§ Mr. John Townend (Bridlington)I beg to move,
That leave be given to bring in a Bill to amend the law relating to Wages Councils.Wages councils were founded in the 1920s to protect workers in manufacturing industries from sweat shop conditions, where organisation was difficult due to fragmentation. Like so many quangos, they have grown over the years. Their character has changed, and the majority of workers now covered by them are not in manufacturing industries but in shops, public houses and hotels.I shall be quite frank. I want to see all wages councils abolished. However I know that some hon. Members would not go as far as that immediately. My Bill would severely amend and restrict wages councils. I hope that once that has been achieved without problems, it may be possible to persuade the House to abolish them altogether.
My criticisms of wages councils are sixfold, and are based largely on my personal experience in business. First, they are contrary to the Government's express policy that wages should be based on an employer's ability to pay. Because wage rates in wages council industries are settled nationally, they do not take account of the individual employer's ability to pay. Secondly, they create unemployment. If increased rates cause an employer to close his firm and to declare his employees redundant, so be it. Even if workers offer to forgo increases to safeguard their jobs—as has happened in many manufacturing industries during the past years—the law does not allow them to do so. That has resulted in thousands of jobs being lost in businesses that could not afford increased rates.
Originally, regional wages councils' rates were very low, and were paid by only a minority of employers—all good employers paid well above those rates. But in recent years, due to the large increases, wages councils' rates are now paid not by the minority but by the majority.
My third criticism is that these bodies bear down particularly heavily on young people. In recent years they have increased percentage rates for young people. They have narrowed the differentials between young and adult workers and they have reduced the starting age at which adult rates are paid. In April this year, in my own trade, a 19-year-old shop assistant will be paid £57 per week. In other retail trades the figure is £59 per week. That may be all right in the West End of London for a smart, intelligent, well-motivated youngster, but those rates apply equally in Hull and Liverpool, and they apply to the not very well-motivated, not very intelligent youngster as well. In practice, this simply means that there will be no jobs for that type of person.
I received a poignant and tragic letter this week from a parent writing about his son, who was made redundant after working for a firm for two and a half years. That parent said:
It seems ludicrous to me that as my son was prepared to remain at his firm on the same wage before the Wages Council awarded under 21s an additional £10 a week, that I was not able to negotiate with his employers who were forced into reorganisation as a result of the award.The employer was sorry to see my son go and what amazes me is the lack of intelligence of the Wages Council … who in my opinion should have realised that in view of the economic climate this was the wrong year to press employers to pay more wages to such employees who were quite content to have a job at the wage offered, for the time being at least.150As a result, my son just cannot find employment in Hull.Is that not a tragic letter?I therefore say to the House that any form of minimum wage reduces the job opportunities for the least able and for the ethnic minorities.
My fourth criticism is that the wages councils are bureaucratic and bear down heavily on small businesses. Although there are independent members holding the balance between trade union representatives and employer representatives, they are academics who have little or no experience of small business and little or no knowledge of small business men. Small business men themselves do not believe that their own representatives are much help, and rarely contact them. Most of the employer representatives are from large firms which themselves are often unionised and have a vested interest in forcing up the wage rates of their small competitors.
When such an employer receives a notice from the wages council he looks upon it as a notice from the Government, and in difficult trading times he sees no alternative but to declare one more of his employees redundant.
I cite just two examples of bureaucracy. One involves an employee who worked a five-day week. This lady had difficulty in getting her hair done on a Saturday, so she asked her employer whether she could work Saturday morning and have Friday afternoon off. This was mutually agreed. When the wage inspector came round, the employer was in great trouble for not having paid her five and a half days' pay because she was entitled to double time on a Saturday.
Another example was a woman with children at school. She was working 40 hours. She wanted to spend a little more time with her children, so she asked her employer whether she could work 36 hours. He agreed and paid her the hourly rate for the 36 hours, which was readily accepted. When the inspector came round, that employer, too, was in trouble, because the regulations stated that a person working 36 hours or more must be paid for a minimum of 40 hours.
My fifth complaint is that the councils have been inflationary. In recent years, their awards have been at a higher rate than inflation generally. Moreover, in far too many cases there has been more than one award in 12 months. If one includes the cost of additional holiday pay, shorter hours and the lower age limit for adult rates, the increase to employers has been way above the rate of inflation.
My last criticism is that these bodies are out of control. Even when the Labour Government had their 5 per cent. wage policy the wages councils took no notice whatever of that recommendation. Equally today, they seem to be taking very little notice of the Government's 6 per cent. cash limit for pay in the public sector or their policy that increases should be related to ability to pay.
Over the past 20 years, far from protecting employees, the wages councils have in many ways been actually harmful. I submit that they have largely outlived their usefulness.
The Bill would make the following changes. It would take out of the wages council area part-time workers and workers under the age of 21. In service industries where there are large numbers of small businesses the councils would be converted into statutory joint industrial councils without enforcement powers. Wage increases would be 151 restricted to no more than one in 12 months. There would also be a reduction in and, one hopes, the abolition of many of the bureaucratic rules and regulations.
I seek the support of both sides of the House for the Bill. I ask for support from the Opposition because of their well-known wish to increase job opportunities for young people and in particular for the less able and for the ethnic minorities. In addition, I suggest to my right hon. and hon. Friends that they should support the Bill because of their opposition to quangos and bureaucracy and their policy of reducing the burden on small businesses. On that score, I would expect also to have the support of hon. Members on the Liberal Bench, which unfortunately appears to be empty.
Without wages councils, we might well have had today a further 50,000 or 100,000 jobs in the retail, catering and hotel industries. Surely at a time when unemployment is tragically high our first priority should be to have more jobs, even low-paid jobs, rather than no jobs at all.
§ Mr. Bruce George (Walsall, South)I rise to oppose this mischievous and dangerous Bill, which seeks so to emasculate wages councils as to render them superfluous. I doubt whether many Opposition Members will go into the Lobby with the hon. Member for Bridlington (Mr. Townend). I hope very much that Conservative Members will also try to weigh the facts objectively. The case presented by the hon. Gentleman closely resembled that of the National Federation of Self Employed Limited. It was a classic case of not letting facts come anywhere near contact with the polemic to which we were subjected.
The hon. Gentleman's remarks may persuade Conservative Members to support the Bill, but I believe that if wages councils are abolished or emasculated this will eliminate the protection given to a grossly exploited sector of our population. Those who would support that perhaps wish to recreate the idyllic world when wages were set exclusively by market forces, as though we had passed from the 1880s to the 1980s without the intervening period of civilisation and social legislation.
The hon. Gentleman's speech was a mass of inaccuracies, prejudices and distortions, based upon unfounded assertions. No doubt there will be some who will wish to ingratiate themselves with small employers by voting for the Bill, but that will hardly recompense the small employers for the great damage inflicted upon their industry by "their" own Government.
If one is looking for a scapegoat for the ills affecting small businesses, I suggest that it is pretty stupid to look at those earning less than £55 per week. That is the situation that any statistics will reveal. The wages enjoyed—or experienced—in wages council industries in most cases are below £55 per week. So who are these bloated new members of the working-class aristocracy? Where are the overpaid booksellers and the overpaid workers in the service industries? I went to a restaurant today where the price of the caviar, which I did not have, was £33. In other words, the price of the hors d'oeuvre was almost equal to the weekly wage enjoyed by people in these industries.
Many of the claims that we have heard, therefore, do not stand up to close scrutiny. We have heard about large pay increases awarded by wages councils allegedly destroying thousands of jobs. Yet the highest minimum rate set by a wages council is £57.60. That is about half 152 the average wage in this country and about £10 below the statutory poverty line. Those are the people about whom we are talking, yet it is suggested that they help to destroy industry.
About 3 million people are covered by wages councils. The minimum level at which some of them are 'protected' is £36 a week. Can any hon. Member imagine someone working for £36 a week? By doing so such a person is earning his poverty.
We are told that minimum wages discriminate against ethnic minorities and other disadvantaged groups. If these present statutory protections are withdrawn, these people will be thrown to the wolves. The argument that these people will be protected by this measure is absolute balderdash. These vulnerable groups must be protected, not by abolishing wages councils but by strengthening them.
A report of the National Federation of Self Employed Limited says:
It is quite probable that many of those in unemployment queues would readily accept less than the minimum wage.However, the minimum wage is already a starvation wage. While the work ethic is strong in this country, can we really expect people to work for lower than the miserly level which wages councils have fixed for nearly 3 million people?We are told that wages councils have narrowed the differential between young and old workers. The hon. Gentleman gave some statistics. However, a 16-year-old working in non-food shops can get £33.55 a week. Is that being overpaid?
We are told that wages councils are over-bureaucratic. The truth is that they have 270 employees serving virtually 3 million people and nearly 400,000 establishments. That is hardly an excess of bureaucracy. The wages councils have only 270 employees as opposed to the 4,500 social security fraud inspectors, whose numbers are going up. Yet the Government have proposed a decimation of the already depleted ranks of the wages councils inspectors, which will make it even easier for people to avoid paying the minimum rate.
Are these inspectors jackbooted, Gestapo-like officers who terrorise the honest employer? The chances of being inspected are slight. Even if one has been found to underpay, the chances of prosecution are minimal. There are about a dozen prosecutions a year—hardly terrorist tactics, though underpayment is endemic.
We are told that the council members contain too many academics. The hon. Gentleman seems to want a group of small business men whose vested interest will be not to elevate wages but to depress them. I compliment those academics who have been disparagingly referred to but who sit and engage in some kind of arbitration process.
The Bill proposes to abolish any restraints for those under 21 and for part-time workers, a large number of whom are presently covered by wages councils. The suggestion that if controls are removed from part-time workers it will somehow improve employment is a fallacy and nonsense. The Royal Commission on the Distribution of Wealth said that there would be an enormous increase in the number of people in poverty if restraints were removed from them. As for removing wages councils and replacing them with some kind of non-statutory, toothless body, that would be an absolute disaster.
Wages councils are a protection for the low-paid. If any Bill is to be passed by this House, I hope that it will be 153 a Bill to strengthen the wages council system and not to abolish them. The callousness of these proposals are breathtaking. We must protect the vulnerable and generally unorganised section of the work force. Wages councils cannot by themselves solve the problems of low pay. Those problems are a source of inefficiency in industry and social disharmony. There are many things which this House can do for the low-paid. I suggest that the first is to throw out this squalid little Bill.
§ Question put, pursuant to Standing Order No. 13 (Motions for leave to bring in Bills and nomination of Select Committees at commencement of public business):—
§ The House divided: Ayes 115, Noes 194.
155| Division No. 72] | [4.34 pm |
| AYES | |
| Adley, Robert | Kitson, SirTimothy |
| Amery, RtHon Julian | Knight, MrsJill |
| Atkins, Robert (PrestonN) | Lang, Ian |
| Atkinson, David (B'm'th,E) | Lawrence, Ivan |
| Baker, Nicholas (N Dorset) | Lloyd, Peter (Fareham) |
| Banks, Robert | Lyell, Nicholas |
| Beaumont-Dark, Anthony | MacKay, John (Argyll) |
| Bell, SirRonald | McNair-Wilson,M. (N'bury) |
| Bevan, David Gilroy | McQuarrie, Albert |
| Biggs-Davison, John | Marland, Paul |
| Blackburn, John | Marlow,Tony |
| Body, Richard | Mates, Michael |
| Bonsor, SirNicholas | Maude, RtHon Sir Angus |
| Bowden, Andrew | Mawhinney, DrBrian |
| Braine, SirBernard | Maxwell-Hyslop, Robin |
| Bright, Graham | Mills, lain (Meriden) |
| Brinton, Tim | Molyneaux,James |
| Brotherton, Michael | Montgomery, Fergus |
| Brown, M. (BriggandScun) | Morrison, HonC. (Devizes) |
| Browne, John (Winchester) | Myles, David |
| Buck, Antony | Neubert, Michael |
| Budgen, Nick | Page, John (Harrow, West) |
| Carlisle, John (Luton West) | Page, Rt Hon Sir G. (Crosby) |
| Chapman, Sydney | Pawsey, James |
| Clark, Hon A. (Plym'th,S'n) | Pollock, Alexander |
| Clark, Sir W. (CroydonS) | Powell, Rt Hon J.E. (SDown) |
| Cockeram, Eric | Price, Sir David (Eastleigh) |
| Colvin, Michael | Proctor, K. Harvey |
| Corrie, John | Rathbone, Tim |
| Cranborne, Viscount | Ross, Wm. (Londonderry) |
| Dover, Denshore | Shaw, Michael (Scarborouh) |
| du Cann, RtHon Edward | Shelton, William (Streatham) |
| Dunlop, John | Shepherd, Richard |
| Dunn, Robert (Dartford) | Shersby, Michael |
| Durant, Tony | Smith, Dudley |
| Emery, Peter | Spence, John |
| Fell, Anthony | Spicer, Jim (WestDorset) |
| Fenner, Mrs Peggy | Sproat, lain |
| Fisher, SirNigel | Stainton, Keith |
| Fookes, Miss Janet | Stanbrook, lvor |
| Fox, Marcus | Stewart, A. (ERenfrewshire) |
| Fraser, RtHon Sir Hugh | Stokes, John |
| Gardiner, George(Reigate) | Taylor, Robert (CroydonNW) |
| Gow, Ian | Thome, Neil (llfordSouth) |
| Griffiths, E.(B'ySt.Edm'ds) | Thornton, Malcolm |
| Grylls, Michael | Townend, John (Bridlington) |
| Hamilton, Michael (Salisbury) | Viggers, Peter |
| Henderson, Barry | Walker-Smith, Rt Hon Sir D. |
| Higgins, Rt Hon Terence L. | Wall, Patrick |
| Hill, James | Waller, Gary |
| Holland, Philip (Carlton) | Walters, Dennis |
| Hordern, Peter | Ward, John |
| Hunt, David (Wirral) | Warren, Kenneth |
| Jessel, Toby | Wells, Bowen |
| Kellett-Bowman, MrsElaine | Wheeler, John |
| Kershaw, Sir Anthony | Whitney, Raymond |
| Wilkinson, John | Mr. Richard Alexander and |
| Mr. Christopher Murphy. | |
| Tellers for the Ayes: | |
| NOES | |
| Adams, Allen | Gourlay, Harry |
| Allaun, Frank | Graham, Ted |
| Alton, David | Grant, John (Islington C) |
| Anderson, Donald | Grimond, Rt Hon J. |
| Archer, Rt Hon Peter | Hamilton, James (Bothwell) |
| Armstrong, Rt Hon Ernest | Hamilton, W.W. (C'tral Fife) |
| Ashley, Rt Hon Jack | Hardy, Peter |
| Atkinson, N.(H'gey,) | Harrison, RtHonWalter |
| Bagier, Gordon A.T. | Haynes, Frank |
| Barnett, Guy (Greenwich) | Heffer, EricS. |
| Barnett, RtHon Joel (H'wd) | Hogg, N. (EDunb't'nshire) |
| Beith, A. J. | Holland,S.(L'b'th,Vauxh'll) |
| Benn, RtHon A. Wedgwood | HomeRobertson, John |
| Bidwell, Sydney | Homewood, William |
| Booth, RtHonAlbert | Hooley, Frank |
| Boothroyd, MissBetty | Howell, Rt Hon D. |
| Bradley, Tom | Huckfield, Les |
| Bray, Dr Jeremy | Hughes, Mark(Durham) |
| Brown, Hugh D.(Provan) | Hughes, Robert (AberdeenN) |
| Brown, R. C. (N'castle W) | Hughes, Roy (Newport) |
| Brown, Ron (E'burgh,Leith) | Jay, Rt Hon Douglas |
| Buchan, Norman | Johnston, Russell (Inverness) |
| Callaghan,Jim (Midd't'n&P) | Jones, Barry (EastFlint) |
| Campbell, Ian | Jones, Dan (Burnley) |
| Campbell-Savours, Dale | Kaufman, Rt Hon Gerald |
| Canavan, Dennis | Kerr, Russell |
| Cant, R. B. | Kilfedder, JamesA. |
| Carmichael, Neil | Kilroy-Silk, Robert |
| Carter-Jones, Lewis | Kinnock, Neil |
| Cartwright, John | Lambie, David |
| Clark, Dr David (S Shields) | Lamborn, Harry |
| Cocks, Rt Hon M. (B'stol S) | Lamond, James |
| Cohen, Stanley | Leadbitter, Ted |
| Coleman,Donald | Leighton, Ronald |
| Concannon, Rt Hon J. D. | Lestor, Miss Joan |
| Conlan, Bernard | Lewis, Arthur (N'ham NW) |
| Cook, Robin F. | Lofthouse, Geoffrey |
| Cowans, Harry | Lyon, Alexander(York) |
| Craigen, J. M. | Lyons, Edward(Bradf'dW) |
| Crowther, J. S. | Mabon, Rt Hon Dr J. Dickson |
| Cryer, Bob | McCartney, Hugh |
| Cunliffe, Lawrence | McDonald, DrOonagh |
| Cunningham, Dr J.(W'h'n) | McKay, Allen (Penistone) |
| Dalyell, Tam | McKelvey, William |
| Davidson, Arthur | MacKenzie, RtHonGregor |
| Davis, Clinton (Hackney C) | McMahon, Andrew |
| Davis, T. (B'ham, Stechf'd) | McNally, Thomas |
| Deakins, Eric | McWilliam, John |
| Dean, Joseph (Leeds West) | Magee, Bryan |
| Dewar, Donald | Marks, Kenneth |
| Dixon, Donald | Marshall, D(G'gowS'ton) |
| Dobson, Frank | Marshall, Dr Edmund (Goole) |
| Dormand, Jack | MarshalI, Jim (LeicesterS) |
| Dorrell, Stephen | Martin, M(G'gowS'burn) |
| Dubs, Alfred | Mason, Rt Hon Roy |
| Dunn, James A. | Maxton, John |
| Dunwoody, Hon MrsG. | Maynard, MissJoan |
| Eadie, Alex | Meacher, Michael |
| Eastham, Ken | Mellish, RtHonRobert |
| Ellis, R. (NE D'bysh're) | Mikardo, lan |
| English, Michael | Millan, RtHonBruce |
| Evans, John (Newton) | Mitchell, Austin (Grimsby) |
| Ewing, Harry | Mitchell, R.C.(Soton ltchen) |
| Flannery, Martin | Morris, Rt Hon A. (W'shawe) |
| Fletcher, Ted(Darlington) | Morris, Rt Hon C. (O'shaw) |
| Foot, RtHon Michael | Morton, George |
| Ford, Ben | Newens, Stanley |
| Forrester, John | Oakes, Rt Hon Gordon |
| Foster, Derek | O'Halloran, Michael |
| Fraser,J. (Lamb'th,N'w'd) | O'Neill, Martin |
| Freud, Clement | Palmer, Arthur |
| Garrett, John (Norwich S) | Park, George |
| Garrett, W. E. (Wallsend) | Parker, John |
| George, Bruce | Parry, Robert |
| Golding, John | Pavitt, Laurie |
| Penhaligon, David | Stott, Roger |
| Powell, Raymond (Ogmore) | Strang, Gavin |
| Prescott, John | Straw, Jack |
| Price, C. (Lewisham W) | Summerskill, HonDrShirley |
| Radice, Giles | Taylor, Mrs Ann (Bolton W) |
| Rees, Rt Hon M (LeedsS) | Thorne, Stan(PrestonSouth) |
| Richardson, Jo | Tilley, John |
| Roberts, Albert (Normanton) | Tinn, James |
| Roberts, Ernest (Hackney N) | Varley, Rt Hon Eric G. |
| Roberts, Gwilym (Cannock) | Wainwright, R. (ColneV) |
| Robinson, G. (Coventry NW) | Watkins, David |
| Rooker, J.W. | Welsh, Michael |
| Roper, John | White, J. (G'gowPollok) |
| Ross, Ernest (Dundee West) | Whitlock, William |
| Ross, Stephen (Isle of Wight) | Wigley, Dafydd |
| Sandelson, Neville | Willey, Rt Hon Frederick |
| Sheerman, Barry | Wilson, Gordon (DundeeE) |
| Sheldon, Rt Hon R. | Winnick, David |
| Silverman, Julius | Woodall, Alec |
| Skinner, Dennis | Woolmer, Kenneth |
| Smith, Rt Hon J. (N Lanark) | |
| Spriggs, Leslie | Tellers for the Noes: |
| Stallard, A. W. | Mr. Phillip Whitehead and |
| Steel, Rt Hon David | Mr. Dick Douglas. |
§ Question accordingly negatived.