Wages Councils (Hansard, 29 October 1985)

§ 11 Mr. Dixon
asked the Paymaster General how many representations he has received about his announcement on the future of wages councils.

§ Mr. Kenneth Clarke
We have received 64 representations on the future of wages councils since my right hon. Friend's announcement on 17 July.

§ Mr. Dixon
Is it not a disgrace that, of the 94 nations which are signatories to the ILO convention, the United Kingdom should be the first nation to renounce it? Is it not criminal that the Government, at a time when they have accepted the recommendations of the Top Salaries Review Body which has awarded judges, admirals and generals massive pay increases of up to 47 per cent., should be attacking those at the bottom of the wages scale? To get those in high salaried positions to work harder the Government gave them massive salary increases, but those on low salaries are to have their wages cut in order to make them work harder.

§ Mr. Clarke
The hon. Gentleman misunderstands the position. Our reason for proposing reform is that we think that this particularly Edwardian method of fixing wages is nowadays reducing the job prospects of many young people. For that reason, we are quite sure that a simplified 807 system will still give protection, where it is required, but will make it easier for young people to find jobs in the trades covered. I congratulate the hon. Gentleman, first, on remembering to be here, and, secondly, on remembering what his question was about.

§ Sir Kenneth Lewis
Is my right hon. and learned Friend aware that in the main there is nothing wrong with wages councils? However, in one area, to which he has already referred, something must be done about their ability to fix young people's wages at too high a level. If my right hon. and learned Friend can deal with that, he can keep the wages councils and still provide more jobs for young people within the limits of the labour market and wages.

§ Mr. Clarke
As my right hon. Friend announced in July, that is broadly the Government's intention. It appears that wages councils have fixed the pay for younger workers at too high a level in relation to adult workers in the trades covered by the councils. Therefore, the councils are unintentionally reducing the number of jobs that could be offered to young people. We intend to act to do something about that.

§ Mr. Speaker
Ms. Clare Short.

§ Mr. Roger King
On a point of order, Mr. Speaker. [Interruption.]

§ Mr. Speaker
Order. Ms. Clare Short.

§ Ms. Clare Short
Will the right hon. and learned Gentleman admit, on the basis of the consultation on his document, that the overwhelming majority of people oppose the Government's policy of weakening and undermining the wages councils? What is his evidence for the Government's amazing suggestion that the only way in which jobs can be created is by cutting the wages of the poorest workers? Today the right hon. and learned Gentleman has suggested that young people who earn £40 or £50 a week are earning too much. Will he comment on the research commissioned by the National Union of Tailors and Garment Workers from the department of applied economics at Cambridge university, which demonstrates that the only bit of research evidence that the Government had to support their case was fabricated and ill-informed? That research was published this week, and we should like the Government to comment on it.

§ Mr. Clarke
Not for the first time economists at Cambridge university are disagreeing among themselves. A number of their studies have come to varying conclusions. A few moments ago I thought that there was agreement on both sides of the House that we should strive to increase employment and improve employment prospects. The moment the Government move to remove unnecessary regulations in the wages market and an outmoded method of fixing young workers' pay and to set out the details of all terms and conditions for workers in certain industries, the Opposition object and defend past practices. We are convinced that the changes we are making will increase job opportunities for many people in the industries affected.

§ Mr. Baldry
Does my right hon. and learned Friend agree that the reason why 50 per cent. of young people in Germany go into apprenticeships and only 5 per cent. of young people in Britain do so is that in this country young people have been effectively priced out of jobs by trade unions, supported by wages councils wage rates?

§ Mr. Clarke
If we do not break the practices that are developing in some industries, whereby inexperienced school leavers move almost immediately to adult wage rates based on national negotiations, we shall merely ensure that youth unemployment is too high. It is for that reason that the Government are acting with respect to wages councils and other matters.