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Minimum Wage

8. Shona McIsaac (Cleethorpes): If he will make a statement on the impact of the minimum wage in Cleethorpes. [153638]

The Minister for Competitiveness (Mr. Alan Johnson): At least 120,000 workers in Yorkshire and Humberside have benefited as a result of the introduction of the national minimum wage in April 1999. The national minimum wage has also helped to close the gap between the highest and lowest earners, and to reduce the differential between men's and women's pay, both in Cleethorpes and throughout the United Kingdom. Between April 2000 and February 2001, Inland Revenue enforcement officers visited 348 employers in the Inland Revenue's northern region, which includes Cleethorpes, and identified about £240,000 in underpayments for workers in that region.

Shona McIsaac: I represent a part of the world in which low pay, such as £1 an hour piecework rates, was rife. The national minimum wage, and the increase in it that will be made later this year, has given a real boost to

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eliminating poverty pay in Grimsby and Cleethorpes. My hon. Friend mentioned cases of employers who do not meet their obligations. That is probably the tip of the iceberg in some parts of the country. What rights do workers have to report employers who may not be paying the national minimum wage, or who may alter their terms and conditions of employment to get round the requirement to pay the minimum wage?

Mr. Johnson: My hon. Friend raises an important point. The second report of the Low Pay Commission last year examined enforcement, and its authors were pleased, by and large, with the way it was operating. We have 14 teams of Inland Revenue officers around the country, dedicated to national minimum wage issues. Thanks to the Employment Relations Act 1999, they have access to returns for tax, national insurance and working families tax credit. The Low Pay Commission will re-examine the subject, and its conclusions will be included in volume 2 of its third report, which will be published in May.

If workers are scared of their employers, and scared to enforce their rights, they have only to ring the helpline. The rest will be done for them; they need have no further involvement. Enforcement officers will ensure that the employer complies--and so far, the enforcement officers have recovered £4 million in wages for people who had been denied their rights under the National Minimum Wage Act 1998.

Mr. Edward Leigh (Gainsborough): I was in a nursing home recently--[Interruption.] I was only visiting. The nursing home was in my constituency, but only a couple of miles from the constituency of the hon. Member for Cleethorpes (Shona McIsaac), and the people there said that the minimum wage had had a severe impact on their business. Although we all want people to receive decent wages, is the Minister conducting a survey of areas of traditionally high unemployment and low wages, such as Humberside and north Lincolnshire? The area contains his own constituency, and he knows it well. The issue is serious, and I am sure that the Minister would not want to increase unemployment in the area. What impact studies is he conducting, especially into the TUC's demands for a minimum wage as high as £4.50 or even £5 an hour?

Mr. Johnson: The Low Pay Commission is an example of social partnership in action, and may not be too popular among Conservative Members. It was established to carry out the type of analysis that the hon. Gentleman has described.

The sector mentioned by the hon. Member for Gainsborough (Mr. Leigh) has been a cause of concern in respect of the effect of the national minimum wage. What--for want of a better term--one could call social care employees have had a major input to the commission's deliberations. Indeed, the commission's second report found that 14 per cent. of establishments in the sector had experienced lower staff turnover since the introduction of the national minimum wage, that 18 per cent. reported higher staff motivation, and that 44 per cent. had increased investment in training and development.

The matter is important. This Government introduced the national minimum wage, and the level at which it is set obviously has to take cognisance of the points raised by the

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hon. Gentleman. That is why it is important that the process should be careful and steady, and that it be overseen by the Low Pay Commission. Anyone who reads the commission's reports will see that it conducts a thorough analysis of points such as the hon. Gentleman raised.


9. Mr. Huw Edwards (Monmouth): What support his Department plans to give to former employees of Corus affected by its decision to restructure steel production in the UK. [153639]

The Secretary of State for Trade and Industry (Mr. Stephen Byers): As my right hon. Friend the Prime Minister said in the House yesterday, even at this late stage the Government would urge Corus to reconsider its proposal. Should it proceed, we will work with the National Assembly for Wales, local agencies and other Government Departments to ensure that the best and most appropriate help is provided for the individuals and communities affected.

Mr. Edwards: I thank my right hon. Friend for the efforts made by his Department and the National Assembly for Wales to support the Corus steelworkers if they are made redundant. However, does not he agree that the prime responsibility remains with Corus to restructure its plans and save the jobs at Llanwern, Ebbw Vale and Bryngwyn? Does he share the astonishment felt by members of the Select Committee on Welsh Affairs when Sir Brian Moffat confessed, while giving evidence, that he did not know whether the Bryngwyn works was profitable or not but that he was closing it anyway?

Mr. Byers: Once we were able to reflect on the decision announced by Corus, it was clear that the company was adopting a short-term approach to the particular trading difficulties that it was experiencing. There is no getting away from the fact that it has been a difficult period for Corus. The House will understand that the company had to act to remedy the losses that it was incurring. The great concern for my hon. Friend, and many others, was that the company failed to adopt an approach guaranteeing a long-term future for steel.

I have no doubt that steel is an important industry for the United Kingdom, and will remain so. The Government still want to work constructively with Corus and the trade unions to find a better way forward. We could have a plan for steel that would overcome the difficulties that individuals and communities will face if Corus goes ahead with the programme that it has proposed.

Mr. James Clappison (Hertsmere): Will the introduction of the climate change levy next month result in a net cost to the steel industry?

Mr. Byers: What I can do is repeat the comments made by Sir Brian Moffat, the chairman and chief executive of Corus. His evidence to the Select Committee was very clear. He said that the introduction of the climate change levy made no difference whatever to the proposals being put forward by the company.

Mr. Andrew Miller (Ellesmere Port and Neston): There is nothing new about the conduct of the company. The

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company's barrister admitted in a recent employment appeal tribunal that the company gave false information to employees during the closure of the H.H. Robertson firm in my constituency. Given the role of his Department, and the possible involvement of the Serious Fraud Office, will my right hon. Friend look again at the conduct of British Steel--now Corus--during that closure?

Mr. Byers: I will agree to do that.

Minimum Wage

11. Mr. Chris Pond (Gravesham): What assessment he has made of the effects of raising the national minimum wage; and if he will make a statement. [153641]

The Secretary of State for Trade and Industry (Mr. Stephen Byers): The Low Pay Commission has made a thorough assessment of the likely impact of raising the minimum wage to £4.10 an hour. Its report shows just how successful the policy has been, with nearly 1.5 million workers taken out of poverty pay, and no adverse impact on levels of employment.

Mr. Pond: I thank my right hon. Friend for that answer. Will he confirm that he and the Low Pay Commission will be looking at the youth rate before this latest increase comes into effect? Does he agree that although some propose that all small firms should be exempted from having to pay the minimum wage, most firms consider that the minimum wage makes good business sense? Could that be one of the reasons why the Confederation of British Industry said this week that

and warned against the effect of another Tory Government, a view that I am sure is shared by most low-paid workers?

Mr. Byers: I think that the fact that we have been able to create economic stability which allows business to plan ahead with confidence is the motive behind the CBI's warm endorsement. On the national minimum wage, the Low Pay Commission will be recommending the youth rate later in May. We expect it to report on that issue then.

Many Conservative Members opposed the national minimum wage and continue to do so. The right hon. Member for Bexley and Chislehurst (Mr. Forth) is a good example--[Hon. Members: "Bromley".] The right hon. Gentleman changes his constituency so often that I have difficulty keeping track. He, however, is a true believer. Conservative Front Benchers do not believe in the national minimum wage, either. The public know that, because the Conservatives have continually opposed it. The Government are committed to it; we are proud to have introduced it. That is why it is going up to £4.10 in October and to £4.20 in October the following year.

Mr. Ian Bruce (South Dorset): Has the right hon. Gentleman been spending any of his March advertising budget on promoting the national minimum wage? Can he confirm that more than £8 million has been spent in March by his Department? Can he also confirm that the information in the advertisement on the four weeks' minimum holiday is incorrect, because the person featured

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in that advertisement is a partner in a firm, so the minimum wage and the four weeks' minimum holiday do not apply?

Mr. Byers: I am not sure that we are spending any money advertising the national minimum wage in March. If the hon. Gentleman is recommending that we should, I would be more than happy to consider it.

We are, of course, advertising the fact that as a result of measures introduced by this Government, everybody is now entitled to four weeks' paid holiday a year. That would be taken away by the Conservative party. We make no apology for advertising the fact that people in work now have decent minimum standards as a result of the measures that we have introduced.

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