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Baroness Miller of Hendon: My Lords, I thank the noble Lord for giving way. I certainly would not dream of mentioning anything that I did not believe the noble Lord, Lord Haskel, had said. That is not the kind of thing I would do. However, I refer the Minister to col. 1277 of the Official Report, which I have already mentioned. I refer to a question from the noble Lord, Lord Waddington, at Question Time, who asked,

"Is the noble Lord saying that if an employer has to pay more in wages, he will shed labour and go for new technology, thus being able to operate with fewer employees"?--[Official Report, 18/5/98; col. 1277.]

The noble Lord, Lord Haskel, replied, again at col. 1277,

"I am afraid that that is the way of business today. Increased productivity often means more investment and fewer people".

Lord Clinton-Davis: My Lords, I do not wish to get involved in this debate because it is taking up time. My noble friend Lord Haskel replied to the question asked by the noble Lord, Lord Waddington. That is plain from what the noble Baroness has just read out.

It has been asked whether George Bain will resign. I heard him speak this morning and I did not detect a hint of any resignation being tendered. Of course he would have preferred the Government to have accepted the recommendations in full. It has also been asked why we should bother with the Low Pay Commission at all when the Government are dictated to by my right honourable friend the Chancellor of the Exchequer. I have read stories which claim that certain Members of the Government are opposed to a rate of £3.60. That is not true but that was speculated. I have read all kinds of stories. The only area of difference between the noble Lord, Lord Razzall, and myself relates to young people. I shall discuss that in a moment.

I ask the following rhetorical question. If the Government had simply set up the Low Pay Commission and then accepted all its findings in their entirety without question, I have no doubt that the noble Baroness would have asked whether the Government did not have a view of their own. Weeks ago I stated from this Dispatch Box that we value the work of the Low Pay Commission, but it is for the Government to make up their mind on the evidence. That is a perfectly feasible action on the part of the Government.

It is difficult to respond to all of the questions that have been asked. I shall try to respond to those I have not dealt with, although I have dealt with many of them.

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As regards small firms, there is no evidence at all that small firms' organisations seem to be discomfited by the evidence before us. I turn now to the points made by the noble Lord, Lord Razzall. I welcome his support. On the question of the rate, we take the view that £3.60 is a sensible rate and that it will not have an adverse effect on jobs in any significant degree. Of course, job gains and job losses occur for many reasons. I cannot reply to the question of the noble Lord on housing benefit as I do not have the figures before me. I shall try to obtain the information and write to him.

As regards young workers, the Low Pay Commission itself states that they are a separate case. The Government have always recognised this is a difficult case and a finely balanced one. The Low Pay Commission's report stated that the concentration of young people in the lowest decile of earnings might lead to the conclusion that the age of 21 or 22 would be an appropriate cut-off point. There is reflected the finely balanced nature of the argument.

I look forward to the discussions that we shall have on this report. I hope that the discussions will be sensible and based upon the real matters at stake, rather than simple Conservative Party prejudice.

Lord Shore of Stepney: My Lords, in assessing the significance of the Statement that my noble friend has repeated, I hope he can help not just myself but also the House in answering two questions. First, he mentioned the figure of 2 million low-paid employees who would benefit from the introduction of the new rate, of whom I think he said 1.4 million were women. Are these people additional to those whom we anticipate will benefit from the working families tax credit, or are they largely subsumed in that group, which, incidentally is to receive a more generous benefit than the new rate for the low paid? Secondly, in considering the relationship between the minimum wage and the working families tax credit, does not the latter have the unanswerable advantage that because the sum of money making up the pay is contributed by the state rather than by the employer there is no threat whatever to jobs?

Lord Clinton-Davis: My Lords, I am grateful to my noble friend Lord Shore. My understanding is that the figures I have quoted stand by themselves. However, I may be wrong and I shall certainly look into the matter. As regards my noble friend's second point, I consider that the issues are complementary rather than mutually exclusive. I am grateful to my noble friend for raising the issue. I shall certainly look further into it.

Lord Acton: My Lords, the noble Baroness, Lady Miller, mentioned the current American minimum wage of 5.15 dollars. Is my noble friend the Minister aware that the International Herald Tribune reported in February that President Clinton and the Democrat leadership in Congress announced that their party will run in the mid-term election in November with a plank in their platform of a 6.15 dollar minimum wage? The OECD estimates that in 1997 the purchasing power parity of the pound was almost exactly 1.50 dollars.

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Thus 6.15 dollars is approximately equivalent to £4.10. Does he not agree that the American President and his party are comfortable with a minimum wage some 50p higher than our proposed minimum wage?

Lord Clinton-Davis: My Lords, the alliance with the Clintons is a strong one. The American experience, like that of other countries, is, of course, different. This is the first time we have introduced the national minimum wage. I am sure the House will be grateful to my noble friend Lord Acton for giving us this information.

Lord Beloff: My Lords, in view of the business which has unfortunately been interrupted by this Statement, what is implied by the word "national" in national minimum wage? What is the nation to which it applies?

Lord Clinton-Davis: My Lords, if the noble Lord had paid more attention to the debate to which he has just referred he would be aware that we are talking about the United Kingdom, which includes Scotland.

Baroness Jeger: My Lords, I have two questions. First, what makes Her Majesty's Government think that younger workers are charged less for their lodgings, their food, their clothes and their fares? Is this measure not discriminating unfairly against these young workers?

Secondly, is there not a danger that unscrupulous employers will be tempted--I go no further than "tempted"--to take on school-leavers until they reach the age of 20 or 21, then get rid of the lot and start again with another batch of school-leavers? I know that there are certain protections in relation to unfair dismissal through the work of employment tribunals. I merely wish to be sure that tribunals will not be overloaded with work if the situation is abused by unscrupulous employers.

Lord Clinton-Davis: My Lords, I hope that will not be the case. Effective enforcement is important. That is a matter to which the Government will return when we have consulted and drawn up the regulations which will be laid before the House in due course. It is absolutely right to speak of effective enforcement. I do not want to help my noble friend put ideas into the minds of the unscrupulous as to how they might react to this situation. I do not in fact believe that the points she has raised will have an overriding or overall effect.

The reason for taking the steps that we have in relation to younger people is simply that, on balance, we have to operate somewhat cautiously in the first period of the national minimum wage. We do not want to deny young people an effective ability to obtain good jobs. We have other programmes in place designed to achieve precisely that. It is not a question of discrimination; it is a question of examining the evidence and balancing the situation. That we have done. A review will take place on at least a part of our proposals within a very short time.

Earl Russell: My Lords, in giving a general welcome to the Statement, for the benefit of the party physically

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on my left, will the Minister list the other major industrial countries that do not have a minimum wage? I do not believe that that will detain him until Christmas.

On the question of a lower rate for the young, is the Minister aware of the work done by the National Association of Citizens Advice Bureaux and by Shelter, arguing the grave likelihood that welfare-to-work will break down because the young cannot find affordable rented accommodation? Does he accept the general principle of equal pay for equal work? Is the Minister aware that if 16 and 17 year-olds have no entitlement to benefit, they may now be compelled to take jobs on which they cannot live? Does he believe that to be right?

Lord Clinton-Davis: My Lords, the list would be a very short one indeed. I thank the noble Earl for raising that point. There are different experiences, and some countries apply different practices for young people.

We are aware of the situation, as indeed is the Low Pay Commission, which entered a caveat. We will certainly take account of the representations referred to by the noble Earl. On the basis of present evidence, we do not share the draconian fears that he has expressed. No doubt he will wish to raise the issue in more detail later.

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