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Lord Clinton-Davis: I shall attempt to answer the noble Lord's request to be flushed out. The noble Lord will appreciate that Clause 3 is an enabling provision. It will allow us the flexibility to reflect the recommendations of the Low Pay Commission; but, at the same time, it will limit the scope of the clause to be misused, as we would see it, by differentiation by region, size of business, and so on.
We chose to invite the commission to consider any exemptions or variations for young people up to the age of 26. My honourable friend the Minister of State made it very clear in the discussions which took place in Committee in another place that the Government are not seeking to steer the commission to exempt all those under the age of 26. We needed to draw a line somewhere; and we drew it at 26 because that was where the New Deal drew its line.
The noble Lord has recognised that his amendments are, to some extent, deficient; indeed, he chose to use the phrase, "overtaken by events". They would result in a full adult rate for all those over 17. That is not consistent with evidence we have received from other countries and from academic studies showing that there are particular circumstances in the youth labour market which point towards some different treatment for young people. These are matters that remain to be dealt with later when the Low Pay Commission report is before us and we have tendered our reply in relation to its recommendations. I urge the noble Lord to withdraw the amendment.
10.45 p.m.
Lord Newby: I am grateful to the Minister for his explanation. I shall obviously withdraw the amendment but before I do so I reiterate the point that we believe that the principle of equal pay for equal work is a valid principle. When the detailed provisions for the minimum wage are brought forward we shall consider the extent
to which that principle has been accepted by the Low Pay Commission and the Government. With that caveat I beg leave to withdraw the amendment.Amendment, by leave, withdrawn.
The Deputy Chairman of Committees (Viscount Allenby of Megiddo): Before calling Amendment No. 31, I inform the Committee that if this amendment were to be agreed I cannot call Amendments Nos. 32 to 35.
[Amendments Nos. 31 to 37 not moved.]
Clause 4 [Power to add to the persons to whom section 3 applies]:
[Amendments Nos. 38 to 47 not moved.]
Baroness Miller of Hendon moved Amendment No. 48:
After Clause 4, insert the following new clause--
(" .--(1) The Secretary of State, after such consultation with the Low Pay Commission as may be reasonably practicable, may by order suspend the operation of this Act if he is satisfied that such suspension is required in the public interest by extreme economic circumstances.
(2) An order under subsection (1) may provide for the operation of this Act to be suspended in whole or in part and, in particular, may provide for the provisions of this Act to be suspended in respect of--
(a) any area or description of area; or
(b) any individual employer.
(3) No order shall be made under subsection (2)(b) above unless the employer has given the Secretary of State not less than 30 days' notice in such form as may be prescribed that, in the opinion of the employer, such an order is necessary in order to prevent the loss of jobs.
(4) A statutory instrument containing an order under this section shall be laid before each House of Parliament after being made.
(5) Unless an order under this section is approved by resolution of each House of Parliament before the end of the period of 28 days beginning with the day on which it is made, it shall cease to have effect at the end of that period.
(6) In reckoning the period of 28 days for the purposes of subsection (3), no account shall be taken of any time during which Parliament is dissolved or prorogued or during which either House is adjourned for more than 4 days.
(7) An order under this section which does not cease to have effect before the end of the period of 3 months beginning with the day on which it is made shall cease to have effect at the end of that period.").
The noble Baroness said: There have been several amendments I have not moved, not because I do not think they are important but because I am aware of the lateness of the hour and I think it is inappropriate to detain the Committee even longer at this stage.
This amendment concerns the power to suspend the national minimum wage in the event of local or national emergencies. I shall try to cut down on my notes. I remind those on the Benches opposite that one important rule in politics and indeed in government is that you never say "never". I do not possess the crystal ball that the Government claim to own, but I think there
Meridian Motor Cycles became insolvent and, with the encouragement of a former Labour government and with a great deal of public money, were taken over by an ill-fated workers' co-operative. I do not remember what the financial arrangement with the employees comprised, but supposing that in this or in similar circumstances the employees volunteered to forgo all or some of their wages in a bid to save their firm and their jobs. Under the Bill as drafted they could not do so for fear of running foul of the Bill and the penalties imposed by it.
The proposed new clause would give the Secretary of State power to suspend the national minimum wage both as regards an area or as regards a particular employer if the circumstances warranted it, but only after consultation with the Low Pay Commission. We have made ample provision for a suspension to be brought before Parliament within a short space of time, and also for the time limit not to be affected when Parliament is not sitting. We have also made provision for the order to come to an end in no more than three months. Therefore there is no question of an unlimited suspension.
Once again this is an option which the Secretary of State can have in reserve in case of need, even if she believes that there is no possible occasion when such a need might arise, and even if she believes there is no possible occasion when some emergency might arise when the good of the country or of some particular area or potential pocket of unemployment might override the Government's philosophical view that the Bill is to be regarded as being set in concrete. She has no obligation to exercise the discretion that this clause gives her; indeed she has no obligation to do anything. But, again, if circumstances arise where it might be imperative for her to do so, she will not find herself with her hands tied, or find herself constrained by the parliamentary timetable from introducing emergency legislation.
This is an enabling provision in what is largely an enabling Bill. It in no way detracts from the initial operation of the Act in the present circumstances. However, the present circumstances are that we are at the beginning of a new recession. There is no point in entering into any recriminatory discussion about it. The fact is that what are the present circumstances may be vastly different in perhaps 12 or 24 months' time. The last thing that the Government, or indeed any of us, will want is to find small businesses going to the wall and crowds of disaffected youths findings themselves priced out of such jobs as might actually be available.
I know that the Government do not believe that such circumstances could arise, especially under their benign rule. But they must make allowances or have contingency plans for the possibility that they might be wrong, even though they have a fervent and unshakeable
Lord Clinton-Davis: I rise to speak as a member of a Government with unshakeable confidence in our own infallibility. Now I know I am infallible. I have tried to convey that to the rest of the Committee.
The circumstances in which the noble Baroness seeks to invoke this rather extreme measure are unnamed, unidentified, and not defined; and the phrase, "extreme economic circumstances", used in the new clause has no meaning. I reject the idea that it is right to assume that poverty wages might be reinstated by suspending the national minimum wage in these undefined circumstances. I cannot accept that. Nor do I think the noble Baroness was under the impression that I ever could. It is in periods of economic difficulty that poverty pay becomes even more unacceptable. We do not wish to get into the realm of discussing the power to suspend the national minimum wage, particularly in the ill-defined circumstances suggested by the noble Baroness.
Why are we seeking to acquire these powers to deal with the minimum wage? It is because exploitation has to be tackled. I believe that noble Lords on the Liberal Democrat Benches would go along with the Government in that view. It leads to a lack of motivation and a lack of involvement on the part of people who are working. All these practices are contrary to the public interest. We need to be able to encourage firms to engage on the basis of competition, higher competitiveness and higher productivity. Quality in terms of pay and conditions is extremely important in that. I do not believe in poverty wages.
I simply cannot see how acquiring this power could be in the public interest. Who would benefit from this situation? It would be the very unscrupulous employers who have motivated the actions that we seek to take. Anyway, the new clause would not work in practice. Every time an individual employer got into difficulty he would come running along to the Secretary of State asking for an order, rather than exploring ways of avoiding the crisis.
If economic circumstances were to change, the Low Pay Commission could be called to review the rate at any time. That is the very reason for the flexibility that we seek to introduce in Clauses 5 to 8. Of course, it is possible for an unexpected crisis to develop. It happened in south-east Asia very recently. But we have, I hope, developed a mechanism to try to deal with that situation. I do not believe that what is proposed in the amendment is the route we ought to be going down.
I am aware that there is a power in the Bank of England Bill to cover action in extreme economic circumstances. But that Bill deals with the macro-economy and allows the economic levers controlled by the Bank to be returned to the Treasury in certain circumstances. This Bill is not about that. This Bill is about individual rights and covers a relatively small part of the economy.
I believe that the line taken by the noble Baroness is not the right one. We cannot go down that route. If workers deserve protection, they deserve it all the time.
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