National Minimum Wage

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Ms Candy Atherton: (Falmouth and Camborne): The Liberal Democrats in my area of Cornwall usually spend a great deal of time arguing that the country should be treated like much of the rest of the country. They argue that we should have extra help to solve our low pay and high unemployment problems--[Interruption.] This is clearly not of interest to Conservative Members; they are not interested in what is going on in Cornwall.

The Liberal Democrats argue that we need to consider ways of resolving our low pay and high unemployment problems. They say that we should revisit the Barnett formula to ensure that all English regions receive equal funding, like Scotland and Wales. On tourism, health, farming and fishing, they argue that Cornwall should get special treatment.

Mr. Green: Will the hon. Lady give way?

Ms Atherton: Could I just make a start on my speech?

I agree with the Liberal Democrats. It therefore baffles me why, on the vital issue of a national minimum wage, they want to perpetuate regional differences and poverty. If we allowed regional rates, Cornwall would become the low pay capital of Britain for all time. I see no advantage in that. As I explained on Second Reading, my area is losing jobs and faces high unemployment while still enduring low pay. If low pay created jobs, I would be knee deep in Japanese companies beating their way across the Tamar bridge, desperate to open new businesses in Cornwall. That is blatantly not the case. The hon. Member for Eastleigh (Mr. Chidgey) said that the American experience had been that a national wage had increased the amount of money entering and circulating in the local economy, which was good for the workers, the low paid and local businesses. Why should Cornwall not experience that benefit? Why should we have to have a regional rate?

I want to give an example of the levels of pay in the Cornish economy. Just last week, there was a card in the job centre in Penryn, which is in the heart of my constituency, advertising a job in Mylor, which is a small village and sailing port in my constituency--I believe that one or two Opposition Members know the area. The advert asked for a fully trained and professional sailing instructor. The pay was £40 a week for 40 hours a week. There was nothing about living in; the pay was simply £1 an hour for a fully professional and trained person. I find it bizarre that the Liberal Democrats should argue for poverty rates of pay to continue in regions such as mine. I look forward with relish to campaigning in Cornwall in future and to highlighting the fact that the Liberal Democrats and the Tories are arguing to keep Cornish workers in poverty.

Amendment No. 1 and similar amendments are wrecking amendments. This is a national minimum wage Bill, not a regional mimimum wage Bill. The sooner we are able to get on with introducing it, the better.

Mr. Russell Brown (Dumfries): Like my hon. Friend the Member for Falmouth and Camborne, I want to concentrate my remarks on the amendments that deal with regional variations.

I know that the hon. Members for Eastleigh and for Weston-super-Mare will concentrate on having different rates for different localities. My experience prior to coming to the House, when I served on a Liberal-Democrat-controlled council, clearly showed that people could have a say in what went on in their local communities, and I am enthusiastic about that. Pay rates should not, however, be determined at a local level. I therefore firmly believe that a national minimum wage should be just that--it should not be regional or area based.

Coming from a low pay area, I am disappointed that the Opposition have attempted over the past few days to keep the people whom I represent in the low pay bracket. There seems to be a weird perception among those who oppose a national minimum wage that low pay will allow us to compete in the open market and generate additional jobs.

My local enterprise company--which is also in the area of my hon. Friend the Member for Galloway and Upper Nithsdale (Mr. Morgan)--has made efforts to attract inward investment. It has stated on many occasions that wage rates are competitive, but what it is in fact trying to say is that low pay abounds. From what I have seen, it has failed to attract almost any of the inward investment that the area needs.

Most Members of the Committee--perhaps all of them--should be able to give examles of extremely low-paid jobs in their area. My hon. Friend the Member for Falmouth and Camborne has just done so. I also want to give some quick examples. A couple of weeks ago in my locality, there was an advert for a trainee outdoor activity instructor. The pay was £1.50 an hour. The advert added: ``Previous experience needed''. Another advert, for a nursery nurse, said:

    ``Must be experienced. Must hold recognised certification.''

The pay was £2.75 an hour.

I mention those examples because they involve responsible positions, not ones in which menial tasks are carried out. Having looked at those vacancies, I contacted other parts of the country. It was no surprise to find that the rates of pay offered in those adverts were considerably less than those offered in almost all other areas.

Last week, the hon. Member for Buckingham said that he paid his cleaner £7 an hour. I sincerely hope that he would pay the same rate irrespective of the location of the property being cleaned. Earlier today, the hon. Member for Runnymede and Weybridge spoke about his father working in retirement. Is the right hon. Gentleman's father the cleaner for the hon. Member for Buckingham?

Mr. Hammond: I thank the hon. Gentleman for his unintended elevation of my status to right hon. Member. When I referred to my father, I think that I said that he worked not because he needed the money--although I am sure that it comes in handy--but because he likes to keep fit and active and to retain a discipline and structure in his life in retirement. Does not the hon. Gentleman agree that that is an entirely worthy objective?

Mr. Brown: I fully agree that people have a right, wherever possible, to lead structured lives.

Different regional rates are not feasible. Such variations would make an already complex Bill even more complex. For example, it would be a nightmare for some companies to accommodate people who do the same job in different locations. No employer would want to operate a host of different pay rates. In fact, employers would probably claim that other regions enjoyed an unfair advantage.

Mr. Bercow: The hon. Gentleman says that no employer would want to pay different rates in different parts of the country for the same job. Does he deny that many employers at present do precisely that?

Mr. Brown: Of course they do, but many others would prefer not to do so. That is my point.

The increased regional concentration of low-paid jobs poses another problem. That concentration is more than a possibility; it is happening already in my area and in many others.

Mr. Green: Will the hon. Gentleman give way?

Mr. Brown: No, I have almost finished. I am sure that the hon. Gentleman will get another opportunity.

The establishment of a truly national minimum wage without regional variation offers great opportunities for people. My hon. Friend the Minister and my hon. Friends the Members for Stevenage and for Falmouth and Camborne all noted that the additional spending power will allow people, as individuals and families, to spend their money in the local economy. The figures show clearly that putting, say, £1 million into the local economy through low-paid families will in turn generate other jobs--many more than would be generated if the same money were given to people in a higher pay bracket.

I hope that the Committee will oppose any notion of regional variations in the national minimum wage.

Mr. Hammond: Clause 2, to which many of the amendments in this group relate, restricts the Secretary of State to prescribing a single hourly rate for the minimum wage. The bulk of the amendments would broaden the Secretary of State's power and allow him to consider other than a single hourly rate.

The single hourly rate is the Bill's greatest weakness. It is on that single practical problem that the Bill, when it is enacted, is likely to founder. However, it is also at the very heart of the ideology that underlies the Bill. It is a dogmatic point that there is to be a single national minimum wage. Several Labour Members have made that point. The Minister may have seen the article in The Times last Thursday, by Graham Sergeant, which referred to the minimum wage proposal. He stated that

    ``the policy is a relic, a sop to old Labour and trade unions. To new Labour, it is an embarrassment.''

6.30 pm

Mr. Boswell: Would my hon. Friend concede that, interestingly, the author of that article very firmly and eloquently made the point--I do not necessarily wish to advocate it--that it would be morally inept to set a rate for the national minimum wage in a way that would allow the wage to be taxed? In other words, he suggested that it should be kept in line with the tax threshold.

Mr. Hammond: My hon. Friend makes a very good point. I hope that the Committee will be able to return to it.

I wished to emphasise that the Labour party, when in Opposition, got itself on a hook over the definition of a single national minimum wage. As the debate has progressed, it has become clear that the idea of a single national minimum wage does not much appeal to common sense. Many of my hon. Friends, and the spokesman for the Liberal Democrat party, have already addressed specifically the potential for regional variations in the minimum wage. I shall try not to go over the same ground too much. Although we do not know how the rate will be determined--there will be a debate later about clause 2, which will cover the factors that will be taken into account in determining the minimum wage--it is clear that the Low Pay Commission's recommendations are likely to allow a degree of flexibility to the Secretary of State in defining how the minimum wage will be calculated. Different practices of remuneration in different industries and sectors of the economy clearly mean that there will be some practical difference between the treatment of different sectors of the economy. The Government has already breached the principle of universality in clauses 3 and 4. The Opposition welcome those clauses, because they add flexibility to the Bill.

My anxieties relate to the limit on the Secretary of State's flexibility in exercising her powers, because of the reference to a single hourly rate. I am especially anxious about small firms and very small firms, which may have just an employer and one or two employees. The Minister has prayed in aid more than once the operation of the minimum wage in the United States. In the United States, there is a small firms exemption, which is set far above the turnover to which any small retailer, newsagent, corner post office or local pub in this country could aspire.

I am, for example, anxious about the situation of a specific newsagent--it seems to have become de rigeur to quote individual constituency cases. The newsagent works in my constituency, with his wife, and employs one person. They work seven days a week, 364 days a year. He has not had a holiday in 16 years. Why, it may be asked, does he continue in the business? The answer is simple: he is tied to a lease that has another seven years to run and from which he is unable to escape. He works very long hours for a very low rate of pay. If he is required to increase the rate at which he pays his single employee to the national minimum wage, there is only one possible place that the money can come from--out of his own pocket, thus depressing his very low rate of remuneration still further.

 
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Prepared 20 January 1998