HC Deb 21 February 1984 vol 54 cc690-1
14. Mr. Cohen

asked the Secretary of State for Employment if he accepts the conclusions reached by a study into the effects of the abolition of wages councils, commissioned by his Department and carried out by the department of applied economics at Cambridge.

Mr. Gummer

I broadly accept the basic results of this research, conducted between 1976 and 1979 and originally published in 1979 and 1980. I do not accept all the wider conclusions independently drawn by the department of applied economics at Cambridge in its 1982 publication based on this research, notably on the need for a national minimum wage.

Mr. Cohen

Does the Minister agree that if the wages councils were abolished workers in small firms, women and youth workers, ethnic minorities and homeworkers would lose, as the department of applied economics found? The bad employers would gain. As the late Sir Winston Churchill said when he introduced the first trades boards, the good employers would be undercut by the bad, and the bad by the worse. Is not that view still relevant in respect of wages councils?

Mr. Gummer

I do not believe that the hon. Gentleman has read the report, because it clearly says that wages councils have made little overall difference to levels of pay, employment or trade union membership. The hon. Gentleman's premise is wrong.

Mr. Robert C. Brown

Is the Minister aware that from 30 to 95 per cent. of lower-paid workers receive less than half the national industrial wage? Is that not a clear sign of the need to strengthen wages councils rather than weaken them?

Mr. Gummer

With respect, I do not agree that that figure is a clear sign of the need to strengthen wages councils. It does, however, show that the present system does not have the effect that the Opposition believe it should have. The Government are merely saying that it is much better to consider the system before saying that it does not have disadvantages. If the system produces higher unemployment, we ought to change it. Otherwise, we must consider whether it helps the lower-paid.

Mr. Couchman

Is my hon. Friend aware that increases in wages and improvements in terms and conditions of employment forced by the licensed and nonresidential wages councils some three years ago caused a considerable review of staff levels within the public house trade?

Mr. Gummer

I am aware that that criticism has been laid at the door of the wages councils. If such criticisms are well founded, it would be a gross dereliction of duty for the Government to ignore them.

15. Mr. Leigh

asked the Secretary of State for Employment what recent representations he has received about the Government's intention to abolish wages councils.

Mr. Gummer

The Government have taken no final decision on the future of wages councils. We have received a number of representations recently from hon. Members and others, some urging abolition and others in favour of reform.

Mr. Leigh

Has my hon. Friend noted the representations, especially from small business men, that the wages councils price the lower paid out of the market by protecting the jobs of established trade unionists, and force many small business men not to employ young people?

Mr. Gummer

I am aware of those representations. Once again the Opposition are reactionary and conservative in their refusal even to consider the evidence. The Government are saying, simply, "Let us look at the evidence, and make up our minds based on the facts rather than on reactionary views."

Mr. John Evans

Is the Minister not aware that the cynical campaign carried on by some Tory Back Benchers to abolish the wages councils is being taken as a nod and a wink by some unscrupulous employers to under-pay their already impoverished workers? That is because nobody is being prosecuted nowadays for flouting wages council awards and because employers are waiting for the Government to abolish the wages councils as soon as they possibly can.

Mr. Gummer

If it is cynical for Ministers to try to find ways of reducing unemployment, that is an odd definition of cynicism. I made it clear in the low-pay debate last week that the Government stand by the rule of law. There is no question of a nod and a wink being given to anybody. The hon. Gentleman did not listen to the answer that I gave earlier, saying that the level of operation and actions of the wages councils are similar to those existing under the Labour Government for many years.