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Viscount Thurso: I should like to ask the Minister one question. Before doing so and speaking generally on training, I have always believed that the minimum wage is just that--a minimum wage--and that everyone employed should be entitled to it. Once people are trained, they should move on to higher rates of remuneration. Therefore, I do not quite support what the noble Baroness said. Indeed, in all the industries where I have been employed, we have tended to take the view that you take people on at the specific rate, you train them, and thereafter you receive the value of the training. In a later amendment we seek to reduce the age from 26 to 18, very much on that principle. It is in that regard that I should like to ask my question.

Colleges place people with businesses for work experience. Those people should be, although sometimes they are not, completely supplementary to the workforce. The employer takes them on specifically because of the co-operation that exists with the college in order to give work placement experience. In the hotel and catering industry, during a three-year degree course, students will typically spend six months on a practical experience split over several departments. In that circumstance they are not required by the business. I am fearful that if provision is not made, there will be a disincentive for employers to offer places to colleges. I am not sure whether that situation is covered later in the Bill. I should be grateful for the Minister's comments.

Lord Monson: The noble Viscount, Lord Thurso, is perhaps too young to remember that there was a time not very long ago when student nurses, trainee accountants and so on, far from receiving a minimum wage, had to pay something towards their training.

The noble Baroness has made out an excellent case for all three of her amendments. I wish to comment in particular on Amendment No. 4. It was mentioned that exemption has already been made for the under-26 age group. That group already receives concessions on rail travel, both here and on the Continent. The over-65s receive many more concessions--free prescriptions, subsidised rail travel, and free bus, Underground and suburban rail travel--as well as a state pension and, in most cases, an occupational pension. Why on earth should they not be allowed to work for a lowish wage for fun, as it were, or just to keep their hand in or to give them contact with other people, if that is what they wish?

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7.30 p.m.

The Earl of Balfour: I should like to speak to Amendment No. 5. I shall give the Committee a specific example of something that happened to me. When I left the sea with, I am glad to say, a master's certificate in my pocket, I wanted to get into another industry; namely, the manufacture of wire and wire ropes. It was arranged for me to go to America to learn that trade in a firm which was very friendly with a firm in Scotland. I went over there and worked in every department of the firm for about nine months, which enabled me to receive a thorough grounding in the trade. However, that was on the very clear understanding that I received no wages whatever. In fact, I was warned that if I did receive any wages it would very much upset the wire-drawers union and that I would also be in quite serious trouble with the US income tax authorities.

I have given the Committee that specific example, but a similar sort of case arose a while ago. I am now a farmer. The son of a very good friend of mine wanted to gain experience of farming on other farms and came to my farm to learn. He lived with me and my family but, again, for various tax reasons, he was paid not a single penny. In that respect, I feel that those people who want to receive a proper training could find themselves in difficulties under the provisions of this Bill.

Lord Fraser of Carmyllie: I rise to offer a few additional comments on Amendment No. 3, which relates to the age of 17, or the compulsory school-leaving age. The Minister will be aware from previous exchanges that one of the matters that I believe that this Chamber ought legitimately to be exploring at this stage is the interrelationship between those pieces of legislation, which, even after constitutional change affecting the rest of the UK, will remain within the purview of this Parliament. It is absolutely clear that the issue of employment law generally--and certainly the national minimum wage--will remain within the purview of the Westminster Parliament.

However, as Clause 55(4) makes clear:

    "For the purposes of this Act, a person ceases to be of compulsory school age in Scotland when he ceases to be of school age in accordance with sections 31 and 33 of the England (Scotland) Act 1980".

As I understand such matters, following on from Royal Assent and the establishment of the Scottish parliament, it is proposed that that 1980 Act is one which it would be for the Scottish parliament to amend, if it so desired. I want to be absolutely clear about that point. The difficulty lies in the relationship between devolved matters, such as education, and matters of employment, such as the national minimum wage. If the Scottish parliament were significantly to alter the school-leaving age, that would carry with it the potential for a significant change as regards those to whom the national minimum wage would apply.

I would be grateful if the Minister could confirm whether that is the case. If the Scottish parliament were to change the provisions within the 1980 Act from, let us say, the age of 16 to the age of 18, would it mean that no one in Scotland would come within the national minimum wage until he or she reached the age of 18? Alternatively,

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is this one of those rather grey areas where the purpose of the reserved matter is effectively being defeated and where accordingly, in such circumstances, there is the potential for an override of what the Scottish parliament would do?

My understanding is that there is such a risk attached. If that is the case, then, for the purpose of clarity and indeed for the purpose of uniformity, across the United Kingdom, which my noble friend highlighted, perhaps I may suggest to the Minister that a preferable way to deal with the matter would be to do so within employment law to establish a single age. It would mean that the age limit would not suffer the risk of fluctuation in different parts of the UK and would, within employment law, be applied uniformly across the country. For that reason, at least part of Amendment No. 3 would seem to me to have a value as regards securing such uniformity.

Lord Clinton-Davis: This has been a somewhat long debate thus far. The remarkable and astonishing fact that has emerged from it is the revelation by the noble Baroness that she is approaching the age of 65. Indeed, I cannot believe it. I thought that she was about 33, but there we are. I have no doubt that the noble Baroness will continue with the undiminished vigour to which she referred.

In essence, the minimum wage will apply when a person has left school. The amendment would include on the face of the Bill a much more rigid situation--that is to say, a starting point of 17 years--from which entitlement to the national minimum wage would start. In replying to this series of amendments, it is important for me to point out the need to distinguish between the primary legislation and how it is framed and the flexibility which the Bill provides under secondary legislation, especially under Clause 3.

As far as concerns the Bill's framing, I suggest that the most logical place to draw a line for eligibility in principle for the minimum wage is as set out in the Bill; that is to say, at the age when a person no longer has to attend school and may enter full-time work. Therefore, on that basis, there is a clear dividing line between the world of education and the world of work for the purposes of the Bill.

However, there is a difference between the framing of the Bill and how it is to be implemented in detail. Here I refer to the power available to apply exemption or a different rate to those under the age of 26, and to the Government's particular request to the Low Pay Commission to consider whether, and if so how, that power might be used. It is true that there was a considerable amount of discussion in the other place about the possible consequences as regards the variation of ages in England, Wales, Scotland and Northern Ireland at which young people can leave school; and that, under the Bill as drafted, this would introduce an unfairness in entitlement to the national minimum wage.

If there were anomalies, I submit that they would arise as a result of the different education systems in the United Kingdom. They would have nothing to do with the minimum wage as such. In practice, I do not believe that such anomalies would amount to very much. However,

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even if they did, there is no need to change the primary legislation as suggested by the amendment. Instead, we could simply make use of the powers available under Clause 3 to set the entitlement according to a strict age limit rather than school-leaving status. We shall certainly be consulting when we come to frame the draft regulations in this regard. Therefore, when Parliament comes to consider those issues, noble Lords will be able to embark upon a full debate on age exemptions. I submit that the amendment is unnecessary.

I turn now to the point made by the noble Viscount, Lord Thurso. Many people on what is called work experience will not have contracts of employment or other kinds of employment contracts. Therefore they will be completely outside the scope of the Bill. Some who are engaged on work experience may be trainees or apprentices with contracts of employment. We have asked the Low Pay Commission to make recommendations on this point. We believe that Clause 4 deals with that issue. However, I am grateful to the noble Viscount for having raised that important matter.

The experiences of the noble Earl, Lord Balfour, are interesting but I am not sure that they are germane to the issues that we are considering here. In those days the situation was completely different from the position with which we are currently dealing, and will deal with when this Bill is enacted. The noble and learned Lord, Lord Fraser, raised a point which I hope I have dealt with in the remarks I have just made. I notice that he nods his head in agreement.

I turn now to Amendment No. 4 which would have the effect of removing people of pensionable age from the scope of the Bill altogether. It would take away their right to the national minimum wage. I do not know whether that was intended but in our view that is what the effect would be. Certainly I agree with the contention made by the noble Baroness that those who acquire a certain age are still able to make a contribution. I declare my interest without revealing my age, which is a very great one. As far as I can see, the amendment would remove the right to a decent minimum from workers who have retired from their main jobs but who want to supplement their pensions by working, for example, at a local shop. It would also affect those who had not retired but who continued in their original job after attaining the age of 65. Why should employers be allowed to pay less than the national minimum wage to those older workers who have gained a lifetime of skills and expertise and who can still be of great benefit to firms for whom they work? Many pensioners would be excluded by this amendment. Our calculation is about 272,000 men over 65 and 504,000 women over 60 are in work.

The amendment would not only deprive those aged 65 and over of the right to a decent wage, but it would also encourage job substitution. That point was not taken up by the noble Baroness. I refer to the replacement of younger workers by older workers. That is not the outcome that we intend to produce under the Bill. The Committee will be aware that Clause 3 provides for a single exception on grounds of age for young people below 26. There are complex issues involved here. That is why we have asked the Low Pay Commission to look at the position of young people and to make recommendations. However, the

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issues are different as regards those aged 65 and over. Many will have retired from their main job but others will still continue in their main job. Whatever the case, they still have skill and expertise to offer. They deserve the rate for the job, and the rate for the job should be at least the national minimum wage. We do not need to provide for different treatment of those aged 65 and over. I hope that the noble Baroness will withdraw her amendment.

Amendment No. 5 effectively addresses the issue of how we should deal with people who are in training, or, more particularly, workers who are working only as part of a recognised training programme. The amendment would have the effect of removing entitlement to the minimum wage from people within this classification. We want a well trained, adaptable, motivated workforce. Certainly rapid staff turnover is not something that we aim at. We do not want employers to lose the incentive to offer training. We asked the Low Pay Commission to consider particularly the position of young people, many of whom will be learning a job and will be willing to undergo training to improve their opportunities. That is to be encouraged. It is not something that we would wish to discourage.

The commission was also given the task of considering and recommending a different rate for trainees. Clauses 3 and 4 of the Bill have made provision to enable the Government to respond--if we agree--to any recommendations which are made by the commission in this area. I think it is right to frame the primary legislation in the way that we did. These situations can then be adjusted by the secondary legislation which, I repeat, Parliament will have a full opportunity to consider. The amendment would provide a great deal of unnecessary detail on the face of the Bill which would be unhelpful.

Perhaps this is a suitable moment for me to make my next point as it applies to much else in the Bill. We intend to consult by circulating draft regulations covering the regulations which the commission proposed on these issues, and no doubt on others. They will be subject to affirmative resolution.

In more technical terms it could be said that the amendment would go too far because it would take the trainees in question outside the entitlement to the national minimum wage altogether, whether that is the standard rate or, if that is decided, a modified rate. I believe that would give entirely the wrong message to employers and workers. After all, trainees are an important part of the workforce. Their training will make them more valuable to a company and will have a great effect on their future working lives. For all those reasons I hope that the noble Baroness will withdraw the amendment.

7.45 p.m.

The Earl of Balfour: Before the noble Lord sits down, I point out that in the example I gave I tried to illustrate that for various reasons I was not allowed to earn any money at that time. I think particularly of a student who comes to this country and who wants to study textiles but for technical reasons he is not allowed to earn money in this country. That is exactly what happened to me. We are

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now in the common market but during the period to which I referred a Dutch student could have got into trouble if he had earned money and then crossed borders.

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