Wages Councils (Hansard, 5 March 1985)

§ 3. Mr. Leigh
asked the Secretary of State for Employment if he will make a statement on wages councils.

§ 6. Mr. Penhaligon
asked the Secretary of State for Employment if he will make a statement outlining the future for wages councils.

§ The Parliamentary Under-Secretary of State for Employment (Mr. Peter Bottomley)
The Government are considering the future of wages councils.

§ Mr. Leigh
What is the point of the Government pricing young people out of jobs—real jobs created by the market place through the operation of wages councils and employment laws generally—and then forcing the taxpayer to price those young people into what are often temporary jobs by the operation of the YTS and the young workers' scheme? Is it not time to sweep away wages councils and thereby perform a great service for young people?

§ Mr. Bottomley
The point that my hon. Friend makes about young people is most important, although I must remind him that some people, who have good contracts protecting themselves, argue for the abolition of all employment protection.

§ Mr. Penhaligon
Will the Minister confirm that wages councils for adults often defend wages as low as £70 a 760 week? Does he agree that a socially responsible Government have a duty to the most vulnerable in society? May we have a guarantee that, at least for adults, he will not remove this protective measure?

§ Mr. Bottomley
Many hon. Members on both sides of the House argue on behalf of those who are out of work. The gap between what some people get when they are unemployed and what they would get at or slightly below wages council rates might be filled by volunteers willing to work. It is important to remember the importance of trying to help those who are out of work as well as giving protection to those who are in work.

§ Mr. George Gardiner
Does my hon. Friend recognise that many people in the business community would regard the abolition of wages councils as the acid test of the Government's resolve to make the economy more flexible and thereby to create more job opportunities?

§ Mr. Bottomley
I accept part of what my hon. Friend says. It is worth remembering, however, that movements in pay rates and unit labour costs throughout the economy, as well as among the lower paid, are important.

§ Mr. Robert C. Brown
Is the Minister aware—he does not seem to be—that wages councils cater for the lowest paid workers in Britain and that, because of the reduction in the number of inspectors, many firms covered by wages councils are not being inspected? Is he further aware that of those inspected last year, the vast majority were found to be paying below the statutory minimum rates laid down by Parliament? When will the hon. Gentleman start to prosecute such firms?

§ Mr. Bottomley
The hon. Gentleman will be aware that Ministers do not take decisions on prosecutions. He will also be aware, if he bothers to examine the information that is available relating to the present and previous Governments, that he is wrong to assert that over half the firms inspected are paying under the statutory minimum rates.

§ Mr. Roger King
Is my hon. Friend aware that when I started as an engineering apprentice in 1960 I was paid the equivalent of £18 a week at today's prices, whereas the equivalent engineering apprentice now receives £50 a week? Is it any wonder that in West Germany there are far more apprentices than there are in Britain?

§ Mr. Bottomley
My hon. Friend makes the sensible point that young people look for the opportunity of gaining greater education and skill training and that many of them are willing to accept reasonable incomes if they have the prospects of improving their position and contributing more as they become worth more. The crucial point is that no employer will take on an employee unless he can see some benefit from doing so, and no employee will take a job unless he can see some benefit from taking it. Getting those two together is what really matters.

§ Mr. Ron Brown
Why is it that police chiefs, judges and generals have not priced themselves out of their jobs, despite their high wages? Are those gentlemen doing the dirty work for the Tories in suppressing those who are protesting against their wages?

§ Mr. Bottomley
No, Sir.

§ Mr. Michael Forsythe
Is my hon. Friend aware that according to the Low Pay Unit the lowest decile of those 761 who are paid low wages earn a lower proportion of the average wage than their predecessors did 100 years ago? It would seem that wages councils have failed in their purpose. Does my hon. Friend agree that the reality is that the councils have destroyed jobs for young people and for members of the ethnic minorities and rewarded those in semi-skilled jobs at the expense of the unskilled?

§ Mr. Bottomley
Many interpretations can be drawn from the available figures and all sorts of expectations can be built on the possible reform Or abolition of the councils. The questions which face the Government, and which may in time face the House, are whether it is right to allow people to take jobs which they are willing to take at rates of pay which employers are willing to offer and the sort of protection which is essential. It is clear that many industries which are not covered by wages councils pay equivalent rates and that the council's existence may hold down as well as hold up some pay rates.

§ Mr. Evans
Will the Minister confirm that a recent Government report on wages councils inspections in the clothing industry revealed that in half of the workplaces visited some or all of the workers were being illegally underpaid? Does that not show that employers who pay illegal poverty wages and the Government who turn a blind eye to their actions should be condemned, and not the councils? Will the Minister guarantee that the Government will renew their international obligations on minimum rates of pay under the International Labour Organisation convention later this year? Will he also take the opportunity to condemn the report in today's edition of the Financial Times that the Government intend to remove young people from the protection of wages councils?

§ Mr. Bottomley
I think that the hon. Gentleman would do well to reread the report of the wages inspectors in the three areas that are covered. I have no intention of commenting on press speculation.