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Scotland Bill

8.24 p.m.

The Parliamentary Under-Secretary of State, Scottish Office (Lord Sewel): My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.

Moved, That the House do now again resolve itself into Committee.--(Lord Sewel.)

On Question, Motion agreed to.

House in Committee accordingly.

[The DEPUTY CHAIRMAN OF COMMITTEES (Baroness Lockwood) in the Chair.]

Schedule 5 [Reserved matters]:

Lord Mackay of Ardbrecknish moved Amendment No. 210:

Page 80, line 19, at end insert ("and the subject matter of the National Minimum Wage Act 1998").

The noble Lord said: This amendment examines Head 8 of Schedule 5 to the Scotland Bill dealing with employment. It relates to Section 1 dealing with employment and industrial relations.

The Bill as drafted reserves a number of Acts regarding employment. One is the "National Minimum Wage Act". I do not believe that it is yet an Act, since it was the Third Reading of that legislation which delayed us this afternoon. I suspect that the Government are rather looking forward when they include the National Minimum Wage Act 1998. Why should the National Minimum Wage Act be reserved? My Amendment No. 210 would devolve that legislation; it would be exempt from reservation.

It seems that we are looking at yet another example where the Government do not trust the Scottish parliament or the Scottish people. Why should the Scottish parliament not set the minimum wage level in Scotland, or even decide whether there is to be a minimum wage level at all?

In the Bill to which we gave a Third Reading earlier, the Government leave the door open for differential minimum wage rates, with the Armed Forces being treated differently and the strong prospect of a different rate for the under-25s. So the Government have clearly admitted the possibility that the minimum wage may not be uniform.

Under the Bill there is greater devolution of training matters. One wonders about the logic behind devolution being allowed for training matters and yet not allowed for the minimum wage. One wonders why the

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Government have decided to exclude it. I shall not leave the Committee wondering long before I suggest one or two clues. I wonder, for example, whether the real problem is that the Scottish Trades Union Congress will have a different view of the minimum wage from that of the their colleagues south of the Border. They may wish for a higher level of minimum wage than that with which the Government are content. I wonder whether the STUC has been consulted.

Lord Sewel: I am grateful to the noble Lord for giving way. He will be aware that much of the criticism made of a national minimum wage from the Opposition Benches both in this Chamber and in another place has been concerned with the impact of a national minimum wage on macro-economic policy. Will the noble Lord clarify whether it is the policy of his Benches to argue for macro-economic policy to be devolved?

Lord Mackay of Ardbrecknish: This is not my Bill. This is the Government's Bill. That question is not relevant to the question that I am posing as to why the matter should not be devolved. Macro-economic policy in Scotland is just as important as in the rest of the United Kingdom. I should have thought that the Scottish parliament would have a role to play--although that role has been greatly diminished by the Government's refusal to accept my view that someone nominated by the Scottish parliament should sit on the Monetary Policy Committee of the Bank of England. But perhaps that is something of an aside. I thought the Minister was about to tell me that the STUC had been consulted and that it approved of the matter not being devolved. But presumably, it has not, and does not.

We know that the Convention of Scottish Local Authorities has done a deal for its employees with a minimum wage of £4 an hour. I suspect that that is a little more generous than the Government would like to see. That has already happened in Scotland. Certainly, the employees of local government, for example in North Lanarkshire and East Ayrshire, will be very interested--although I suppose the plumber earning £54,000 a year is not too concerned about a minimum wage of £4 an hour. It is amazing that in that regard employment seems to be a matter for the Secretary of State for Scotland. I refer to employment and direct labour organisations, where he appears to have sacked some 2,000 workers, and yet the chiefs, the councillors and chief officials, go totally unscathed, including Councillor McGuigan, who sits on the Scottish Executive of the Labour Party. If we are to have a national minimum wage, is not Scotland a nation? Should we not look at the national minimum wage inside Scotland? Or is it a matter, like some others to which we shall come, such that if it might be difficult for the Labour Party branch in Scotland it must be kept here at Westminster rather than cause difficulties?

Perhaps the most interesting question is this. If noble Lords glance through the National Minimum Wage Bill 1998 to "Exception from reservation", we come across the subject matter of the Agricultural Wages (Scotland) Act 1949. It so happens that I have that Act in front of me, from Statutes in Force. It states that:

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    "There shall be a Board to be called the Scottish Agricultural Wages Board ... which shall have ... such functions with respect to the fixing of minimum rates of wages for workers employed in agriculture".

Section 3 states:

    "(1) Subject to and in accordance with the provisions of this section, the Board shall have power to make an order in accordance with the provisions of Schedule 3 to this Act--

    (a) fixing minimum rates of wages;

    (b) directing holidays to be allowed;

    (c) fixing any other terms and conditions of employment for workers employed in agriculture".

Subsection (2) states that:

    "The power of the Board to make an order under subsection (1)(a) of this section fixing minimum rates of wages is a power to make an order--

    (a) fixing minimum rates for time work;

    (b) fixing minimum rates for piece work;

    (c) fixing minimum rates for time work ...;

    (d) fixing separate minimum rates by way of pay in respect of holidays".

Clearly, as regards agricultural workers, it seems to be perfectly reasonable that their wages ought to be devolved and the minimum wage legislation contained in the 1949 Act should be devolved.

My question is: why can we not have some logic? Surely, the Agricultural Wages (Scotland) Act 1949 should not be devolved, it should be among the reservations. If it should not be there, then surely it should be in the "Exception from reservation" in the National Minimum Wage Act 1998. I beg to move.

8.30 p.m.

Lord Thomas of Gresford: The noble Lord, Lord Mackay of Ardbrecknish, has seen deep plots in the Government's failure to refer to the national minimum wage in this Bill. He seems to think that the political difficulties of the Labour Party in Scotland have caused them to exempt the National Minimum Wage Act from this legislation.

I believe that the answer is much simpler. It is that the Government have not given any thought to it. The answer that was given in another place, as I see it, is that a national minimum wage is what it says. It is legislation that must be employed all over the country, which means the United Kingdom. It says that the national minimum wage will ensure that there is a level playing field across the country--and I use a slightly worn cliche which is no doubt in the brief of the noble Lord, Lord Sewel. However, there is no level playing field at the moment. Consider Scotland and Wales; those two areas are significantly poorer in their wage levels than England. We as a party have long supported the case for regional variations and regional differences in the minimum wage that is to be employed.

The noble Lord, Lord Sewel, interrupted the noble Lord, Lord Mackay, and said that it is macroeconomic policy. That wonderful phrase can mean anything to anyone. Macroeconomic policy is the reason for this. But the Government have devolved significant economic levers to Scotland in the Bill. There are

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variables between Scotland, and England and Wales with differential rates of tax and possibilities for differential council tax. So there is already a position in Scotland where there can be quite significant differences in take-home pay.

We would like to know--and that is why we support the amendment in a probing way--whether the Government, in addition to considering differential minimum wages in the Armed Forces and for those under 25, will take into account the poorer areas of the country. Wage levels in those areas have been consistently low over many years. When I say that, I do not mean just Scotland and Wales. There are areas such as the North East where the same case can be made. I look forward to hearing the Minister's reply.

Baroness Carnegy of Lour: I support the amendment. It seems to me, as I said on the last day of Committee, that the Scottish parliament can make a difference to Scotland if it gets the economy going well in a dynamic way which brings firms into Scotland, keeps them there, and brings in people who want to work for good companies in Scotland. It means that the market operates as freely as possible. It is good to hear the Liberal Democrats supporting that and saying that pay should be different in different parts of the country according to what employers feel is right for their firm. That implies that the minimum wage should be capable of being different in Scotland.

I wonder what the Scottish Trades Union Congress thinks of the Government's policy. Surely it wants to play a strong role in working together with the Scots parliament in getting a dynamic economy going so that there are more jobs in Scotland, even perhaps a lower rate of unemployment in Scotland than south of the Border. That is part of what the Scots parliament must be about. Yet the Government are trying to put the economy of Scotland in a straitjacket to that extent. I am sure that it is a mistake. I support the amendment.

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