Draft National Minimum Wage Regulations 1999 (Amendment) Regulations 2002

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Lady Hermon (North Down): I am concerned that the Low Pay Commission has not paid specific attention to Northern Ireland. Will the Minister confirm that at least one of the seven pilot schemes that he announced focuses on Northern Ireland? In future, will the Low Pay Commission consult the Northern Ireland Assembly?

Alan Johnson: I am sure that that is the case. The recently departing and excellent chairman of the Low Pay Commission, Professor Sir George Bain, is a lecturer at Queen's university, Belfast, and I am going there to see him in a couple of weeks. I would be amazed if the Northern Ireland perspective did not feature in the commission's considerations, but I shall raise the issue as a result of the debate.

The second point that the hon. Member for Runnymede and Weybridge raised was about the black economy. As my hon. Friend the Member for Ipswich suggested, the hon. Gentleman gave no statistics or analysis and had no research capability, but his point was genuine. I said that our seven pilot exercises would specifically consider aspects of the black economy, such as textiles in the east midlands. Companies and the unions are working together to try to help people who are so inhibited that they find it difficult even to ring our helpline. We have specific measures in place to work on that.

Of the 320,000 people who the Office for National Statistics calculated did not receive the national minimum wage, a large proportion would be apprentices, who are properly below the wage in legislative terms. An element will still buck the system and ignore the legislation. Such people will mainly be in the black economy, but we shall continue to work on that.

The hon. Member for Runnymede and Weybridge asked about 21-year-olds. I disagree with my hon. Friend the Member for Falkirk, East on the subject, and feel no embarrassment or burden on the issue whatever. Our most difficult job has been to introduce a national minimum wage years after most other competitor G7 countries did so. After all, in the 1970s when we were in our flares and tank tops, our trade union movement opposed a national minimum wage. The measure was difficult to introduce because it would have cost jobs if we had got the level wrong. We have been ultra-cautious.

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We have been keen for employers to work with us on the national minimum wage so that it takes root, and we were keen and have been pleased to reach political consensus on it. I am happy that we are working in such a way. The wage may not yet have reached the level at which it should be. The Low Pay Commission is now a permanent body that reports every year under its splendid new chairman, Adair Turner. I feel no concern about our approach to 21-year-olds. The legislation was clear that the commission could make recommendations, but that the Government were responsible. We are not passing the buck to it, on this issue in particular.

We did not accept one of the commission's recommendations--that on 21-year-olds--for two reasons. First, there was a big spike in the number of 18-year-olds coming through to the 21-year-old rate.

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We wanted to see that spike in the birth rate pass through, because we were concerned about creating unemployment. We wanted to ensure a national minimum wage and jobs in which people could enjoy it. Secondly, we found that there was a step up on the graph in unemployment between the ages of 21 and 22.

Despite the commission's good arguments, we found the risk too big. The one thing that is certain about 21-year-olds is that they will have to wait no longer than a year—

It being one and a half hours after the commencement of the proceedings, The Chairman put the Question necessary to dispose of the proceedings, pursuant to Standing Order No. 118(5).


    That the Committee has considered the draft National Minimum Wage Regulations 1999 (Amendment) Regulations 2002.

        Committee rose at Twelve o'clock.

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The following Members attended the Committee:
O'Hara, Mr. Edward (Chairman)
Cable, Dr.
Connarty, Mr.
Grogan, Mr.
Hammond, Mr.
Hendry, Mr.
Hermon, Lady
Johnson, Alan

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Jones, Mr. Kevan
Laxton, Mr.
Mole, Mr.
Murrison, Dr.
Osborne, Mr. George
Pearson, Mr.
Smith, Geraldine
Stewart, Ian
Turner, Dr. Desmond
The following also attended, pursuant to Standing Order No. 118(2):
Clappison, Mr. James (Hertsmere)
Forth, Mr. Eric (Bromley and Chislehurst)
Wiggin, Mr. Bill (Leominster)

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Prepared 9 July 2002