HC Deb 18 March 1986 vol 94 cc146-7
2. Mr. Tony Lloyd

asked the Paymaster General how the wages of the best paid 20 per cent. of employees have changed in relation to inflation since 1979.

The Parliamentary Under-Secretary of State for Employment (Mr. Ian Lang)

Between 1979 and 1985 increases of about 13 per cent. for full-time men and about 19 per cent. for full-time women were exceeded by 20 per cent. of full-time employees.

Mr. Lloyd

Does the Minister not feel any shame in giving those figures to the House when, over the same period, the number of families on very low pay who have been forced to claim family income supplement has more than doubled? Why are we told that for the low-paid wage cuts will drive them to work, while for the high-paid nothing but massive pay increases are the order of the day?

Mr. Lang

I think that the hon. Gentleman may have his figures wrong. Under this Government the lowest paid 20 per cent. have enjoyed a real increase in income, as, with lower inflation, have many more people, whereas under the Labour Government that was all destroyed by inflation.

Mr. Heathcoat-Amory

Will my hon. Friend confirm that average wages are increasing in real terms? Does he agree that, although this is fine for those in work, it is bad news for the unemployed? Will my hon. Friend impress on the CBI, the TUC and other interested organisations that real wages are increasing less quickly in competing countries?

Mr. Lang

My hon. Friend is absolutely right. Average wages for men are increasing by about 10 per cent. and average wages for women are increasing by about 14 per cent. If we could achieve a 1 per cent. across-the-board cut, it might create about 100,000 new jobs.

Mr. Leighton

Is the hon. Gentleman aware that the highest paid register the least unemployment and the lowest paid register the highest unemployment? Is he aware that the Contract Cleaning and Maintenance Association told the Select Committee on Employment that, after a Treasury directive following abolition of the fair wages resolution, wages for cleaners in Government Departments and the number of staff were reduced? Has the hon. Gentleman noticed what is happening at the Driver and Vehicle Licensing Centre at Swansea where clearners on £27 a week have been asked to take a 30p per hour wage cut and to lose their holiday entitlement, and where staff numbers are to be cut from 139 to 102? Does that not make nonsense of pricing people into jobs? Is it not the Government's policy—

Mr. Speaker

Order. This is not an Adjournment debate.

Mr. Lang

May I reply to the hon. Gentleman with another example—the electrical contracting industry. In that industry wages for young people were reduced by one third and the number of apprentices recruited increased almost fourfold.

Mr. Prescott

Will the hon. Gentleman accept that the income increase in real terms for the top 20 per cent. has been far higher than the increase in real terms for those on low incomes? Low incomes have decreased and unemployment has occurred. Deregulation in the wealthy City sector of the market has meant more money and jobs for some but less for those on low incomes.

Mr. Lang

There has been a divergence as we moved from the distortions of the last Government's pay policy. The hon. Gentleman should bear in mind that our first Budgets in 1979 took out 1.3 million low-paid taxpayers left in the tax net by the outgoing Socialist Government.