§ 8. Mr. Ray Powell
asked the Paymaster General how many workers are currently covered by wages councils; and what proportion are under 21 years of age.
§ Mr. Kenneth Clarke
About 2.75 million workers are covered by wages councils. Of these, approximately 20 per cent. are under 21 years of age.
§ Mr. Powell
Is the Paymaster General aware that my union—the Union of Shop, Distributive and Allied Workers—has expressed much anxiety about the suggestion that the Government might amend or abolish 174 the wages council for shop workers? Is he also aware that the Shops Bill, which is now in the other place and which deals with the introduction of Sunday trading, will remove controls over young people working in shops? They can no longer benefit from wages council protection. Will the Minister tell the House what proposals the Government have in mind?
§ Mr. Clarke
I am happy to repeat that it is the Government's firm intention to introduce a Bill this Session to reform the wages councils. We propose to reduce the powers of the wages councils so that they can specify only one basic rate and one overtime rate. We also propose to remove employees under the age of 21 from the scope of wages councils. Our motive for doing so is that we believe that, by setting young people's wages too high in relation to adult wages, and too high in relation to the value that they add to a business, we are making more youngsters unemployed than we need to. The reform will increase the potential for more youth employment.
§ Mr. Grylls
Does my right hon. and learned Friend agree that the argument in favour of removing wages councils, at least for those aged under 21, has been won and established in the public mind, even if not in the mind of the Opposition? If wages councils destroy or deter the creation of new jobs, they are ineffective and we had better get rid of them anyway. On both counts, it would be much better to get rid of them.
§ Mr. Clarke
I trust that we have won the public argument. When we introduce the Bill we shall discover the extent to which we have won the parliamentary argument. I agree with my hon. Friend's arguments and conclusions. The wages councils have quite unintentionally reduced the number of jobs that are made available to young people in this country.
§ Ms. Clare Short
Can the Paymaster General explain why the Government intend to weaken the protection that is afforded to 3 million workers, including ½ million young workers, who are paid very low wages? According to the "New Earnings Survey," since 1979 the top 20 per cent. of workers have increased their pay above the average, but the bottom 20 per cent. had pay increases that were lower than the rate of inflation. They have, therefore, suffered a net drop in income. This proposal will ensure that they are paid even less.
§ Mr. Clarke
My first priority is the interests of the 3 million or so people who are unemployed, in particular the young unemployed who are included in that total. If the wages councils continue to stipulate extremely complex pay arrangements in very important trades, and continue to set for young employees pay rates that are too high in relation to pay rates for experienced adults, the effect will be to reduce the number of jobs that are made available to young people in this country. The wages councils are therefore out of date in those respects and it is high time that we reformed them.