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Lord Haskel: The noble Baroness referred to the minimum wage in the United States. What she did not tell us is that exemption from the minimum wage applies only to small companies which do not engage in inter-state trade. I have been an employer in the United States for many years and I am quite familiar with that.
The noble Baroness's amendment would allow the Secretary of State to differentiate the calculation of a worker's pay according to the size of the business in which the employee works. Again, the same arguments apply about differentiation as my noble and learned friend Lord Falconer made when we were discussing some of the earlier amendments. To take a random example, in the situation where one size of hotel could be allowed to use accommodation as an offset and another size of hotel could not, those companies would be paying different wages. It would be confusing and unfair and would distort competition. The whole principle of the minimum wage is that it is a minimum wage. It is not the wage that people are being paid; it is the minimum wage that they are being paid. If firms can afford to pay more, they will pay more. So we do not see any justification for allowing such variations in the calculation of the rate.
I would ask the noble Baroness to reconsider her amendment. If she is not feeling well we can certainly have an adjournment for a few minutes.
Baroness Miller of Hendon: I thank the Minister. I am feeling well.
I do not agree with his argument. My understanding is that under the fair labour standards legislation of 1938, firms whose annual turnover is less than 500,000 dollars are exempted from the national minimum wage. I am perfectly happy to look into that again, but I believe my information is correct. That is the very point that I was making.
There are all kinds of other exemptions that happen in America for small businesses. That is the one area that we are particularly concerned about. My noble friend at Second Reading gave a good example of a small shop which would be caused enormous difficulties if the minimum wage were to come in. But that is another matter.
I shall certainly look into that, but I think that the Minister might also be advised to do the same. In the circumstances, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Razzall moved Amendment No. 27:
The noble Lord said: This is a probing amendment designed to test the Government's attitude on this particular point. As various Members of the Committee and Ministers have indicated, the way that Clause 2 works, and in particular Clause 2(7), is that it reflects the Government's determination to have only one national minimum wage and to remove from the Secretary of State the power to have anything other than one single minimum wage.
As the Committee will be aware, in particular we disagree with regional variation. On the other hand, the Government are determined to press on. The structure of the clause in subsection (7) confirms that there is to be a single minimum wage and that certain areas may not be excluded. Concern has been expressed that there is a problem of potential discrimination in setting the minimum wage in relation to employees who are not simply nine-to-five employees. Therefore, it should be made clear in the Bill that the minimum cannot be either recommended or fixed by the Secretary of State to deal separately with people who, for example, are doing night work or whose job is not a continuous nine-to-five job. There is a concern that there is insufficient protection in any anti-discrimination procedures. I should like to probe the Government's attitude in that regard. I beg to move.
Lord Falconer of Thoroton: The noble Lord has made absolutely clear the purpose of the amendment. He wants us to tell the Committee our attitude to workers who work, in effect, non-standard hours of work or patterns of work. He wants us to make it clear that such people are covered by the Bill and no distinction will be made in their case. I have absolutely no hesitation in giving him the assurance that he seeks in that respect.
We share the concerns of the noble Lord and those on his Benches. Indeed, we have always emphasised that workers who are marginalised and not typical--for example, part-time workers, home workers, agency workers, workers who are forced to work unsocial hours or who choose to work hours in an abnormal pattern--are often the workers most in need of protection. That is why we have clauses later in the Bill dealing specifically with them. I draw the attention of the Committee to Clauses 34 and 35.
As I said, we are happy to give the Committee the assurance that workers will not be discriminated against because of the hours they work or because they have an unusual pattern of work. After all, Clause 1 applies the minimum wage to all--and I emphasise "all"--workers.
The noble Lord's amendments apply the same protection to three different clauses--Clauses 2, 3 and 4. The effect of the amendment is slightly different in the context of Clause 2, where it would prevent the Secretary of State treating workers with different hours or patterns of work differently when making regulations concerning the calculation of the workers' hourly rates
The purpose of Clause 2(2) is to give the Secretary of State the flexibility to reflect in the regulations the many and varied types of working and pay arrangements which exist. The amendments proposed would prevent that. For that reason, I urge the noble Lord to withdraw Amendment No. 27.
The amendments he proposes to Clauses 3 and 4 would not have that detrimental effect, but we say that they are simply unnecessary. The Government have absolutely no intention of applying different youth or training rates to people on the basis of the hours or patterns of work they follow. The Bill applies universally, as Clause 1 makes clear.
Therefore, while the Government are entirely in sympathy with the points made by the noble Lord, we are keen to leave Clauses 3 and 4 as drafted. They are sufficiently restrictive to ensure that the clauses cannot be misused, and sufficiently flexible to allow for any unforeseen situations in the future where the Low Pay Commission, for example, may recommend some specific use for the powers in either clause. I urge the noble Lord to accept my assurances and withdraw the amendment.
Lord Razzall: On the basis of the Minister's assurances, I beg leave to withdraw the amendment. In the circumstances, I give notice that I shall not move Amendments Nos. 35 and 47 in due course.
Amendment, by leave, withdrawn.
Clause 3 [Exclusion of, and modifications for, certain classes of person]:
Lord Newby moved Amendment No. 30:
The noble Lord said: This amendment deals with the question of the minimum wage payable to workers under the age of 26. In a sense, I suspect that the amendment has been, or is about to be, overtaken by events. When we looked at the Bill as it first appeared before us, it was unclear what the Government's intention was in respect of workers under the age of 26. At that stage there was at least a theoretical possibility that they would not be subject to minimum wage protection. Therefore, we wished to put down a marker to show that we thought that that was unfair.
As a general principle, we support the concept of equal pay for equal work. There is clearly a whole raft of occupations in which someone undertaking work at the age of 18 is doing so on the same basis and with the same degree of output as someone who is considerably older. For that reason, we thought it appropriate to bring the coverage of the minimum wage down to the age of 18. Of course, the question then arises as to why we did
Our view is that the period in a young person's life between the ages of 16 and 18 should essentially be a period for education and training. A large majority of young people are, indeed, undertaking formal education and training during that period. Under our proposals for education and training, we would make that the universal position. In those circumstances, therefore, it would be inappropriate for us to go below the age of 18.
As regards this amendment and those grouped with it, given the fact that we understand that the Low Pay Commission is, in a sense, dealing with the matter along the lines that we propose--namely, that young people aged between 18 and 26 will be covered by the Bill's provisions and by the low pay minimum wage legislation--and bearing in mind that we have been slightly overtaken by events, I move the amendment simply to see whether we can flush out anything further from the Minister on the matter this evening. I move the amendment on that basis. I beg to move.
Page 2, line 40, at end insert--
("(f) different hours of work; or
(g) different patterns of work.").
Page 2, leave out line 42 and insert ("18.").
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