HC Deb 22 July 1966 vol 732 cc1168-80

Motion made, and Question proposed, That this House do now adjourn. [Mr. McCann.]

4.10 p.m.

Mr. Christopher Norwood (Norwich, South)

I intend to raise in what must be a very short space of time a subject which is not the less important because we debate it in this fashion. It is the position which is enjoyed—though perhaps" not enjoyed" would be more appropriate—by the large number of people who can be described as lowly paid workers.

In many occupations there are rates of pay which are negotiated nationally, and in many cases negotiated, if that is the correct word, under what is broadly called statutory procedure. These rates, and typically the rates of the wages councils concerned, are unrealistically low in my view.

I would like to give a few instances, so that it may be generally understood how important the problem is, and I am indebted for these figures to the House of Commons Library research facilities.

I find that in the regulation order referring to the wages council for the fur trade, an adult man is given a legal minimum of £7 17s. a week. In button manufacturing, he is paid £8 8s. a week. In the making of coffin furniture he is paid £8 1 1 s. 6d. a week. In cotton waste reclamation, he is paid £8 14s. 3d. a week. There are a number of other instances similar to those, and it would be only fair to point out that in industrial staff canteen undertakings, £9 1s. 6d. is the basic rate for a man, and that in licensed non-residential establishments, which means public houses and clubs for all practical purposes, the rate is £9 7s. In one of the retail trades, newsagents, tobacconists and confectioners, the rate is £8 12s.

In all the ten lowest-paid trades covered by wages councils, I think that I am right in saying that nowhere is there a basic male adult wage in excess of £9 a week.

I am concentrating on male employment. There is a wages council rate in respect of women employed in lace finishing which reduces the argument for wages councils to its essentials. The rate is 105s. a week for 45 hours work. That was the correct figure on 1st April of this year, and it will not have increased substantially since then. Other women's rates in the £6 range, by and large, indicate the level of incomes which this procedure offers to people in the various occupations covered by it.

The criticism is not specifically of wages council arrangements. The same criticism can be levelled again a substantial number of genuinely negotiated arrangements such as those under the J.I.C. procedure or those cases where there is a genuine voluntary negotiating procedure entered into freely between trade unions and the applicable employers' organisations. It is true, however, that in the case of a nationwide voluntary agreement, generally speaking the basic minimum rates are higher.

It is also legitimate to make the point that in many parts of the country—in the Midlands, in the prosperous parts of the North, and certainly in London—these rates are of no consequence. For all practical purposes, they might as well not exist. No employer can obtain labour, not even female labour, at anywhere near the rates laid down under either this basic minimum in the statutory procedure, or at this higher level minimum nationally negotiated rate.

I have read somewhere—I must go back two or three years for these statistics for there do not appear to be more recent ones—that in 1962, in the engineering industry, in which national minimum rates are treated with more contempt than in most, and I think that this is accepted, about 6 per cent. of the employees in the industry were earning the nationally negotiated minimum rate. Broadly, we take it that in Coventry, or Birmingham, the rates negotiated by the Confederation under the York Agreement, or anything else, are completely without relevance to the wages which will be received by the men working in car factories or engineering in general.

But if there is a minimum rate in certain trades, one is bound to have some people whose wages will be based on it. It is nor, purely a question of what hap- pens in Birmingham, Manchester, or London. It is also a question of what happens in other parts of the country, and what happens there is that substantial numbers of people, far beyond the 6 per cent. mentioned for the engineering industry in the country as a whole, are paid rates comparable to those which are the basic national minimum negotiated rate. Indeed, as a result of Ministry of Labour surveys and inquiries, we have found a small percentage of cases—about onethirtieth—in which people are being paid less than the statutory minimum. In many of these trades this is fantastic, but apparently these cases occur.

The problem exists particularly in parts of the country which have a tradition of low wage rates and higher than average unemployment, although low wage rates are not always correlated with a level of unemployment rather higher than the national average.

I come now to the position which exists to some extent in Norfolk. Norwich, possibly because it is the capital of the East Anglian region, is less affected by this, but even so a substantial number of people who work 41, 42, and sometimes more hours a week, with little opportunity of overtime, or bonuses, or special arrangements, still receive less by way of wages than they would receive as a family institution if they did not work at all.

It is not surprising that this causes a great deal of friction, particularly in the older estate areas of the city. Several times I have been approached by people living on our older housing estates. In my view, quite rationally, they object to the fact that people on National Assistance are better off than they are as a result of going to work. I do not criticise the National Assistance arrangements. Indeed, it is not for my hon. Friend to reply to this because it is not her Department's responsibility, but I observe that this happens in a significant number of cases, and it has a number of effects. It occurs—and we come back to this point endlesly when we consider social legislation—not always with a young and strong man who can change his job.

It occurs all too often in the case of a man who is marginally unemployable or elderly, or tied to local authority or pension arrangements inside his own company, even though his pension may often be pathetically small. Such a man retains his pride, in the sense of wanting to go to work, but he is still deeply conscious, if he has children, and particularly if he is in his late forties or fifties that he would be better off on National Assistance.

Let us compare the rates that I have referred to. According to the figures I have obtained from the Library a woman working in the lace trade will receive £5 16s. a week with a rent of 40s. a week on National Assistance. A man in his forties —with two children—would receive £10 1 ls. 6d., and in the case of people who have several children the argument begins to get almost ludicrous. The gaps become enormous. With four children, three between the ages of five and 10 years and one between the ages of 11 and 16 years, a man will receive from the National Assistance Board, under normal circumstances, no less than £12 12s. a week, on top of which he will have his family allowances. This is vastly in excess of the amount of money he is likely to earn as a retail shop assistant in a low-pay part of the country. The gap depends upon the number of children, and upon the trade concerned.

A further and unfortunate subsidiary effect is that once it becomes generally known by the National Assistance Board that the general level of earnings in an area tied to these national rates is so low it applies the wages stop, so that people, employed or unemployed, cannot win. The wages stop is affected by the general level of local earnings, and it is an open secret that the wages stop in the Midlands and the wages stop in Norfolk are two entirely separate and disparate figures. It is not the job of the Minister to answer the point about the operation of the wages stop ; I merely observe that the operation of this national negotiating machinery has the same consequences in any case.

Although I have had to deal very sketchily with this point, and that there is a great deal more than I would like to say about it—because I have strong views on the matter—I can nevertheless bring to mind two basic points as a result of these considerations. I hope that having set them out in this way in the House the Minister will agree that they have been clearly put. The first question is a major one, to which I cannot expect an answer in a debate of this kind. I must ask whether national negotiations of one kind and another confer effective benefits upon the people who are supposed to be protected. In some cases they may. In the major industries, where negotiations take place between an individual union and an individual firm, one might be satisfied that they generally do. Where we have negotiations that cover—as the engineering negotiations do—approximately 3 million people at one stage in the proceedings, however, we must question that fact.

If one goes further one is inclined to wonder what benefit the existence of the Retail Wages Council procedure confers on people in retail employment. In London it is a matter of gross irrelevance, since people will not be employed at that figure, and in some cases outside London people are handicapped because the rates of pay may be misrepresented—as they frequently are by uncharitable employers —as being union rates.

The wages council machinery has a long and ancient history, going back to the days before the First World War. In this time it has performed a useful function. This is too broad a question for the Minister to answer fully today, but it is one in respect of which some of us should ask ourselves questions and think about a great deal more.

If we are to have a successful incomes policy—and again this is slightly outside the scope of the Minister's reply—one of its major justifications must be the fact that it will lead not only to a fairer distribution between those who take their incomes out of capital or rent and those who take their incomes out of their earnings whatever type of earnings they may have ; it also ought to mean a certain parity of esteem between people in different employment. The extent of organisation and the fact that some people have physical and union strength which they can use and others do not does not seem to be fair substitute for a rational policy.

If it is possible to make some advance in the conditions of living of the vast number of people whom I know in Norwich—I am sure that their circumstances are duplicated a thousand times over and more in the country—who work for earnings which are derisory by any reckoning, if an incomes policy could promise them, even in the long term, a better deal, it would have a great deal better chance of acceptance and understanding in the movement of which I am happy to be a part.

4.26 p.m.

Mr. Nicholas Ridley (Cirencester and Tewkesbury)

I am grateful to the hon. Member for Norwich, South (Mr. Norwood) and to the hon. Lady the Joint Parliamentary Secretary for allowing me to intervene briefly in the debate. I should like to congratulate the hon. Gentleman on raising a subject of great importance, about which many of my hon. Friends are greatly concerned.

It was a central theme of our social policy that this problem should be looked at and dealt with by the Government because of its ridiculous and unfortunate effects. It is clearly ridiculous that many people in full employment should be on rates of pay which are at or below the rates of National Assistance or the rates of unemployment pay. This position will now be aggravated by the increase in unemployment benefit in September, which will put hundreds of thousands more people below the level of income they would receive if they were unemployed. This is, clearly, a situation which no one likes.

In addition to the wages council trades which the hon. Gentleman mentioned, I would draw the hon. Lady's attention to the industrial civil servants. The recent report of the Prices and Incomes Board on their pay and conditions of work draws attention to a sector where the Government themselves are the employer and where very low wages are paid. The minimum, I know, is over £10, but this is a field where action could be taken by the Government, in the interests not only of humanity, but of setting an example of what can be done.

This is an industrial sector where it is possible to increase productivity. The report draws attention to over-manning and the low productivity of these workers. If their numbers could be reduced by proper work study and management techniques, there is no doubt that the Government could increase their wages and at the same time hold within reason the total bill for the operations they perform. This is an example within the Government's own responsibility. I hope that the hon. Lady will urge her colleagues in the Government to take action on this report.

Hardship is particularly severe where there is a large number of children in these low-earning families. A man and his wife who have no children or whose children have left home can manage, although badly, on these low wages. But where there are several children in the family, the hardship is taken out on them. We are all aware of the problem of these children who are not properly fed or clothed, perhaps, because of the very low wages which their fathers earn. This is probably a more soluble part of the problem than the general question of low earnings.

I hope that the hon. Lady will tell us whether she has anything in mind for some form of selective family allowances or some direction by which the National Asssistance Board can pay special regard to low-earning families with more than an average number of children. This is the crisis area, and the problems of this area in my opinion should be solved by immediate action. The rest of the problem depends upon national considerations of production and pay policy which are outside the scope of the debate. But I hope that the hon. Lady will say something on those two points which will give hope to the families which are in these very important income brackets about which we all feel great concern.

4.30 p.m.

The Parliamentary Secretary to the Ministry of Labour (Mrs. Shirley Williams)

In the few moments left I will deal briefly with some of the points made by my hon. Friend the Member for Norwich, South (Mr. Norwood). I congratulate him on bringing the subject before the House. I know that he is very concerned about it and that he represents an area in which it is a serious problem.

First, I will deal with the question of wages councils. The Committee on Wages Councils, at the Trades Union Congress in 1962, reported its general view that the abolition of wages councils should be sought only where the area of voluntary bargaining and the level of trade union membership was sufficient to ensure that voluntary negotiation machinery could be effectively substituted. It is the T.U.C. view that wages councils fill a need.

Five of these councils have been abolished since 1960 with the agreement of the trade unions concerned that adequate voluntary machinery had been established. If we look more closely at the wages councils we see how very tightly the conditions and the Minister's powers are drawn. The only power which the Minister has is the power to delay. He has no power to amend or to change or to increase or to reduce the recommendations of wages councils.

There is only one case in which a detail has been discussed with a wages council since 1964. Previously, the views of a number of wages councils were referred back, although in all cases except one those referred back under previous Governments were sent back again without any change. I have to admit that one of the difficulties of the wages council machinery is that it is drawn so tightly.

My hon. Friend referred to the Lace Council. He may be relieved to know that since 1959 the council has not met, the reason being that the trade union involved in the industry has not requested that it should meet. Consequently, we have the impression that voluntary agreements have been made in the industry. During the period up to the present time it has been the practice in the Ministry of Labour, as I said in reply to Questions last Monday week, to allow increases above the norm to go through from wages councils because of the condition in the incomes policy about the position of lowly paid employees. None of this is to say that this is good enough, and I am not pretending that it is. I am pointing out the special difficulties which my hon. Friend raised.

One moves to the question of where poverty is greatest. There is no doubt that it is very great among that proportion of the community which earns less than the National Assistance Board rates, and after the debate I will give my hon. Friend a careful breakdown of those involved. To the best of our knowledge there are about 12.6 per cent. of adult males at present earning less than £13 a week. This is quite a sharp drop from the position in the previous year. In 1962, 6½ per cent. of men in full-time employment earned less than £10 a week and that figure has dropped to 1.3 per cent. Even allowing for some increase in prices, the increase is very much more than proportional in the lower-wage group generally.

The problem is serious for the full-time male workers I have already referred to, earning less than N.A.B. rates. Secondly, it is very serious among women heads of households, and over half of all women were earning less than £10 a week. Finally, it is serious among those with large families, to whom the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) referred. To the best of my knowledge—and the figures are those of my right hon. Friend the Minister of Pensions and National Insurance—there are estimated to be between 200,000 and 300,000 families whose incomes are below National Assistance Board rates. That is either for reasons of wage stop or because they are employed on less than they would get if they went on National Assistance. My hon. Friend has certainly pointed to a serious position here.

The question is how to meet the problem. There are two possibilities. The first possibility is a national minimum wage. Speaking for myself, I am very attracted to this solution. It applies in certain other countries. I emphasise that I am speaking strictly for myself. It is a view that I have always taken. Difficulty arises that the minimum established has to be fairly high to take in the large family, probably too high to make it financially practicable, at least in the foreseeable future. The alternative is to set a minimum wage which is acceptable from this point of view.

Mr. Speaker

Order. The hon. Lady must address the Chair. Otherwise the reporters will not hear.

Sir Keith Joseph (Leeds, North-East)

We all want to solve this problem. Might I just ask the hon. Lady two things? Will she send us or put in HANSARD the information that she has promised to send to her hon. Friend? Also, in discussing a minimum wage, has she in mind the impact on differentials?

Mrs. Williams

What I was referring to in terms of figures was the family expenditure survey. We shall be pleased to make it available. I shall come to the last point if I have time. I should like briefly to deal with the two other points.

There is the point about the large family and the minimum that they should have in order to make ends meet. The difficulty is as to where one sets the line. There is the difficulty that almost anywhere that one sets the line will not take account of the family with more than three dependants. So one almost certainly has to meet the problem by looking at the whole position of more substantial family allowances.

I think my hon. Friend will appreciate why I cannot trespass this afternoon on the field of family allowances, but he will be aware that the Minister of Pensions and National Insurance is looking very closely into this and into the question of how far the position of families in poverty can be met.

With regard to the point made by my hon. Friend about national wage and local wage agreements, over the last six years there has been an average increase of about 6 per cent. a year in wages, of which 4.7 per cent. has followed from national agreements and the balance of 1.3 per cent. from local wage agreements. So one has to see this in perspective. Although I agree with what my hon. Friend has said about particular groups, generally speaking the national agreement accounts for the major proportion of wage increases.

As to industrial civil servants, my hon. Friend will be aware that this is rather a lowly-paid group. It has been discussed by the Prices and Incomes Board, and its findings are before the Government and the Government are considering the steps that they should take. I regret not being able to reply more fully, but the debate has left me very little time in which to conclude.

I conclude by saying that I share absolutely the view of my hon. Friend that we must take action about this. The pattern as between low paid and more highly paid workers has not changed greatly over recent years or indeed for a very long time. We shall have to see how we can build into the position greater assistance for those who by reason of bargaining strength do not get an adequate share of the national income.

Mr. Norwood

rose—

Sir K. Joseph

Would the hon. Lady—

Mrs. Williams

I gave way to my hon. Friend the Member for Norwich, South.

Sir K. Joseph

It was not a giving way. There was no request from the hon. Member for Norwich, South.

Mr. Speaker

To whom did the hon. Lady give way?

Mrs. Williams

To my hon. Friend the Member for Norwich, South.

Mr. Speaker

Mr. Norwood.

Mr. Norwood

I should just like to ask my hon. Friend a question. As we are in the difficult position that we shall be imposing a tax on the employers of these people—in other words, we are going to raise the cost to the employers in regard to these people—it seems to me—

Mr. Speaker

The hon. Member cannot make a second speech. It must be a brief intervention.

Mr. Norwood

I am too long-winded, Mr. Speaker. I will complete the point quickly. As it will cost the employer 25s. more to employ an individual, surely there is some case—I know that the powers of the Minister are limited—for raising the National Assistance rates by a similar amount.

Mrs. Williams

If my hon. Friend is thinking largely of the wages council trades, most of these will be in the premium category. I cannot give the figure this afternoon, but my understanding is that the bulk come in the premium or refund category. There are virtually no service industries covered by the Wages Council arrangements.

Sir K. Joseph

We on this side are very glad that the Government are undertaking to bring about a prompt solution to this important and urgent problem of the low-paid households. I would put it to the hon. Lady that most of the men concerned are employed in the sort of jobs where there is no overtime and no bonus. Many of them are in public employment, working for local authorities or nationalised industries. There is always the danger that when the pay is raised the job itself becomes abolished as a result of mechanisation. I realise that this is a complicated matter, but since low household income is in the closest relationship with respect to the bad bringing up of children and to the degradation of extreme poverty, and as it is inevitably associated with some—

The Question having been proposed after Four o'clock and the debate having continued for half an hour, Mr. SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at twenty minutes to Five o'clock.