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Baroness Miller of Hendon: I thank the Minister. However, I think that I am now all right.
Lord Clinton-Davis: Amendment No. 20 seeks to ensure on the face of the Bill that an employer's expenditure attributable to training should not count towards remuneration for the purposes of the national minimum wage. If translated into practice, the effect of the amendment would work in favour of the worker. So I am delighted that the noble Baroness is confronting us with the vivid portrayal of herself as the workers' champion. I am delighted to see it. To that end, we are on the same side.
I do not think that it is necessary to change the Bill in the way proposed by Amendment No. 20. The function of Clause 2--we have said it over and again in debates--is to provide the necessary flexibility to reflect recommendations which are made now, but also recommendations and changes which might be made in the light of future experience. The amendment would be very prescriptive.
The purpose of Amendment No. 21 is to ensure that an employer's contributions to pension funds on behalf of the employee will count towards remuneration for national minimum wage purposes. In such cases this would have the effect of reducing the cash value of the minimum wage.
The Government aim to widen pension provision. The noble Baroness has said that she understands that to be the objective of the Government. Occupational pension schemes are an important part of this framework. I understand by the amendment that she would wish not to provide a disincentive to employers who might be considering such schemes. There is merit in that.
On the other hand, the amendment would have the undesirable effect of reducing the cash value of the minimum wage that a worker would receive. I beg the noble Baroness to appreciate that that is the side of the amendment which we find unacceptable.
The noble Baroness says that there will be a ministerial fiat to deal with all this. That is not right. We have said repeatedly during the course of the debates that we shall be consulting about the regulations. The regulations will come before the House. They will be subject to the approval of the House in implementing the minimum wage. Indeed, the affirmative procedure would apply in this particular case, so the House would have ample opportunities to look at these matters.
In the light of the amendment and the argument-- I had better not use the word beguiling or anything of that kind--which the noble Baroness has attractively put forward, I am not persuaded that we should change the Bill. I hope that the noble Baroness will withdraw the amendment.
Baroness Miller of Hendon: I listened carefully again to what the Minister said. I shall certainly read his remarks with great care in Hansard tomorrow. I am not sure whether it is beguilingly or attractively put, but whichever way it is put from over there, it is rejected. I have to say that the Ministers are definitely tempting me not to be so generous. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 21 and 22 not moved.]
The Deputy Chairman of Committees (Lord Murton of Lindisfarne): Before calling Amendment No. 23, I should inform the Committee that if this amendment is agreed to, I cannot call Amendments Nos. 24 to 28 inclusive.
Baroness Miller of Hendon moved Amendment No. 23:
The noble Baroness said: Amendments Nos. 23, 31 and 40 are to delete the whole of Clause 2(7), Clause 3(3) and Clause 4(2) respectively. These are the provisions which inhibit the Secretary of State from exercising any discretion over the application of the Bill.
If the proposed new clause, Amendment No. 29, to which I shall be speaking later, is accepted, then each of these subsections is inconsistent with it and would need to be removed in any case. I am afraid that the sequence in which the amendments are called is not the chronological order I would have preferred. There are
I believe that it is more important to concentrate on the principle of ensuring that the Secretary of State does not build a barrier preventing herself from adapting the Act in case of need. In each of the subsections I wish to delete, the Secretary of State is seeking to prohibit herself from making any exemptions or variations in the case of any of the very important factors that might call for just that. I have in mind variations for different areas of the country, different sectors of employment or undertakings of different sizes, as happens in the United States of America, which is one of Government's role models for the minimum wage, or for persons of different ages, which could have an adverse effect on older persons getting part-time jobs for which they are suited on grounds of health or family commitments.
I do not wish to anticipate the arguments that I shall be advancing in support of the new clause that I shall shortly be proposing, which is to give the Secretary of State the widest possible discretion to make exemptions. Although those arguments do bear repeating, if only in the hope that they will eventually percolate through the barrier of deafness that I think the Government have erected against the concept of giving themselves a safety net, I am well aware of the time.
The minimum wage is a new concept in this country. The Government are not following the experience of other countries, particularly the United States of America, but also other European countries. It is possible--I repeat, it is possible--that the Government may discover, when the Bill has been in force for some time, that they have made a mistake. I agree that at the moment, with their faint omniscience, they, and they alone, believe they know what is good for the country in every possible field and subject. Suppose, even with the crystal ball which the Secretary of State possesses, there is a change in circumstances and one of the parameters of these three subsections, what then will happen?
The Secretary of State will be unable to do anything without coming back to Parliament and begging for time out of a heavy legislative programme to put the matter right and to rectify her present refusal to consider the possibility that she might be wrong. In the meantime, any damage caused by the absence of discretion may go on and on, and may possibly become irrevocable.
The reason for the Government's present adamant refusal to allow any exceptions to the national minimum wage, apart from those very special ones which were wrung out of them in the other place, seems obvious. The Labour Party pledged to the unions that there would be a universal national minimum wage and Labour claims that it always keeps its promises. That is not true, as events of the past year have proved, but we need not go into that now.
So far as the unions are concerned, the Secretary of State is determined to keep that pledge, no matter what the cost to the country, the economy or individuals which may prove to be prejudicial. The power to create exemption in case of need is a matter of common sense
Lord Haskel: These amendments are exactly the reverse of Amendments Nos. 6 and 7. Those amendments concerned multiple rates by region, size of firm and so forth. In this group of amendments the noble Baroness is suggesting that the Secretary of State should have the right to make such exceptions.
My noble and learned friend Lord Falconer carefully explained that these exceptions are impractical and against the principles of the Bill. At this late hour, I do not wish to go over all the points which he made in explaining why they are impractical, but the same arguments apply in this case. The universality of the Bill is a source of its strength and we wish to maintain that. I do not see any pragmatic justification for sectoral exemptions, which is what the noble Baroness suggests. The amendments might be a recipe for confusion and uncertainty and there would not be the safety net which she suggests.
New sectors constantly emerge or combine with old sectors. Modern firms now encompass multi-sectoral activities, so how would it be possible for employers and workers to cope with a range of different sectoral rates? That is why we do not believe that it is right for the Secretary of State to have these powers.
I hope that with that explanation in mind, the noble Baroness will withdraw her amendment.
Baroness Miller of Hendon: I do not agree with the Minister, but I shall withdraw the amendments. We might well return to them at a later stage.
Amendment, by leave, withdrawn.
[Amendments Nos. 24 and 25 not moved.]
Baroness Miller of Hendon moved Amendment No. 26:
The noble Baroness said: In moving Amendment No. 26, I shall speak also to Amendments Nos. 34 and 44. They relate to Clause 2(7)(c), Clause 3(3)(c) and Clause 4(2)(c). The Secretary of State declines to give herself powers to make regulations distinguishing between undertakings of different sizes. This is the most inexplicable of all the proscriptions which the Secretary of State is imposing on herself. It brings me back to the question of why the Government are so adamantly trying to impose a regime of absolute invariable universality.
The Labour Party, in its argument in favour of the whole concept of a minimum wage, pointed to the United States of America which has had a minimum wage since 1938. Indeed it has. However, it has also had an exemption in favour of small businesses. A small business is currently defined as one with an annual turnover of less than 500,000 dollars. At current rates of exchange, that is
Page 2, line 34, leave out subsection (7).
10.30 p.m.
Page 2, leave out line 38.
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