.

Mr. Marshall: I congratulate my right hon. Friend on his promotion and I thank him for his positive answer. Does he agree that those figures would not have been achieved if we had signed the social chapter and adopted a national minimum wage? Are not the Government seeking to reduce unemployment while the Opposition are seeking to become the natural party of unemployment?

Mr. Portillo: I thank my hon. Friend for his kind words. It is extraordinary that the Opposition still talk about their aspirations for full employment, when all their policies are a slap across the face for the unemployed. The social chapter would destroy jobs and so would the minimum wage, as my hon. Friend the Under-Secretary has just said. It is obvious that if there were a Labour Government they would be tough on jobs and tough on the causes of jobs.

Mr. McAllion: Does the Secretary of State accept that just as important as the change in the number of unemployed has been the change in the way that the Government count the number of unemployed, which has effectively kept more than 1 million unemployed people off the register? Does he further accept that his policy of pursuing a flexible, deregulated market has simply resulted in millions of British people being denied the right to a full-time job at a living wage and in the British work force being turned into a casual, part-time, low-skilled work force that is not the envy of the world that it was when we had Labour Governments?

Mr. Portillo: It is deeply to be regretted that the hon. Gentleman cannot welcome a fall in unemployment. It is clear, by any measure, that unemployment has fallen. For example, if we use the internationally accepted standard for the measurement of unemployment, the International Labour Organisation standard, it is clear that unemployment has fallen. Why does the hon. Gentleman not welcome that? Why must he always carp? Why must he always claim that the figures have been fiddled? He

Column 127

knows, from every constituency in Britain, that unemployment has been falling. Why does he protest against part-time jobs, which allow so many women to return to work with flexible hours that enable them to meet their children from school? Why does the hon. Gentleman set his face against the legitimate aspirations of those women?

Mr. Dunn: Given that unemployment has fallen by 400,000 and that Britain has the highest number of people in work of any major European Union country, are not the Opposition being small-minded and damaging Britain's standing in continuing to talk down our success?

Mr. Portillo: It is always deeply regrettable when the official Opposition party runs the nation down. That is not good for attracting investment to Britain. Fortunately, people can see that Britain is an attractive place in which to invest. They can see that the Government's policies are producing low inflation and growth. Fortunately, therefore, we had the news yesterday of 3,000 Samsung jobs in the north-east and the news today of the 1,450 new jobs at the Rover Group.

Mrs. Clwyd: As the Secretary of State sets out from planet Portillo on the Starship Enterprise to explore the final frontier and to go where no Tory has ever gone before, what explanation would he give to a Vulcan of his claim that the level of unemployment has fallen by 405,000 at the same time as 500,000 people, who were in work or looking for work, have disappeared from the figures? Has he just blasted them into the stratosphere?

Mr. Portillo: I find the hon. Lady's jokes rather laboured. It is time for the hon. Lady to return to earth, where she will find that unemployment has fallen by 405,000 and that many more people are staying on at school or are in education. If the hon. Lady is regretting that more people are staying on at school to improve their skills, she is even further away from earth than I thought that she was.

Sir Thomas Arnold: Is my right hon. Friend of the opinion that there is still plenty of spare capacity in the economy and that we can look forward to further falls in unemployment?

Mr. Portillo: I am sure that my hon. Friend will agree that the crucial factor is that we continue to sustain low inflation year after year. If we do that, we can have prosperity and new jobs year after year. As long as we pursue our policies we can look forward to a long period in which jobs are created and unemployment will fall. The only thing that could put an end to that would be if, by chance, the Opposition were elected to power.

Restart Interviews

3. Mr. Dowd: To ask the Secretary of State for Employment how many people have been awaiting restart interviews throughout Greater London on 1 April in each of the past two years.

The Minister of State, Department of Employment (Miss Ann Widdecombe): Restart interviews are available within four weeks of their becoming due having been notified immediately, and therefore no waiting lists are necessary.

Mr. Dowd: In that case, why did the chief executive of the Employment Service provide me with those

Column 128

figures? They were available only for Greater London. Can the hon. Lady explain why, given that they refer to individual claimants, they are not available for each office? Will she confirm that the figure of fewer than one in 20 people going on to find work as a result of restart interviews has not changed since the scheme's inception?

Miss Widdecombe: The hon. Gentleman is wrong on both counts. The figures that he has received are almost certainly of those waiting to embark on restart courses. Secondly, 32.2 per cent. nationally and 28.1 per cent. of those in Greater London go on either to a job or to an Employment Service programme as a result of their restart interviews. Will he welcome that?

Mr. Evennett: Will my hon. Friend join me in congratulating the Employment Service on its good work in Greater London? Many young and older people have been found jobs by that excellent service. In particular, will my hon. Friend congratulate the Employment Service office in Erith, which does a first-class job for local people?

Miss Widdecombe: I have great pleasure in echoing my hon. Friend's thanks. Of course, restart interviews are by no means the only initiative available to the unemployed. The long-term unemployed also benefit from training for work, job interview guarantee, job plan workshops, job clubs, restart courses, community action, learning for work, 1-2-1, pilots, job finders grants and work trials.

Unemployment, Dorset

4. Mr. Ian Bruce: To ask the Secretary of State for Employment what has been the change in unemployment in Dorset in each month since January.

The Parliamentary Under-Secretary of State for Employment (Mr. James Paice): Unadjusted claimant unemployment in Dorset is down by5,474 since January of this year, and by 8,291 since January 1993, which is a fall of 25 per cent. I shall, with permission, Madam Speaker, arrange for the full statistical table to be printed in the Official Report .

Mr. Bruce: I welcome my hon. Friend to the Dispatch Box and thank him for recounting the excellent news that the Government's regeneration agency, which is working on replacing defence jobs in my constituency, is doing such a good job. Will he take into account the fact that, over the next five years, we shall lose about 4,500 jobs from our economy? Will my hon. Friend look carefully at what more his Department can do either to persuade the Ministry of Defence not to move everybody away from Portland and Weymouth or to provide maximum help to regenerate jobs?

Mr. Paice: For a long while, my hon. Friend has admirably looked after the interests of his constituents in the context of the defence reductions. He will know that Dorset training and enterprise council has already received substantial extra funds through the Konver initiative. He should take courage from the fact that the Dorset jobcentre now has 1,500 vacancies, which is 30 per cent. more than it had a year ago.

Mr. Chidgey: Is the Minister aware that long-term unemployment in Dorset has been rising as a percentage

Column 129

since April 1992? Will he address the concerns of the long-term unemployed in Dorset and elsewhere as a matter of priority?

Mr. Paice: The Government have a range of programmes, ranging from training programmes and counselling schemes, to encourage and enable the long-term unemployed to get back to work. The Government do not take very much notice of a party whose only interest seems to be to create jobs in selling cannabis and condoms to kids.

Mr. Butterfill: Does my hon. Friend accept that the very welcome reductions in Dorset are due not merely to the Government's rejection of the social contract and the minimum wage, which would have damaged our hotel industry, but to the splendid efforts of industry in Bournemouth and in Poole in winning the "Britain in Bloom" competition yet again in Bournemouth and the "Best Beach in Britain" in Poole, much of which I hope was enjoyed by my hon. Friend and many others last week?

Mr. Paice: I and my right hon. and hon. Friends greatly enjoyed seeing Bournemouth in bloom. We had a thoroughly enjoyable week which led us to be even more convinced that the Government's policies to get the economy going and get unemployment down are the right policies for this country.

Following is the information:

Unadjusted claimant unemployment in Dorset                                          

1994                 |Number of unemployed|Change on previous                       



January              |29,807              |1,393                                    

February             |29,471              |-366                                     

March                |28,292              |-1,179                                   

April                |27,092              |-1,200                                   

May                  |25,948              |-1,144                                   

June                 |24,711              |-1,237                                   

July                 |24,753              |42                                       

August               |24,797              |44                                       

September            |24,333              |-464                                     

Note: As these figures are on the unadjusted basis they will be subject to seasonal 


Youth Training

5. Mr. Battle: To ask the Secretary of State for Employment how many 16-year-old school leavers from Leeds, West were placed on training schemes in September.

Mr. Paice: Some 2,900 young people were on youth training in Leeds in July, which is the latest date for which figures are available.

Mr. Battle: Is the Minister aware that 169 youngsters still seek a training place today, 79 of whom have no income and are not on benefit, and 19 of whom live in Bramley and Armley in my constituency? Does the Minister know that if a youngster misses a single interview with the careers service he or she is crossed off the list for a guaranteed scheme? What will happen to such youngsters? Are the Government prepared for some youngsters to become "disappeared persons" who have been consigned out of the training and labour market?

Mr. Paice: The Government do not want any young people to be deprived of the opportunity to go on a proper

Column 130

training programme if they do not have a job or have not gone into full-time education. In fact, at the end of August only three young people in the whole of Leeds were awaiting places on YT courses.

Mr. Tony Lloyd: Is the Minister aware that, not just in Leeds but throughout the country, the youth guarantee has proved to be a shambles and a disgrace? Is he aware that, according to the Government's own figures in the labour force survey, 122,000 16 and 17-year-olds were out of work in the spring of this year? Why should any hon. Member, or any 16-year-old school leaver, believe that the guarantee will be honoured this winter? Will not 16-year-olds, too, be out of work and without benefits?

Mr. Paice: The guarantee is always honoured, and we have made sure that training and enterprise councils have enough resources to honour it. At the end of August, only a third of the number of young people who were awaiting places at the same time last year were awaiting them. As for the labour force survey statistics that the hon. Gentleman has given, he should be aware that that figure also includes a number of other groups that we do not categorise as unemployed--for instance, those who are undertaking full- time education courses but who may be looking for jobs at the same time.

Wages Councils

6. Mr. Gordon Prentice: To ask the Secretary of State for Employment what assessment he has made of the effect of the abolition of the wages councils on the pay of those in occupations which were previously covered.

Mr. Oppenheim: The 1994 new earnings survey shows that, in the main, average earnings of workers in sectors that were covered by wages councils rose between April 1993 and April 1994, although it is still too early to make a full assessment.

Mr. Prentice: Is the Minister proud of the fact that Britain is the only country in the European Union without legal pay protection for the very poorest? What advice would he give people in north-east Lancashire who see sweatshop pay rates being replaced by slave-labour rates, such as the £80 a week that is being offered by Mr. Joe McBride of Northern Textiles? Should people be grateful for those grotesque wage rates?

Mr. Oppenheim: First, it is not correct to say that all European Union countries have minimum wages or wages councils. Secondly, no one will condone poor employers or bad employment practices. If Opposition Members think that there is some easy way of securing higher wages just by political diktat--without improving the competitiveness, productivity and efficiency of the economy, and without enhancing the skills and educational base of the work force--they are perpetrating an unfair myth on the British people.

Dame Jill Knight: Is my memory playing me false, or is it true that, during the 1970s, the Labour party, when in government, abolished quite a number of wages

Column 131

councils? If it is so wrong for the Conservative Government to have done that, why did the Labour party do it then?

Mr. Oppenheim: My hon. Friend is perfectly correct. Between 1974 and 1978, the Labour Government abolished no fewer than 11 wages councils, covering 600,000 workers.

Ms Short rose --

Hon. Members: Answer.

Ms Short: I was just attempting to speak, if hon. Members will allow me.

We know that the Minister is new. He is probably not aware that those wages councils were very tiny and behind the times. Let me point out to him that evidence of average wages in a wages council sector tells us nothing about low pay in that sector. I know that he is new: he may not be aware of the research undertaken by the low pay network campaign against poverty, which was published in August 1994, which examined nearly 6,000 jobs in what were previously wages council sectors and found that one third of all vacancies paid less than the wages council rate--

Madam Speaker: Order. I must hear a question from the hon. Lady.

Ms Short: Thank you, Madam Speaker. I asked whether the Minister was aware of research, of which he should be aware. In retailing, pay is 42 per cent. less than the wages council rate. Does the Minister realise that his strategy of encouraging low pay in Britain damages women workers above all? Does he not yet understand, after 15 years of economic failure, that the encouragement of low pay leads to poor training and poor investment, and that a national minimum wage would benefit low-paid families-- [Hon. Members:-- "Question."] It is a question. Does the Minister understand that a national minimum wage would benefit low-income families, and encourage employers to train and invest instead of competing by cutting wages?

Mr. Oppenheim: I may be new, but I have seen the low pay network campaign report. I do not know how thoroughly the hon. Lady has read the report. If she has read it thoroughly, she will know that the report is based solely on surveys of unfilled vacancies in jobcentres, which tend to be at lower levels than pay for people in work. Not a single person in work was surveyed for that particular report, so on a statistical basis the report is flawed.

As for the abolition of wages councils under the last Labour Government, I do not know whether the hon. Lady thinks that 250,000 road haulage workers represent an insignificant industry. The only way in which we shall increase pay levels is by increasing the productivity of the economy. Since 1979, productivity has increased significantly, as has pay at all levels. That is in stark contrast to the late 1970s, when both productivity and pay in the British economy stagnated. We shall be able to help the low-paid only when we have a more efficient, competitive economy.

Madam Speaker: Order. All hon. Members today--both Back Benchers and Front Benchers--have been far

Column 132

too long with their questions and answers. I want brisk questions and answers in future. I call Sir Donald Thompson. I can rely on you, I am sure.

Sir Donald Thompson: Can my hon. Friend tell me how many jobs wages councils have created?

Mr. Oppenheim: None, sir.


7. Mr. Canavan: To ask the Secretary of State for Employment what is the total number of unemployed people in the United Kingdom.

Mr. Portillo: In September, seasonally adjusted claimant unemployment stood at 2,566,000; down by 405,700 since December 1992.

Mr. Canavan: Does the Secretary of State realise that such an intolerable level of unemployment would be even worse if the Government adopted his crazy idea of scrapping regional development assistance? Given the thousands of jobs created through regional development assistance to companies such as Samsung and Nissan in the north-east and NEC and Digital Equipment in Scotland, will the Secretary of State publicly recant and abandon any idea of scrapping regional development assistance? Otherwise, he should change his job description to Secretary of State for Unemployment.

Mr. Portillo: I know that the hon. Gentleman has been busy composing early-day motions to undermine his Front Bench, but even so that is no excuse for what he has just said. I have never opposed regional selective assistance. [Hon. Members:-- "Yes."] No I have not. In my job as Chief Secretary I did what all Chief Secretaries must do--I asked for it to be justified. I rejoice enormously at the 3,000 jobs that have come, through Samsung, to the north-east, but I know perfectly well that those jobs would not have come if Britain had signed up to the social chapter and we had had a minimum wage.

Sir Michael Neubert: Is not it clear that a major factor in our consistently improving employment prospects is our present excellent industrial relations within a framework of Conservative trade union law? Is not it equally clear that if we went back to the bad old days, as proposed by the Bill to be presented later this afternoon by the right hon. Member for Chesterfield (Mr. Benn), that picture would quickly change for the worse?

Mr. Portillo: My hon. Friend is right. During the 1970s we lost 12.9 million working days a year on average. Last year we lost only one 25th of that--about 600,000 working days. Britain now has a marvellous reputation for industrial relations. I noticed that, at the Trades Union Congress conference, it was proposed that all the Government's industrial relations reforms should be repealed.

Minimum Wage

8. Mr. Spellar: To ask the Secretary of State for Employment what discussions he has had since 21 July with the United States Administration regarding the effect of a national minimum wage.

Mr. Oppenheim: None.

Mr. Spellar: Can one presume that that is because Ministers might not like the answers that they would

Column 133

receive? Ministers have been pleased to say how many jobs have been created in the United States--that is, of course, in the context of a national minimum wage.

Mr. Oppenheim: I know of the hon. Gentleman's interest in a national minimum wage in the United States. However, I do not know whether he knows that the level of the federal national minimum wage in the United States is £2.70, compared to the Labour party's proposals for Britain of £4. The gap is even greater when one bears in mind that pay levels in the United States are far higher than those in the United Kingdom. Successive American Administrations have allowed minimum pay to wither away by not raising it in line with inflation. The last example of that was the Clinton Administration, who came to power committed to increasing the minimum wage, but two years later have done nothing about it.

Mr. Barron: The Minister said that the minimum wage would destroy jobs in this country. Can he comment on the survey by the low pay network campaign, which showed that since September 1993--after the abolition of the wages councils--27,000 jobs have been lost in the hotel and catering sector? I thought that abolition was supposed to make the number of such jobs grow.

Mr. Oppenheim: The hon. Gentleman has missed the point. The survey was done at a time when the hotel and catering industry--which is a seasonal industry--sheds jobs. If the hon. Gentleman is serious about the minimum wage, it is incumbent on him to tell us how he would handle the question of whether there would be a lower rate for youth workers, as happens in the Netherlands. How would he handle the effect on public sector pay, bearing in mind the fact that Labour is now committed not to increase public sector spending? Above all, how would he handle the knock-on effect of differentials, which every trade union leader has told us that they would expect to rise?

Part-time Workers

9. Mr. Donohoe: To ask the Secretary of State for Employment if the Government will introduce legislation to protect part-time workers.

Miss Widdecombe: Part-time workers already have a wide range of employment protection rights.

Mr. Donohoe: Part-time employees do not have the same employment rights as full-time employees, especially when it comes to industrial tribunals. Will the Minister give a cast-iron assurance that she will extend the same rights to part-time employees?

Miss Widdecombe: Part-time employees already have important rights, including those relating to race and sex discrimination, health and safety, trade union membership and activities, unlawful deductions from wages and time off for ante-natal care. That is a very comprehensive package.

Mr. Nigel Evans: Is my hon. Friend aware that my constituency has the lowest level of unemployment in the United Kingdom? Many of those people are part-time workers. The best employment protection that they can have is for their jobs to be protected. Will my hon. Friend give the House a commitment that her Department will continue to scrutinise European Community directives

Column 134

and ensure that it uses its veto, where necessary, to protect the jobs of part-time and full-time workers in this country?

Miss Widdecombe: I am happy to guarantee to my hon. Friend that we will do all that we can to protect part-time jobs and part-time job opportunities when they are threatened by kind-hearted but deeply economically misguided proposals for the further imposition of legislation.

Mr. Janner: Does the Minister not know that, as a result of recent decisions in European courts, part-timers in Britain are already protected against unfair dismissal and redundancy? Will the Government now make that clear, if not by answering my letters to that effect, by introducing legislation in the next Session, so that we comply with European law and get rid of that discrimination?

Miss Widdecombe: The Government always seek to comply with any directive to which we have signed up. That will continue to be our position. We will also continue to answer all the letters that the hon. and learned Member sends to our Department. Not one letter has gone unanswered. Perhaps he would like assistance in understanding the answers.

Labour Market

10. Mr. Matthew Banks: To ask the Secretary of State for Employment what assessment he has made of the strength of the link between falling unemployment and the structure of the United Kingdom labour market.

Mr. Portillo: During the 1980s, we legislated to make it easier for businesses to give people jobs and to restrict trade union privileges. In the 1990s, unemployment is falling at an early stage of the recovery. I believe that those two facts are linked.

Mr. Banks: Is my right hon. Friend aware of Opposition Members' support for the European Commission's proposal to allow all new fathers three months' paternity leave? Does my right hon. Friend agree that that proposal and many others like it from Brussels need to be resisted before further unnecessary and costly burdens are placed on competitive British business?

Mr. Portillo: My hon. Friend is right. I simply could not support the proposal. Of course many employers make arrangements with their employees and those can involve paternity leave, but the proposal made to us in Brussels last month was that all businesses should be obliged by law to give any male employee three months' paternity leave. That could have disastrous consequences for small businesses and I was not prepared to sign up to it.

Mrs. Clwyd: The Secretary of State continually says no, no, no to Europe. Instead of telling Brussels where to stop, why does not he stop telling us to accept low wages, stop telling us to work excessive hours and stop telling us to use kids for illegal work, and why does not he stop turning us into the sweatshop of Europe?

Mr. Portillo: The hon. Lady's rehearsals are certainly paying off, and practising as hard as she does is worth while.

Column 135

I want to make sure that we do not destroy jobs in Britain and I am not prepared to have costs imposed upon Britain's employers which would make them less likely to take people on. I believe that people are generally poorer when they are not in work than when they are in work.

Trade Union Reforms

11. Mr. Peter Ainsworth: To ask the Secretary of State for Employment what representations he has received calling for abolition of the employment and trade union reforms introduced between 1980 and 1993.

Mr. Oppenheim: There have been no individual representations to abolish our reforms which have given trade unionists the right to secret ballots, the right to strike ballots, the right to refuse to strike and the freedom to leave their trade union without losing their jobs. All those reforms were opposed by Labour and by the trade unions, but last year the reforms contributed to the best strike record since 1891.

Mr. Ainsworth: Does my hon. Friend agree that the Government's trade union reforms are now so popular that even those who fought them tooth and nail recognise the valuable contribution that they have made to industrial relations? Does he further agree that there must be some lingering doubt in our minds as to the extent of the conversion of the Labour party so long as more than half its funding comes from the trade union movement?

Mr. Oppenheim: There certainly seem to be some divisions among Opposition Members as to whether they support our trade union reforms. The reforms have made a massive contribution to the improvements in the efficiency and competitiveness of the British economy. Recent figures have shown that productivity rose by 5 per cent. and exports by 10 per cent. last year, and only today Rover has announced that it is creating many new jobs because of increased exports. Our trade union reforms have contributed significantly to that.

Mr. Denham: Is the Minister aware that four out of 10 workers in the south-east of England are now in the so-called flexible economy of part- time work, zero-hours contracts, short-term contracts and enforced self- employment? Does the Minister recognise that without re-establishing basic employment protection, the future for those and many other workers is one of greater insecurity and uncertainty?

Mr. Oppenheim: The recent labour force survey showed that only 13 per cent. of part-time workers actually wanted full-time jobs. The existence of a large amount of part-time work has allowed Britain to have the highest participation rate of the work force of any major European country. Part-time work is important for the many people who actually want it.

Next Section

  Home Page