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Lord Harris of High Cross: My Lords, it's Mandelson!
Lord Razzall: My Lords, I apologise to the House. Many of the arguments on all those issues need to be continued over the course of the next few years. Therefore, we would like to see statutory effect given to the permanent status of that statutory body. In the other place the Government indicated some movement in that area. We propose to press the Minister somewhat further on that issue.
The noble Baroness raised the critical issue behind this Bill. In another place many nights were taken by the Opposition in attempting to slow down the progress of the Bill. In the course of the debate I believe that Madam Speaker had to remonstrate with the government Minister for suggesting that a filibuster was taking place. Whether that was the case of not, I do not know: I was not there. I do know, however, that many nights and mornings were taken up in Committee and at other stages of the Bill. I urge the Opposition to accept the fact that we are going to have this legislation and that we should use the opportunity here to try to improve it in the way I have suggested and not indulge in the kind of behaviour that went on in another place. I believe that this is good legislation which is right for the country. We can improve it if we all work together here.
8.36 p.m.
Lord Harris of High Cross: My Lords, I am not sure whether I should apologise for taking part in this debate as a former practitioner of the dismal science of economics. Next to the offer of a free drink, the mere mention of a minimum wage is best calculated to get most economists to their feet with their mouths open. It is a subject that disproves the old quip that if you ask half-a-dozen economists a question, you get six different answers--or seven if Lord Keynes was among them. In contrast, it requires no homework, no new research, no statistical models, no consulting--not even a fee--for most independent economists to agree nem. con. that a minimum wage is likely to be damaging and could be disastrous.
Of all the anti-market wheezes that I have come across, the idea of enforcing by statute a single, national minimum wage seems to me the most damaging in prospect. That is for several reasons. First, it seems superficially a painless way, as we have heard, to prevent the "exploitation" of the weakest members of industrial society. Secondly, it can therefore be wrapped up in the rhetoric of fairness and so harness the moral passion of laymen, as the noble Lord, Lord Clinton-Davis, attempted. Thirdly, for politicians, less concerned with morality and guided by the vote motive, it serves wonderfully to promote short-term party popularity. At the outset it is an absolute winner. It is unstoppable. Apart from the Conservative Party, its only opponents are stony-hearted economists who, we all know, are lackeys of high capitalism.
Even if I could forthwith proceed to demonstrate the disastrous effects of a minimum wage on production costs and employment, I fear that the moral and political bandwagon could not now be halted. But, alas, I admit that I cannot demonstrate any such thing. I cannot prove the case against this massive, mammoth, monstrous Bill for the simple reason that I do not know what I am talking about. None of us knows what we are talking about. The Minister does not know what he is talking about. Not even the normally omniscient professor the noble Lord, Lord Peston, if he were here, would know what he was talking about. That is because we do not yet know the level at which the minimum wage will be set. I shall return to that challenge in a moment.
Any of us can conceive of a minimum wage low enough to do no harm, but then it would also do little good. We also understand that if the minimum is set above what economists call the "market clearing wage", it will certainly hurt those it was meant to benefit. Thanks partly to the Institute of Economic Affairs, with which I have had some forty years' association, there is today a more general acceptance of what the late Lord Robbins used to call the "invincible platitudes" of liberal market economics. It is a central precept of textbook analysis that a rise in price will reduce demand. Of course, in the lecture room, that missionary truth is hedged around with cautious qualification. Thus, the rise in price will only "tend" to reduce demand and therefore to create unemployment, and it will do so only if "all other things remain equal". If I had the time I could tell the House of circumstances in which a minimum wage could possibly improve employment, but that is a textbook or examination exception such as one sets to catch out undergraduates.
The trouble is that there is not just one labour market. There are distinct labour markets in different regions, different industries and different skills. Although a single uniform minimum wage will have no ill effects for skilled workers in flourishing firms in the South East, it could do much damage at a number of other margins. It will bear most harshly on the least effective worker, in the least productive firms and in the less favoured regions.
A consistent lesson I recall from almost all of the empirical studies in the United States is that when the minimum was increased--usually around election time--the main victims of the resulting unemployment were the most vulnerable workers. They were typified by being unskilled, inexperienced, young, black and invariably women. It may not sound quite nice, but it follows that the one advantage which the least attractive, least employable people have in a competitive market is the freedom to offer their relatively unwanted services at a lower wage. At least they get their foot on the ladder. I wish that Milton Friedman were present to give his performance of thanking the almighty for the sweatshops on the east coast of America in the last century which enabled his immigrant parents to get a toe-hold on that great continent.
If we turn to the Bill, we find 50 pages of, for me, impenetrable legal mumbo-jumbo, with seven clauses giving wide powers of further regulation. There is no fear of unemployment, at least for lawyers. The prospect opens up of a new era of litigation by disaffected employees that will dwarf unfair dismissal cases. It should prove what I believe is called "a nice little earner" in retirement for the noble Lord, Lord Wedderburn, and the noble Lord, Lord McCarthy, who do not appear at the moment to be present among us.
The concept of a minimum wage sounds simple enough, but we must bear in mind that the rewards of a job include what economists call the "net advantages of employment". Let us consider the impossibility of evaluating payment by commission, discounts, and benefits in kind, including convenience, regularity and flexibility of work. Mention has been made of McDonald's. It may once have paid lowish wages but,
in my view, it has done more than many government schemes to initiate and train generations of young people for regular work and so improve their future employability. For my money, it merits the accolade "McJobs" and it may now easily be in a position to cope with the minimum wage, but the same minimum will handicap smaller businesses in labour-intensive industries and prevent them growing into the McDonald's of the future.I now come to the real heart of all this--I wish that there were time to go into it all. Let us turn to the Explanatory and Financial Memorandum and to the section headed "Financial effects of the Bill". We read:
- "the net effect is likely to be relatively small",
but we should note the preceding proviso, which states:
- "assuming the National Minimum Wage is set at a sensible level, with employment and the productive potential of the economy unchanged".
I need hardly say that if it is not set at a sensible level--that is, at a low level--the knock-on effects in the name of preserving differentials--whatever the noble Lord, Lord Clinton-Davis said--and the resulting unemployment will cost the Treasury many billions of pounds in wages and benefits.
Will the Minister take a moment at the end of the debate to confide in us his present judgement of a "sensible" minimum wage? He must have given this a great deal of thought. Indeed, he is paid to do just that. It would be helpful if he could tell us so that at later stages we can have some idea of whether it is to be £3.50 or £4-something. It would be useful to have that knowledge.
Noble Lords will be pleased to hear that I shall trouble them no further by participating at later stages--because this is a totally misconceived Bill which, by massive amendment, could be made only slightly less bad. The whole gamble was, of course, intended as a flower arrangement, a bouquet, to appease Old Labour. I fear that it may prove to be a wreath of nettles.
8.46 p.m.
Baroness Turner of Camden: My Lords, perhaps I may say first how much I welcome this Bill. We have had to wait a long time for it. That is no fault of this Government who have kept their pledge to introduce legislation to provide for minimum wages as soon as possible. There is no doubt that the move is highly popular--and that it is badly needed. For too long, many people in this country have had to work too hard for too little. As my noble friend the Minister explained, this Bill is part of the Government's overall strategy, which I applaud, to reform the tax and benefit system to aid poorer people, particularly those with children, and to assist with job creation, as the Chancellor did last week, by giving assistance to smaller firms in particular.
Why is the Bill so necessary in today's Britain? Today, we have over 1 million employees earning less than £2.50 an hour, of whom about 60 per cent. are women. According to the OECD, we have a higher proportion of people in low paid work than the majority
of western European countries. There is apparently, according to the TUC, little variation of low pay by region and for that reason I understand that the TUC does not support the case for a regionally varied minimum wage, despite what the noble Lord, Lord Razzall, said.I have here a dossier, compiled by the TUC and the Low Pay Unit, of simply appalling cases of what really amounts to sweated labour. Perhaps the noble Baroness, Lady Miller, will take note because she apparently does not think that we have sweated labour in this country. The examples include a hairdresser paid £1.95 per hour with no extra pay for overtime, which she is often required to work; a manager at a sports centre who is paid £200 for a six-day working week of 16 hours a day, which amounts to £2.08 an hour; an assistant MoT tester offered £1.50 an hour to work from 9 a.m. to 6 p.m. Monday to Friday; a care assistant paid £1.78 an hour for a 48-hour week; a woman working in a tailoring factory paid £2 an hour for a 35-hour week; a clothing factory worker earning £2.75 an hour; and a construction worker employed by an agency working for less than £3 per hour. These are examples of sweated labour by any standard. They are some of the cases culled from a large dossier covering various areas of the country. The situation in Scotland is no better. There are cases of employees in shops and restaurants working for less than £3 per hour. In particular care workers are badly paid at about £2.25 to £3 an hour. The security industry is particularly exploitative. Some cases have been recorded of men who earn as little as £1.50 an hour.
Some of the worst cases occur in industries where there were once wages councils. It will be recalled--as mentioned by my noble friend the Minister--that those councils were weakened and finally abolished by the previous government. When in opposition we put up spirited resistance to the move but unfortunately failed to stop the Conservative government from going ahead with it. As soon as wages councils disappeared a number of employers seized the opportunity to pay as little as they could get away with. In conditions of high unemployment that led to the grossest exploitation of very vulnerable people. It is noticeable that in low-paying industries, often the workforce is mainly female or from ethnic minorities. Far from there being a jobs explosion in the former wages councils sectors as the Conservative government promised, the rate of job growth slowed in those industries at a time when employment growth across the whole economy was accelerating. In the year before abolition around 17,800 full time equivalent jobs were created in the wages councils sector, but in the year following abolition only 5,000 full time equivalent jobs were created; and, of course, there were falls in pay. I commend those figures to those who claim that if we introduce minimum wages there will be job losses. The experience of wages councils proves exactly the opposite.
The sector hardest hit was hotels where the average earnings of all workers--men, women, manual and non-manual--fell in real terms after 1993. Even in those
industries where there have been increases, such as clothing manufacture and food retailing, they have been significantly below those for service and manufacturing generally. A survey conducted in 1995 to examine vacancies that would previously have been covered by wages councils found that nearly half offered lower wages than would have been payable had wages councils remained in existence. Since 1979 the advent of Conservative administrations committed to the unfettered operation of the market has meant that the rich have become richer and the poor have become poorer.We have witnessed the advent of so-called flexible employment. This may have suited some employers, but it was certainly disastrous for many employees. Most people like some degree of stability about their employment; it helps them to plan their lives. The Conservatives have attributed their heavy defeat at the polls last year to a variety of causes but they still fail to understand the enormous part played by job insecurity, affecting as it does large sections of the population including those who were once their natural supporters. Flexible employment has all too often meant short-term contracts, part-time working when full-time jobs would be preferred, contract and agency working, seasonal working and--perhaps the most exploitative work of all--zero working where an employee is expected to be on call, sometimes even at the work place, and is paid only when called upon to work, usually at a miserable hourly rate.
I am delighted that the Bill seeks to define "employee" to include the contract or agency worker quite specifically and also home working which exploits so many women. I am not sure about zero working but I believe that that is also covered by the provisions of the Bill. I am glad that detailed arrangements for enforcement via employment tribunals are set out in the Bill. It is also envisaged that there will be some form of inspectorate as there was for wages councils. Employees are offered protection against discrimination of any kind, including dismissal, for seeking to enforce their rights to a minimum wage. That is a very necessary provision.
This evening we have heard cries of, "What about the rate?" I am content to leave that to the low pay commission which I understand is to remain in being and will probably be given a statutory base. The rate may change from time to time, and it is therefore not appropriate to include it in primary legislation. The commission will have the job of consulting those with a particular interest, and I am sure it will do it well.
I am particularly happy that the Equal Opportunities Commission, of which I was once a member, has sought national minimum wage legislation and has already made submissions to the low pay commission. There are still substantial differences between male and female earnings despite more than 20 years of equal pay legislation, although the latter has made an enormous difference to job opportunities and pay for many women. A national minimum wage will help to improve matters for women at the lower end of the earnings scale.
Good employers have nothing to fear from a national minimum wage. An increasing number express support for it. Most of them will have no difficulty paying it since they realise that a well-motivated work force depends on fair treatment and adequate rewards to employees. Why should the taxpayer continue to subsidise employers who believe that they can make a profit and stay in business only at the expense of paying employees too little for them to live on? The total cost of the subsidy to the in-work poor is of the order of £3 billion pounds a year, which is equivalent to £120 a year for each taxpayer. This is a very good Bill. I am delighted that we have it, and I congratulate my noble friend the Minister and his colleagues on its introduction.
8.56 p.m.
Baroness Eccles of Moulton: My Lords, I am very pleased to take part in this debate on such an important Bill. In spite of the Minister's comforting words, it has the potential for making unpredictable and perhaps damaging changes to our economy. I shall pursue a theme that has already been emphasised by my noble friend Lady Miller and the noble Lord, Lord Harris. I begin by reminding the House of the words of the Labour party in its election manifesto. It promised to introduce,
- "a statutory level beneath which pay should not fall with a minimum wage decided...according to the economic circumstances of the time and with the advice of an independent low pay commission".
One difficulty that arises in debating the Bill is that we do not know what discussions have taken place between the Government and the Low Pay Commission regarding the latter's terms of reference. We do not know what advice the commission will give; nor do we know how the Government will react to that advice, which, as we understand it at present, they are not bound to accept. It is not unknown for governments to seek advice on pay and then not take it.
A second and more serious difficulty is the enabling nature of the Bill. It will give the Secretary of State wide powers to decide not only what the minimum wage should be but how pay will be defined. For example, does it include benefits in kind? Nor has the pay reference period been decided. Will calculations be based on total pay received over one week, four weeks or some other period? I disagree with the Minister when he says that nothing is lost by pushing ahead with legislation before the Low Pay Commission has reported.
The resulting vagueness on the face of the Bill makes it impossible to evaluate the probable effects, and the unintended consequences, of this proposed interference with interactions within the employment market. All there is to go on is a rather unsatisfactory clue or two. The Chancellor of the Exchequer has said many times that his objective is to make work pay. He has shown in the recent Budget that, within public expenditure constraints, his aim is to improve the position of the low paid from 1999 onwards. How does this policy initiative tie in with a minimum wage? Has the Chancellor's Budget speech engendered a fresh discussion between the Secretary of State and the Low Pay Commission in
the light of the terms of reference added last year, which ask the commission to "consider and report on any matters referred to it by Ministers"?Further, it is hard to engage in constructive debate without some knowledge of where the central thrust of the Government's policy towards minimum pay lies. Is it to provide a safety net for those who, for whatever reason, fall foul of imperfections in the market?
An example of gross pay which would presumably be above the safety net is £5 an hour for a 36-hour week, bringing in £180. But another example would be a security guard guarding an empty building and working long hours on a basic rate of £2.50 an hour. A 72-hour week would thus bring in the same gross pay as the first example. We might pause and ask ourselves why anyone would want to take such a job. Perhaps they are doing a distant learning course or even writing a novel in the silent watches of the night with only an alsatian to distract them. Be that as it may, are the Government concerned primarily to provide a safety net for the unwary who tend to be employed in the service sector, both public and private? Alternatively, are the Government minded to accept the Old Labour view of a basic minimum wage at, say, half average male earnings, as the foundation upon which the structure of all pay is to be set? That would result in all incentive payments being up for renegotiation and all differentials being fiercely defended. It seems highly unlikely that that is the intention of the present Government. The trouble is we do not know, because the Government have not told us.
In conclusion, one thing is clear. The decisions that will be made, if and when this unsatisfactory Bill becomes law, will be vital to the continued good economic performance of the United Kingdom. In that respect, in my view, a national minimum wage will not be a help. However, if it is to be introduced, perhaps I may emphasise again how important it is to follow the example of Canada or New Zealand and set it at a safety net level and not at a level which would result in increasing the pay of the majority. That would be a certain recipe for job losses. The safety net approach would be more consistent with the Chancellor's declared aims.
Nevertheless, it is frustrating, not in the spirit of openness, and--dare I say it?--bordering on the undemocratic for your Lordships to be left so much in the dark about the Government's intentions. If the chief executive of Barclays Bank can deliver his considered advice on national insurance to the Government in so short a time, why is it taking so long for the Low Pay Commission to publish its advice?
9.2 p.m.
Lord Wedderburn of Charlton: My Lords, I congratulate the Government, through my noble friend the Minister, on bringing forward this Bill and the low pay commission that goes with it. I was pleased to hear that my noble friend had fortified himself before our debate, so that he will be vigorous in carrying those thanks down to the other end of the building.
Minimum wage laws have been a long time in their gestation. Bills were presented to Parliament in 1800 and 1808, albeit they were thrown out. In writing about them Beatrice Webb said:
- "minimum conditions of service form an indispensable basis of any decent social order".
That is an argument that I have not heard addressed from the other side of the Chamber except, in one respect, by the noble Lord, Lord Razzall.
In view of the hour, I shall content myself by speaking mainly of the Bill's legal structure. In part that is because of the importance of some of its features. It is particularly important at a time when employees' organisations face transnational employers in the global economy, to which they have little defence, except occasionally by legislation. That in no way cuts down the importance of their organisation in trade unions.
Secondly, no one has yet mentioned the fact that we have some international obligations in this matter, or we did until the Thatcher government destroyed them; that is to say, the ILO Conventions 26 and 131 and Recommendation 135 which argue that it is an international moral obligation to have some kind of minimum wage arrangements.
I agree with my noble friend the Minister that the first problem is to reach all the workers to whom the protection is to be offered. My noble friend said that we must have universality. That is right, but on this matter the Bill is a legal landmark. The old categories of employee and self-employed, and, to some extent, worker, have gradually disintegrated in the market as it has developed. Waiters are hired as self-employed workers to serve at tables that are leased out to them. One driver of a lorry which was let to him on hire purchase by the employer was held by the court to be self-employed, even though he wore the employer's uniform and obeyed his orders.
In a recent case a security man's--how often security men have been mentioned; they form a group which is exploited atrociously--rights and duties were owed to so many different companies, and in such diverse manners, that the Court of Appeal held that he was not protected as an employee against unjust dismissal because his contract was one that was sui generis. The very special thing about the Bill is that it protects all such workers, even those whose contract is sui generis, as the Court of Appeal put it in that case.
The Bill makes also a valiant effort to protect two groups which again have been atrociously exploited: home workers--I am speaking of the old form of home workers (over 1 million of them) although there is a group of tele-workers whose conditions have not been explored properly by research--and agency temporary workers, or agency temps. They are protected by the various definitions of the word "worker" in the Bill, which means that any person under a contract, doing work for another, except the professional client or customer, will be protected.
The Government might consider extending the other power in the Bill--namely, the Secretary of State's power to extend the provisions to persons who are not otherwise workers within its provisions--to trainees and
bring them into the fold of the protection of a minimum wage. It is also questionable whether the definition of worker, which is admirably wide, requires the word "contract"; that is to say, there will be some who will try to evade the Bill, and they might, as it stands, make arrangements which were not technically contractual, to get them beyond its frontiers.Home workers and agency temporaries have been in the forefront of recent discussions and surveys. Last year, the Court of Appeal in the McMeechan case decided that one must look at the facts to decide whose employee the agency temporary worker was. Was he the agency's employee or the client's employee? Indeed, if there was no contract of employment where did the contract lie? The Government may wish to look again at their admirable attempt to defend temporary workers against such analysis. They may wish to consider a formula used in some European directives based on the approach of French law whereby the worker is prima facie presumed to be the employee of the agency and not of the client. That might be an addition which would make the position even more secure.
Your Lordships will be aware of the myriad forms of employment which workers, young workers in particular, are forced to take. I refer, for instance, to beck-and-call contracts, on-line contracts and zero hours contracts. Last year, I discovered, astonishingly, that a student in my graduate seminar, who was already laden with massive loans, had taken a job to help him through the year. He attended when the employers telephoned him to do so, including at weekends. However, once he arrived--and this is the esoteric form of zero hours contracts--he had to sit out the shift and if they wanted him to work they would call on him. But he was paid only for the time that he worked and not for the time waiting in the wings, hoping that the intolerable rate of £2 an hour might be paid to him for a little movement rather than remaining in a sedentary position.
That outrageous Taylorist abuse is one which perhaps demands more general legislation. I say to the noble Lord, Lord Razzall, hoping that he would be in his place, that the Bill cannot do everything. It is not the job of the Bill to deal with the problem of the gender gap. Indeed, I wonder whether it is within the Long Title. That is not to say that I do not believe that steps should not be taken; the gender gap in wages is much too great. Perhaps the Bill concentrates on what it does well.
There is a maxim which is applicable to the Bill. It is that no rights are stronger than their sanction. This Bill faces that problem by using, rather in the manner of the modern legislation on safety at work passed by the Labour government of 1974, not one but a whole series of interlocking legal remedies. It does not make the mistake that so much employment legislation has undergone of leaving everyone with only an action in the industrial tribunals (we must now call them employment tribunals) and a remedy which is scarcely enforceable. The Bill puts forward, both in the employments tribunals and in the courts, civil actions, criminal prosecutions and penalties and the intervention of enforcement officers with wide powers. In that
respect, too, the Bill deserves congratulations on not being mealy-mouthed about the enforcement of its provisions.The work of the enforcement officers is likely to be a critical component. The question must be asked: is the intention to give some of the tasks to an existing inspectorate, such as the VAT inspectors, or to create a new one? No doubt the Government will tell us their plans and we can consider them when they are announced.
Finally, it is for consideration whether the mechanism of enforcement might have one aspect added to it. It is to give to a representative trade union the status to appear in court on behalf of workers to defend a range of rights under the Bill. In France, since the law of 1920, unions have been regular parties to actions in various courts which were in defence either of particular workers' interests or of the so-called collective interest, l'interet collectif, which is a well-known concept in the civil law. It is my understanding that the working group on representative litigation set up by the noble and learned Lord the Lord Chancellor does not have that matter within its remit, or indeed the jurisdiction of the employment tribunals. However, if I am wrong the matter should surely be put on its agenda.
We have in this Bill a basis for a social advance which is of particular importance despite any adjustments or amendments that I have suggested. In my view, nothing that I have said can detract from the nature of the Bill or its general thrust which will be a powerful contribution to the cause of social justice for working people.
9.14 p.m.
The Viscount of Oxfuird: My Lords, for much of my life I have been overseas and have observed this country from a distance--in my youth at school in New Zealand and after that, working overseas, exporting and being involved with industry in this country from both the manufacturing and marketing points of view. I have seen the effect of government decisions, decisions made by companies, their managing directors and their workforces, on how they are perceived by the customer. Quite frankly, the only person who matters to any organisation's future and ability to pay anybody anything is a person called the customer.
I sometimes wonder whether the Government have two agendas: one for public consumption, as in the Budget; and the other conceived in the mist rising from Europe. Surely the Government must realise that the current unemployment problems facing our friends across the Channel are of their own making. Why do we have to put the blinkers on and follow them down that path and produce legislation like this when our competitors in the Far East have just been awarded a 30 per cent. price advantage due to currency devaluation against the strengthening value of sterling?
I go to Korea most years on business. The people of that country will be rubbing their hands with glee if this Bill is passed. When their nation suffered a recent economic downturn, the men and women defied their unions and went into the street with what might be
called "mattress" money--fistfuls of American dollars which they offered to their government in support of their sad economic situation. This will be their turning point as ours was in 1979. The luxury of even being able to consider this Bill has been won by every working man and woman in this country over the past 18 years.Why are we throwing away that hard-won position? The Government have been seduced by the emotion attached to wants as opposed to the reality attached to needs. In that there lies a big question: how long will it be before the electorate discovers that this Government's agenda has nothing to do with good governance but is totally devoted to the promotion of a political party--popular opinion versus public interest?
In opposition, the Government took every opportunity in your Lordships' House, when given the chance, to decry the Conservative government for their so-called lack of support for manufacturing industry. Claims that business is warming to the minimum wage are disingenuous. A statutory minimum wage is opposed by the CBI, the Institute of Directors, the British Chambers of Commerce, the Federation of Small Businesses, the Forum of Private Business and the small business bureau. That is a long list.
Why do they object? No one objects to people earning money but they do object to legislation. Sometimes I wonder whether we spend enough time stopping to truly consider the result of our actions. Strangely enough, the job-destroying characteristics of the minimum wage have not been lost on the Government. Despite earlier attempts by the President of the Board of Trade to fend off advice from the Minister without Portfolio, and her indications that there will be no variations to the national minimum wage, Clause 3 includes a provision allowing the holder of her office to decree by regulation a lower rate for younger workers and trainees.
The fact that the Government have not come forward with a rate for the minimum wage is no accident. Obviously they know that announcing the figure would prompt many estimates of the cost of the minimum wage, as we have already heard this evening, and its impact on jobs. Not a word has been heard since the general election; indeed, the DTI's estimate in 1996 was an additional million on the jobless total. How will the Government explain to the country the cost of 2.3 million unemployed?
Finally, regional variations have already been mentioned. Perhaps the Minister can tell the House whether any real consideration has been given to this area. Surely, the national minimum wage will have a greater effect on those employing in the north east than those employing in London. I do hope that your Lordships will think very, very carefully before passing this dreadful legislation.
9.20 p.m.
Lord Evans of Parkside: My Lords, unlike the noble Viscount who has just sat down, I left school at 15 years of age and went to work in the shipyards on Tyneside. I worked there for the next 28 years and I worked in some of the hardest, toughest and most dangerous industries in this country. I saw the impact on the lives
of so many people who worked in those industries. Indeed, I saw people killed in the shipyards. I also had responsibility for helping the widows and wives of men who had been killed or seriously injured, and I saw men dying because their lungs had been destroyed by asbestos and other industrial substances. While I agree with the noble Viscount that the customer is of paramount importance, I should like to remind him that the worker also has some rights and is entitled to some justice in our society.That is why I unreservedly welcome the Bill, which, in my view, honours one of the most significant general election pledges that the Labour Party made. The Labour Party's manifesto promised to introduce a "sensibly set minimum wage". I was also pleased that the Bill was introduced so quickly into the other place on 16th December last and that it was finally concluded, after a marathon all-night sitting, on 9th March. If any noble Lord takes the trouble to read the record of the proceedings, he will see that the committee in the other place sat for many hours, including a marathon sitting which was the longest since the war, as the Tory Party and Tory MPs fought tooth and nail to try to derail, prevent and stop this legislation.
From the speech that we heard tonight from the noble Baroness on the Front Bench opposite, it is quite obvious that the Tory Party has not changed at all; indeed, it is obviously determined also to fight the Bill in this House. However, I should remind Members opposite that the Bill received considerable consideration in the other place. I trust, therefore, that their opposition to the Bill will be tempered by the fact that it is necessary to have this legislation on the statute book at a reasonable time without a lengthy filibuster.
For the first time, this Bill will create in Great Britain a national minimum wage and it will bring our country into line with almost every other developed country, all of which have some form of national minimum wage. This legislation, taken together with the strategy that the Chancellor of the Exchequer announced in his Budget last week, will lay down the framework for a more just and a much more decent society than we have had over the past 18 years. I appeal to noble Lords opposite: surely employees, workers, are all entitled to reasonable pay and conditions. They should certainly be free from some of the gross exploitation which many of them have suffered over the past few years.
I spent 23 years in the other place. Sadly, for 18 of those years, I sat in opposition and watched Tory governments successfully abolish workers' rights with Bill after Bill through all those years. First they hamstrung the trade unions, the workers' main defence mechanism, and then they abolished the wages councils in 1993.
I remind the House of the words of Winston Churchill when in 1909 he introduced the wages boards which were the forerunners of the wages councils. He said,
- "Where you have what we call sweated trades, you have no organisation, no parity of bargaining; the good employer is undercut by the bad employer, and the bad employer is undercut by the worst".
Those words were uttered 89 years ago. The wages councils in this country existed right up until 1993 and provided a modicum of cover for those in the most sweated trades in this country. Those words proved to be extremely wise, as was realised when the wages councils were abolished. The Tories claimed that abolition of the wages councils would create jobs, albeit at lower wages. There is scarcely a shred of evidence that a single job was created by the abolition of the wages councils. However, there is plenty of evidence of wages in certain sectors declining badly because of the loss of the wages councils.
Over the past few years every Member of Parliament could have regaled this House with details of some of the most appalling wages that were paid to workers in pretty awful situations, as revealed to those MPs at constituency surgeries. The words of my honourable friend Chris Pond, the Member of Parliament for Gravesham--who for 17 years worked for the Low Pay Unit and probably has more knowledge and experience of these matters than any other person in the United Kingdom--are probably the most telling. In another place he gave details of the Low Pay Unit's Christmas "Scrooge of the Year" award. Noble Lords can read his speech at col. 201 of Hansard of another place of 16th December. He stated that one of the previous,
- "nominees for the award included the employer of a woman who worked in a residential nursing home. In a letter to her, the employer stated 'I would like you to work 5 pm to 9 am Monday to Sunday inclusive'. That is 112 hours of night work. The letter goes on: 'Salary will be paid in arrears at a rate of £150 a week', which is about £1.34 an hour".
Another "Scrooge" award winner was a clothing workshop employer who paid his staff the princely sum of 59p per hour. A Birmingham chip shop employee took home 80p an hour. The recently established TUC hotline uncovered cases such as that of a waiter paid £12 for an eight-hour shift. His tips were taken from him at the end of each day.
That Tory government policy which they ushered through both Houses of Parliament created a massive burden for the taxpayer as well as a degree of poverty for millions of workers in this country. In 1996 more than £2 billion was paid in family credit alone to subsidise employers who paid these scandalous wages. The incredible Tory claim that abolishing wages councils would create jobs must be put alongside the even more incredible Tory claim made before the 1992 general election that a national minimum wage would result in 2 million lost jobs. Unless my hearing went astray I believe that the noble Viscount who spoke before me reckoned that 2.3 million jobs would be lost as a result of this legislation. I notice that the noble Baroness did not offer any figure in her speech.
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