HC Deb 15 December 1986 vol 107 cc1027-34

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Neubert.]

9 am

Mr. Max Madden (Bradford, West)

This morning, throughout west Yorkshire men and women have gone to low-paid jobs. Today, throughout west Yorkshire men and women will go into local jobcentres desperately searching for work. It is a matter of serious concern that a disturbing number of the jobs advertised in the 21 jobcentres in west Yorkshire are for jobs with rates of pay which are below the statutory legal minimum. It is clear that the Government are colluding with unscrupulous employers to break the law on minimum pay, for, although the Government have cut the number of wages inspectors they employ to enforce legal minimum pay, the Government employment service is advertising jobs at less than the statutory minimum. The victims are thousands of men and women working in shops, restaurants, hotels, pubs, cafes, hairdressing, textiles and clothing and at home.

We know about the problems of low pay, because west Yorkshire has the worst low pay record of all nine main urban regions in Britain. Wages council minimum rates for adult workers range from £70 for clothing workers to £80.50 for workers in non-food shops. Men and women earning £1.50 to £2 an hour know only too well that there are only eight shopping days to Christmas, because they are at their wits' end trying to provide for their families and are desperately worried about how they will pay their rates, gas bills, electricity bills, water bills, and all the other bills that come tumbling through the letter box at the beginning of every year.

I propose to quote extensively from a report entitled "Low Pay Centres" by Steve Winyard and Maggie Hunt of the west Yorkshire low pay unit which surveyed jobs advertised at rates as low as 80p an hour—for a part-time taxi controller in Huddersfield, and others below the legal minimum set by wages councils. The report says:

At the time of the survey in August the national average wage for men was just over £210 and for women just under £140. Very few of the jobs advertised in the wages council sector offered the prospect of earnings anywhere near these levels. Most were paying wages of between £70 and £85 per week or £1.75–£2.21 per hour. There were one or two examples that went below £50 per week. However, before looking in detail at this sector, we should refer to the jobs in the 'miscellaneous services' category that are not covered by a minimum wage. These were the very worst paid vacancies in August. At the very bottom of the pile was this vacancy advertised at the Huddersfield Jobcentre: 'Part-time Controller, Huddersfield Town Centre, 80p per hour, hours to be arranged, will involve evening and weekend work. Working on radio message control, directing taxis and taking information. Experienced person preferred. Must be conversant with the Huddersfield area …' Many of the job advertisements for a 'nanny' were also offering rates of pay well below £1 per hour, even after an allowance is added for food and accommodation. The following advertisement from the Leeds Jobcentre was one of the worst paid 'Nanny (live in), Headingley, £25. Live in all found. Three children 7, 5 and 2. Experience preferred. Involved in home life 18+' A large number of low paid job advertisements were for vacancies in the rapidly growing sector of 'private welfare'. Old people's homes, nursing homes and private hospitals were all advertising for domestic and care staff with wages in the region of £1.50–£1.70 per hour. These pay rates are significantly below those paid in the public sector. … 'Part-time Cook, Bradford 9, £1.70 per hour, Mon-Fri 9.00–12.00. To work in a residential home for the elderly. Will prepare lunches for approximately 20 people 18+ … Many of the Jobcentres had vacancies for general cleaning work and the most common rates of pay were between £1.50–£1.70 per hour. … 'Part-time cleaner, Brookfoot, £1.55 per hour, 6 pm-8 pm Mon-Fri. Required for general office cleaning i.e., vacuuming, dusting, emptying bins, cleaning toilets. Must be fit, active and reliable … Low Pay Unit studies in other parts of the country have shown that security guards are not only very low paid, but also face long and unsocial hours … 'Static Guards. Wakefield area. £1.50 per hour. 6.00 pm—6.00 am. Usually some day work including weekends. Will patrol premises/sites to check security. Previous experience, own transport and phone required. Should be able to provide 2 references.' With hourly rates of pay in the region of £1.50, a security guard will have to work over 80 hours a week to earn above the Council of Europe's decency threshold for wages. Such hours are not uncommon in the industry however, as the Dewsbury job advertisement indicates. Five or six night shifts plus some day work is often expected by the cowboy employers in this industry … Finally there were also some very low paid jobs being advertised in the 'leisure industries' … 'Arcade Operative. Brighouse. £1.63 per hour. Tues. Thurs. Fri. and Sat. 11–6. Mon. 11–3. Full-time person to assists in the running of an amusement arcade. Some cleaning duties,…' The report says about workers covered by wages councils: Wages Council Orders are extremely complex and the minimum rate can vary according to experience, type of work done, the nature of the firm's business and, even how many tables there are in a fish and chips shop! In a number of cases the details on the job card were not adequate to permit a precise calculation. However often the wages offered were so low that no matter what assumptions are made it is clear that a firm is illegally underpaying … Focusing firstly on bar staff, there were many advertisements in the Jobcentres offering hourly rates below the LNR wages council minimum (£1.91 per hour for workers aged 21 and over). £1.80 per hour was frequently mentioned for part-time staff … 'Bar/cellar person, Cottingley. £1.80. Split shifts 39 hours. Experienced bar person to work split duties. To do cellar work bottling up in the mornings and general bar duties. Must be smart and presentable. Will be required to cover for functions and weekend work. That job is estimated to be underpaying at the rate of £4.40 per week.

The report says: The lowest rates of pay were being offered for vacancies in cafes and restaurants. The following advertisement for a cook in a cafe is 33p per hour below the minimum set by the UPR council for an 'assistant cook' (£2.03 per hour). Someone taking this job would be underpaid by nearly £9 for the three days worked. There are also examples of vacancies for shop workers in which advertisements were for paying below the wages council minimum: Part-time shop assistant, Leeds 12, £1.84 per hour. 10–1, Monday to Friday. To work in a small supermarket serving meat, also preparing sandwiches and filling shelves. Experience strongly preferred. Must be mature and reliable. There are also examples of jobs in clothing and textiles which were being advertised at below the council minimum. The report says: The clothing manufacturing wages council covers work in the manufacture and alteration of most types of clothing. At the time of the survey the minimum rate for a 39 hour week was £70, representing an hourly rate of £1.79, with pieceworkers guaranteed at least the same rate as timeworkers. A disturbingly high proportion of clothing vacancies advertised in the jobcentres gave no details of wage rates; pay was 'negotiable', 'to be discussed' or 'piece rates'. Even so a considerable number of advertisements were found to be offering illegally low rates of pay". The report continues: Well below the legal minimum was the following advertisement for homeworkers which appeared in the Otley Jobcentre: 'Machinists (outworkers). Home area. Piece rate of £1.40 per hour. Work as and when you like in your own time. Experienced through machinist required to make up children's garments for home'. There were also examples of hairdressing jobs paying below the minimum. I quote:

Part time stylist. Keighley. £1.71. Tuesday 1–5. Wednesday to Friday 9–5. Saturday 9–3. Fully qualified ladies hairdresser to do settings, cutting, perming, etc. Must be fully qualified and experienced. I have referred to the difficulties of workers in getting clear information about the rates of pay for any job that they intend to undertake. It is important that the Government take positive action in this respect and several others that I shall mention.

All employers who wish to advertise jobs at jobcentres should provide a written declaration stating whether the vacancy that they wish to advertise is covered by a wages council and, if it is, that it meets all the requirements of the current wages order. Such a move could be introduced voluntarily and, if necessary, backed by legislation. There should be more trained jobcentre staff with easy access to the latest pay rates so that all vacancies are checked on a routine basis. The difficulty is that there have been cuts in staff at jobcentres and they do not have access to up-to-date sets of wages orders. Indeed, some years ago the Manpower Services Commission decided to withdraw copies of time rates of wages and hours of work from jobcentres, making it even more difficult for the staff to be able to check whether the vacancies meet the legal minimum pay rate requirements.

Full information about the wages councils system should be displayed in all jobcentres, including minimum rates. In Sheffield, each job card says whether the vacancy is covered by a wages council; if it is, it shows the minimum rates that apply to that job. If it can be done in Sheffield, I see no reason why it cannot be done in other jobcentres in west Yorkshire and indeed in other centres throughout the country.

There should be more outdoor wages inspectors properly supported by indoor staff in west Yorkshire where, as a result of cuts in the number of wages inspectors, firms can expect to be visited only once in every 14 years. That is a scandal, and there should be an immediate increase in the number of outdoor wages inspectors so that firms can be visited more regularly and action can be taken by the Government.

We are all aware of the fiddles that the Government have carried through since they were elected in 1979. They have fiddled the unemployment figures to get people off the register, and almost at any cost. There has recently been much controversy over the questionnaire that the Government introduced deliberately to push people off the unemployment register and to suspend them from benefit if they refused to accept work. I believe that the Government have an obligation, having introduced the questionnaire, to ensure that all workers who are desperately seeking work have clear information about job vacancies and the pay rates that apply to them.

The scourge of low pay in west Yorkshire inflicts stress and misery on thousands of men and women in full-time employment and their families. Low pay imposes a considerable burden on local community services in my county. Low pay hits the local economy of west Yorkshire. It depresses demand for goods and services because low-paid workers lack spending power. Firms in west Yorkshire face lack of demand and reduced business stability as a result of competition that is based on wage undercutting. Despite what Tory Ministers say, low pay does not lead to the creation of jobs or job security. Low pay causes major social and economic problems in west Yorkshire.

That is why, in a recent survey, an overwhelming majority of people in west Yorkshire came out in favour of a national minimum wage to combat low pay in all occupations. One of those who was questioned said: Something must be done to end low pay. It is absolutely slave labour for many workers today. That is the view of many of my constituents and many other men and women throughout west Yorkshire. They are extremely concerned about the extent of poverty and the appallingly low pay that they are offered for the work which is available. When the Minister replies, I hope that he will say that he can take positive action in response to the reasonable and modest recommendations made by those who prepared the report to which I have referred. If he can do so, his assurances will be very welcome.

9.17 am
The Parliamentary Under-Secretary of State for Employment (Mr. David Trippier)

There is no argument but that some people's wages are low, and it would be desirable if they could be increased. The Government recognise that there is a low-pay problem in west Yorkshire, as there is in other parts of the country. We are concerned that an unfortunate minority are not able fully to share in the prosperity of our society. Where the hon. Member for Bradford, West (Mr. Madden) and I differ is over how the problem can be solved.

The hon. Member talked about wages councils and gave me the impression—he may not have wanted to do this—that it was almost as if the Government had decided to do away with the councils and did not recognise their importance. The Government recognised that there was a need to retain wages councils for the protection of minimum rates of pay which obtain in industries that are covered by the wages council orders, with the exception of workers under 21 years of age. We thought it right and fair that we should give younger people the opportunity to put their foot on the first and important rung of the employment ladder.

I could have done with the hon. Member being a member of the Standing Committee that considered the Wages Bill. As he would imagine, I was involved with that Committee for a few months. I was waiting for an Opposition Member to refer to the fact that the wages council orders were extremely complicated. The hon. Gentleman was fair when he told the House that in some instances it was difficult—I think that I have transcribed his words correctly—to calculate the various rates and minimum rates because of the number of tables in a cafe. It was extremely difficult. The hon. Gentleman placed me in a difficult position because the report that has constantly been referred to in the debate is out of date, for the simple reason that the Wages Bill, which is now an Act of Parliament, has streamlined wages councils orders and simplified all the different rates of pay. I think that the hon. Gentleman will welcome that.

The Government have said that there must be a minimum wage to ease the confusion not only among employers but employees—a point that the hon. Gentleman seemed to be prepared to concede. That is the major reason why we have cut the number of inspectors.

On the level of compliance within Yorkshire and Humberside, 90 per cent. of the workers employed in the wages councils industries are not underpaid. Twenty-five per cent. of establishments were found to be underpaying but in those cases only one or two workers were actually underpaid. It has always been the Government's argument that, because there was so much confusion about the wages councils orders because they were so complicated, one could be forgiven in many cases—not all, I concede—for thinking that the employers could get it wrong and the employees would not perhaps have the natural form of redress because they would not understand the complicated wages councils orders. We have put that right.

The hon. Gentleman referred to the advertising in jobcentres of wages covered by the wages councils orders that still exist, although in simplified form. It would be wrong and foolish for me to rubbish his proposal out of hand. Obviously, I had no idea of what he would say in the debate. It is true that some vacancies have been advertised at below the legal minimum rate. I still maintain, at the risk of hammering the nails out of sight, that it is mainly because of difficulties, not only for jobcentre staff but for employers, in interpreting the orders because they were so complicated.

I understand that in the hon. Gentleman's region the local director of the Manpower Services Commission is already discussing the matter with the Low Pay Unit. As a result of the debate, I shall take a personal interest in those discussions and make sure that the hon. Gentleman's recommendation is considered fully. I shall ask also for the result of the discussions to be brought to my attention.

If the Government are saying, on the one hand, that we are now simplifying the wages councils orders so that everyone can understand them, it seems a little difficult, I concede, for even staff of the MSC in local jobcentres not to be able to understand them now that we have taken this action. The hon. Gentleman did not say that it should be mandatory, but it may be that we should consider whether a person advertising a job in a Wages Council industry should be required to sign a piece of paper or something to show that he is complying with the order. I shall look at the matter. I do not make any promises. The hon. Gentleman put that point very firmly. That is the end of the good news.

Because of the differences between Her Majesty's Opposition and Her Majesty's Government, it is important that we make absolutely clear what the dividing line is. I am suspicious of any attempts to exaggerate the number of low-paid workers through using misleading or inappropriate definitions. I do not believe that there is any purpose in defining low pay in relative terms, such as two-thirds of average earnings. It is clearly wrong to inflate the estimate of the number of low-paid workers through including young people and part-time workers. Also, like should be compared with like. Basic pay rates should not be compared with the level of average earnings. But more importantly, if low pay is defined as a relative concept, no matter how we increase the standard of living of all our people, low pay will always be an issue.

An absolute level of pay is also inappropriate, especially if we try to link low pay with poverty. A low-paid worker may be part of a household with a large total income and so enjoying a high standard of living. Conversely, someone on a relatively high wage may, because of family circumstances, enjoy a relatively low standard of living. What Opposition Members should be doing, instead of producing misleading statistics on the number of low-paid workers, is thinking about constructive proposals to help the low paid. I shall try to deal specifically with the point raised by the hon. Gentleman about the minimum wage.

It is surely self-evident that the level of real pay in this country depends upon what we can produce and upon what we can sell. Real pay and increased standards of living for all our citizens can be improved only by improving our economic performance. There are no easy or simple solutions. It may not be palatable, but it is true to say that to increase wealth, and so increase absolute pay and, at the same time, improve job prospects, entails keeping inflation down and improving productivity and competitiveness. There are no short cuts—as Opposition Members appear to believe—to a permanent improvement in the position of the low paid. The improvement in the standard of living for those who are poorly paid depends crucially upon the general improvement in our economic performance.

That the standard of living of the low paid depends upon improved economic performance can be seen in the position of the low paid in west Yorkshire. We do not want to enter into the Wars of the Roses. Although I might believe that the hon. Gentleman was on the wrong side of the barbed wire dividing his county from mine, at least we stand shoulder to shoulder in not having to change money at Watford. We are concerned about the people in the north. As the hon. Gentleman would imagine, I am familiar with his part of the world. I visited it officially only a few weeks ago. That was my umpteenth visit in the past few years.

I am aware that in those areas in west Yorkshire, the jobs to which the hon. Gentleman refers are concentrated on the more traditional industries. Unfortunately, the employment structure of the area includes a proportionately large number of such industries, as is the case in my part of east Lancashire. Only when those industries become more profitable and their employees more skilled will they be able to pay higher wages without risking jobs. Any attempt to force those industries to pay higher wages through Government action—be it a minimum wage or anything else—will not help the thousands of low-paid workers who will consequently lose their jobs.

Since coming to office we have consistently followed policies to improve our economic performance. Those policies take a while to become effective and are now bearing fruit. Output has grown by 14 per cent. since 1980 and productivity by 17 per cent. in the past few years we have experienced a faster rate of output growth than any other EEC country. In the 1970s, under a Labour Government, our rate of output growth was among the lowest.

However, there can be no grounds for complacency, especially about our rate of increase of earnings and unit wage costs. Unfortunately, earnings in Britain are still growing faster than in other major countries—7.5 per cent. in Britain but only 1.5 per cent. in the United States and in West Germany. Because of this, our unit wage costs are rising more rapidly and we are losing competitiveness.

Compare the increase in the take-home pay of low-paid workers since we came to office with the prospect of what is likely to happen if the Labour party should return to office. The proposals of Labour members—I am referring not just to the speech of the hon. Member for Bradford, West about the minimum wage but to his colleagues' speeches—will lead to an increase in public expenditure of £28 billion. How can that be financed? There is only one answer—by additional taxation. The Labour party's proposals are equivalent to an increase in the basic rate of tax to 53p in the pound, or an increase in VAT to 43 per cent.

Low-paid workers should look closely at these false promises and should remember that they will be paid for with their money. Labour Members promise to help the low-paid. But, to pay for their promises to other groups, the low-paid will suffer a fall in take-home pay and a lower standard of living. On top of this, Labour's policies will lead to higher inflation, which will also quickly erode the real living standards of the low-paid.

The policies of the Labour party will wipe out all the gains in take-home pay which the low-paid have made since we came to office. It is not possible to increase public expenditure and at the same time increase the take-home pay of the low-paid. I expect that the interests of the low-paid will once again be sacrificed to finance the political dogma of increased public expenditure—

The Question having been proposed after Ten o'clock on Monday evening, and the debate having continued for half an hour, Mr. SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at half-past Nine o'clock am on Tuesday.