MINIMUM INCOME BILL (Hansard, 27 June 1973)

§ Mr. John Pardoe (Cornwall, North)

I beg to move, That leave be given to bring in a Bill to provide for the payment by employers of a minimum income. The Bill would establish a national minimum income. It is of the utmost importance in our industrial relations and in our war on poverty. In short, I seek to bring in positive discrimination in favour of the lower paid. The evidence of the post-war period shows that nothing less will do.

Why is minimum earnings legislation necessary? Simply because nothing else has worked. Statistics give a picture of the extent of low pay and show it for nothing less than a national scandal.

I define minimum earnings as two-thirds of average industrial earnings. On present figures that would be approximately £24 a week. The latest survey figures are for April 1972 when the minimum would have been about £22 a week.

1537 In April 1972, 1,100,000 men aged 21 and over were earning less than that amount. Excluding overtime, the number rises to 2,100,000. Excluding overtime, 25 per cent. of adult male manual workers had weekly earnings below £22 a week in that month.

I have not included statistics for women, not because they are not important, but because the equivalent statistics are for women above 18 years of age, and they are not directly comparable, and because equal pay is not yet with us. When it is, the same formula for minimum earnings which I am proposing in the Bill must apply equally to men and women.

The low paid, despite efforts by all parties to help them, are with us still in considerable numbers. Who are the low-paid? Generally speaking, they are people disadvantaged in the labour market because of the areas in which they live, by discrimination on grounds of sex or race, because of weak or non-existent trade union organisation, because of lack of relevant skills, defects in work organisation and wage structures, age and disability and job insecurity and unemployment. It would be foolish to suggest that all these causes could be tackled in the same way.

For example, those disadvantaged by the areas in which they live can be helped by regional policy, but let us not close our eyes to the limits of success even in this respect. Regional differences in earnings are considerable. In April 1972 full-time manual male workers aged 21 and over in the Coventry belt sub-region of the West Midlands had average weekly earnings of £39.50 per week, while in the western sub-division of the South-West region, covering most of Cornwall and North Devon, and the Borders sub-division of Scotland they had just over £27 a week. That is a difference of £12.50 or 46 per cent.

Even more scandalous is the difference between the public and private sectors. In April 1972, more than 21 per cent. of full-time adult male manual employees of the national Government were earning below £22 a week. In local government employment it was 29.4 per cent. In other words, the Government, both cent- 1538 ral and local, are among the worst employers in the country. Governments of all shades could have acted direct upon this problem, but they have failed to do so.

In my view, the reason for the continuing existence of the low paid is basically the same everywhere; it is the worship of the sacred cow of collective bargaining. Indeed, the Labour Government in their 1969 White Paper "Productivity, Prices and Incomes Policy after 1969" admitted as such. They said: One of the weaknesses of the system of free collective bargaining has been its inability to solve the problem of the low paid", and amen to that. Collective bargaining has been a total failure in dealing with the low paid because collective bargaining is about power and not about social justice, and those who bargain are more concerned with the merits of power than with equality or fairness.

There is, in our view, a need to legislate for national minimum earnings now. Social security, FIS, family allowances—and tax credits if we get them—all play their part, but there is no substitute for a firm bottom to the wage packet, and that is essential to the Government if phase3 is to have any chance of success at all, because rising prices affect the low paid much more harshly than they affect the high paid. A standstill on wages while prices rise—and that is happening now—may be inconvenient for the man on £35 a week, but for the man on £20 a week it is nothing less than a disaster. No wonder our poor workers get militant!

My Bill seeks to set a safety net below which no one may be allowed to fall. It provides for methods of calculating the minimum. It provides for lower minimum rates for those below the age of 23, as in Holland. It provides for a transitional period during which the minimum shall be accomplished, and we estimate the cost as approximately 2 per cent. of the nation's wage bill. We believe that that is manageable and necessary.

No Government in my lifetime have had a policy for income distribution. The epitaph on the Labour Government's record in this respect is perhaps best contained in the Fabian Publication "Labour and Inequality". John Hughes, Vice-Principal of Ruskin College and 1539 Director of the Trade Union Research Unit, summed it up when he said: We cannot find any important examples of relative improvement in the lot of the low-paid worker during the years of the Labour Government. The present Government have done no better. The Liberals believe in liberty and equality, and we know that we cannot make the first a reality in a society as unequal as ours is today. It is in that spirit that I seek leave to bring in the Bill.