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Lord McIntosh of Haringey: My Lords, the answer to the noble Lord's first question is that for 40 years Chief Secretaries have tried, but we have succeeded. The answer to the noble Lord's second question is as I acknowledged in responding to the noble Lord, Lord Newby; namely, that there are always going to be difficulties in the definition of what is capital and what is revenue. I gave the example of expenditure on human capital, which the Office of National Statistics will not allow us to count as capital. We are approximating as closely as we can to internationally recognised norms of accounting in both the public and private sector. As with employment statistics, I believe that that is the right way to go.

Baroness Maddock: My Lords, can the Minister clarify the Government's thinking as regards best value in local government? I and others understood that the Government were still consulting on best value and that pilot projects were being set up. Can he also expand a little on how the Housing Inspectorate will work?

Lord McIntosh of Haringey: My Lords, the answer to the noble Baroness's first question is that we are consulting on that subject. As regards her second question, those matters will be covered in the publication next month of the comprehensive spending review. While I am on my feet, may I correct something that I said to the noble Lord, Lord Boardman? The resource accounting and budgeting system will be introduced from the year 2001-2002 and not a year earlier, as I suggested.

Lord Desai: My Lords, I welcome the separation of capital and current accounts and the golden rule. Is the projection of 2.25 per cent. growth in real expenditure and output a pessimistic forecast of output? It is below the trend experienced by the economy over the past 40 years. The growth rate in expenditure is even lower than the quoted 3 per cent. per annum. Can my noble friend say whether it is just a cautious outcome or do the Government have genuine forecasts that the economy will grow more slowly than in the past?

Perhaps I may register one small disagreement about the debt-GDP ratio. I do not see how a low or high ratio is any indication of economic prosperity. Between the years 1970 to 1990 the debt-GDP ratio decreased from 70 per cent. to 27 per cent. They were not the happiest years for the British economy. We all complained how miserable we were. Does my noble friend agree that getting that ratio down should not be a primary objective?

Lord McIntosh of Haringey: My Lords, the projection of a 2.25 per cent. increase in current public expenditure is, as my noble friend said, a cautious figure. It is achievable within the constraints of the golden rule and the debt-GDP ratio. It is not necessarily

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the same as forecasts for output as a whole. It is designed to be not too far away from the figures for output as a whole.

My noble friend has a point about the debt-GDP ratios. They are not always associated historically and statistically with economic growth. That is true. However, when we are confronted with such wild accusations of tax and spend, it is important at the very least to be able to remind noble Lords opposite that this is not a Government who are moving rapidly towards a command economy.

Lord Higgins: My Lords, I certainly go along with the increased emphasis on output measures and on the move to accrual accounting, and particularly balance sheets, which is something that the House of Commons Select Committee on the Treasury has advocated for a long time. First, on balance sheets, is it the Government's objective that the government balance sheet should go up or down in value? Secondly, the noble Lord gave the impression that if the Government sold off assets and invested money, that would result in a net increase in investment. Perhaps the noble Lord will confirm that that is not so. It may be more efficient, but it does not change the amount of investment.

Following the point made a moment ago by the noble Lord, Lord Desai, perhaps I may express my grave concern about the way in which the Government's overall policy is developing, with an independent Bank of England which has a clear objective, largely relating to inflation, and now, apparently, with a fiscal strait-jacket with regards to public expenditure. There is an assumption that that means that the tax side will not change. Presumably, that is not the position. Therefore, at least at this stage, remarks about the PSBR or other surrogates for it are not helpful. I share the view of the noble Lord, Lord Desai. I suspect that the Government's forecasts show a low rate of economic growth compared with past history--and that is because of the way in which the Government's monetary and fiscal policies are interacting.

Lord McIntosh of Haringey: My Lords, the Government's forecasts of economic growth are publicly available. Anybody can produce projections on the Treasury model--and that frequently happens. I simply do not know the answer to the noble Lord's question about whether we expect the balance sheet to go up or down. We expect it to balance. Whether we expect it to go up or down in total depends largely on the way in which we value the fixed assets which are taken into account. Work on that is still developing.

The noble Lord is right in saying that the interaction of all those factors is extremely complex. I thought that by stating our objectives more clearly we would be increasing the transparency of government economic policy. I do not describe these as a "strait-jacket". It is much better to do what we are doing here and to make forecasts about what we hope to achieve through economic policy than to do what the previous

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government did, which was to set continuing targets for tax reductions regardless of, or without any conscious reference to, their effect on economic growth.

National Minimum Wage Bill

6.12 p.m.

The Minister of State, Department of Trade and Industry (Lord Clinton-Davis): My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.

Moved, That the House do now resolve itself into Committee.--(Lord Clinton-Davis.)

On Question, Motion agreed to.

House in Committee accordingly.

[The DEPUTY CHAIRMAN OF COMMITTEES (Viscount Allenby of Megiddo) in the Chair.]

Clause 1 [Workers to be paid at least the national minimum wage]:

Baroness Miller of Hendon moved Amendment No. 1:

Page 1, line 7, leave out ("by his employer").

The noble Baroness said: When I first read the Bill and then saw this amendment, which looks very simple and which was proposed by my colleagues in the other place, I wondered why the Government were making such a fuss, but this amendment was debated at considerable length--for almost three hours--in Committee in the other place. It was described then as a "probing" amendment, but as no answer was given to the basic question, we have to take up the time of your Lordships' Committee by raising the matter again. The basic question is: why do the Government insist on the inclusion of the words, "by his employer", when to any dispassionate reader they seem to be mere verbosity? As long as the employee gets the minimum wage, why does it matter who pays him?

The debate in the other place largely revolved around the situation of catering and hairdressing staff, whose remuneration includes tips whether given directly to the employee or shared out in the tronc system. There are stories--perhaps apocryphal--that the doormen and cloakroom attendants at major London hotels, far from being paid any wages, used to pay the hotel for the concession. There are other examples. There used to be a system whereby taxi drivers kept a proportion of the fares and all the tips. Those drivers would not have regarded themselves as the employees of the vehicle owner but merely as hirers of it. However, under this Bill, it is likely that they will cease to be treated as self-employed and would be employees.

Then there is the situation where an employee is given a commission on what he takes in. I am not talking about ordinary commercial travellers and salesmen but about people such as seaside deckchair attendants who used to keep part of the ticket money as an incentive to be more assiduous. I doubt whether the unions permit local councils to operate that system these days.

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I repeat my question: why do the Government insist on these three little words which do not add a single thing to the Bill and the exclusion of which will not detract from the clause by one iota? Is it because of some hidden agenda to abolish tipping, a long-held desire of old Labour, emulating the Soviet Union where it was impossible to get a taxi once the driver had performed his daily quota of rides?

Today I read a report in the Daily Telegraph--it was repeated many times on the radio--of a leak suggesting that the Low Pay Commission agrees with us. I shall be pleased if that report is correct. The question is: do the Government agree with the Low Pay Commission?

My other question is: when are the Government going to tell us what the Low Pay Commission's entire report says--or are the Government going to continue with their practice of treating Parliament with contempt and announce their policies to favoured journalists instead of to Members of both Houses, a practice for which Madam Speaker has reproved the Government on several occasions in the past few weeks?

In the light of the leaked report, will the Government undertake to accept and implement this amendment? I beg to move.

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