Low Pay

HC Deb 01 February 1989 vol 146 cc341-97 6.25 pm

Mr. Michael Meacher (Oldham, West)

I beg to move, That this House, noting that the number of low-paid workers paid below the European decency threshold has increased by two million since 1979 and that the lowest paid are now relatively poorer than at any time for a century, strongly condemns the Government's proposal to abolish the Wages Councils, which will depress the living standards of millions of families and will encourage employers to compete by wage cutting rather than by improved efficiency.

Mr. Speaker

I must announce to the House that I have selected the amendment in the name of the Prime Minister.

Mr. Meacher

In two days' time the consultation period ends for the Government's consultative document on wages councils. Since the Government have made clear their intention to abolish wages councils, whatever the facade of consultation concludes, the Secretary of State for Employment will leave Britain alone in Europe and almost alone in the world in having no legally enforceable minimum wage provisions.

The right hon. Gentleman will be acting in defiance of the CBI, the employers and other management organisations; he will be breaking a number of international agreements; he will be disregarding the almost unanimous view of the Tory-dominated Select Committee on Employment: and, worst of all, he will be the architect of the wrong economic policy for Britain, encouraging inefficient employers who cut wages at the expense of good employers who compete by innovation, new investment and new technologies.

One can appreciate the right hon. Gentleman's embarrassment at the consultative document. It is as thin in substance—it is three and half pages if one excludes the appendices—as it is vapid in fact and in argument. Much of the document, I understand, was written in Downing street rather than in the Department of Employment, no doubt by the same young Turks who wrote the National Health Service review. It was sneaked out separately from the White Paper—and several hours later—on 5 December, although it is not clear whether that was because of its economic illiteracy or so as not to harm too much the right hon. Gentleman's reputation in the coming Cabinet reshuffle.

The document refers to evidence that Council minima continue to be above the levels required to fill jobs. In other words, the objective of abolition is wage cuts. Yet a few paragraphs later the document states that since the abolition of wages councils' protection for young people, their earnings continued to rise.

Given the Government's belief that the main cause of rising unemployment is high wages, one would expect the rise in earnings of young people to be followed by job losses, but, on the contrary, the document tells us that "the rate of youth unemployment has declined dramatically." The Secretary of State cannot have his cake and eat it. At one and the same time he wants to argue that wages councils are holding wages too high and thereby destroying jobs, but also that abolition of the wages councils will not lead to wage reductions which might cause hardship. Or perhaps the right hon. Gentleman wishes to dissociate himself from the document because it is riddled with internal inconsistencies.

As hon. Members in all parts of the House know, the truth is that the Government want to lower minimum wages but do not want to be seen doing it because they judge it would be unpopular. The document says, without a shred of evidence: the facts do not suggest that cases of extremely low wages, imposed against workers' wishes, will become endemic or widespread.

Yet the document reports that current minimum rates of pay for adult workers range from as little as £76 a week to £92 for a full week's work, before tax and other deductions.

We want to know from the right hon. Gentleman—with his £1,000 a week salary and his £100,000 minimum fee membership of Lloyd's—whether he regards those levels as extremely low wages. The right hon. Gentleman is obviously embarrassed when the facts are revealed. Would a member of Lloyd's regard those as extremely low wages? If the right hon. Gentleman does not, perhaps he will tell the House what he does regard as extremely low wages. If he does regard them as extremely low wages, how could he not accept that the abolition of the wages councils will increase the number of workers paid at these, or even lower, levels?

Mrs. Ann Clwyd (Cynon Valley)

Will my hon. Friend give way?

Mr. Meacher

I shall be glad to give way to my hon. Friend, but the right hon. Gentleman keeps murmuring and I am sure the House would like an answer to those questions from him.

Mrs. Clwyd

Does my hon. Friend agree that the major issues in the Pontypridd by-election are not the extravagant claims which have been made by Conservative Members during the last hour and a half, but those of high unemployment in areas such as Pontypridd, and, especially, low pay? Is my hon. Friend aware that 40 per cent, of the people working in the Pontypridd constituency earn £4,000 a year or less? Is that not disgraceful?

Mr. Meacher

My hon. Friend makes a significant point, which undoubtedly will feature strongly in the by-election. Indeed, my hon. Friend the Member for Alyn and Deeside (Mr. Jones) will comment in more detail on that matter when he replies.

As my hon. Friend the Member for Cynon Valley (Mrs. Clwyd) said, more than 40 per cent, of people in Wales—that certainly includes Pontypridd—are now earning less than the European decency threshold. That figure is nearly 10 per cent, higher than it was 10 years ago. That fact is far more important than all the ridiculous filibustering on the by-election which has occurred in the past one and a half hours.

We are entitled to know the Secretary of State's attitude to low pay, because his Parliamentary Private Secretary, the hon. Member for Bolton, North-East (Mr. Thurnham), was the sole member of the all-party Select Committee on Employment to vote last time round for the abolition of the wages councils. At that time he said: People have said they do not want to go back to Victorian sweatshops. Would we not be better off if the country was one sweatshop, hard at work instead of having 3 million unemployed? We should like to know whether the right hon. Gentleman also holds those views, or whether he repudiates his own Parliamentary Private Secretary? I notice that the right hon. Gentleman is keeping extremely quiet.

In one sense we already know the right hon. Gentleman's attitude to low pay—he is in favour of it. He has pursued criminal underpayment of wages below minimum rates with all the enthusiasm of the Prime Minister canvassing at election time for the right hon. Member for Old Bexley and Sidcup (Mr. Heath). Out of 88,000 establishments caught paying illegally low wages in the past 10 years, he has prosecuted only 56—less than one in 1,000.

The right hon. Gentleman has doubled the number of his fraud investigators, while at the same time he has halved the number of his wages inspectors. The low paid might be excused for thinking that the right hon. Gentleman will certainly use the law against them when they are unemployed, but he will refuse to use it to assist them when they are in work.

Ministers like to refer to the Government as a law and order Government, but it is law and order in a kid glove when it comes to tracking down employers who break the law. The consultation document even admits that, to cope with the reduced inspectorate, routine visits to small firms have now been replaced by postal questionnaires asking the employer whether he is committing the criminal offence of illegal underpayment of his workers. I suppose, on that precedent, the Government might as well abolish the police force, and send regular letters to known criminals asking them whether they have committed any crimes recently. In this case, the right hon. Gentleman is abolishing the wages police force, and he is abandoning any follow up, even letters.

Not one reputable organisation is in favour of the Government's destruction of the wages councils. Just as the Botha Government in South Africa is much more hardline Right than the business community, so the Thatcher Government are much more rigid and intransigent than all the employer organisations. I shall not mention, of course, the Low Pay Unit, the TUC and the Labour party, because their views are well known, but the Confederation of British Industry has made it clear that it sees no reason to change its policy from that which emerged from its consultation in 1985 which showed overwhelming support in the CBI for the retention of reformed wages councils.

In a letter of 17 June last year, the director-general of the CBI reported to the right hon. Gentleman—I hope that he will refer to it later: it would be wrong to suggest that abolition of Wages Councils is as yet favoured by employers in every sector covered. A stronger view is taken by the British Institute of Management. Its director-general wrote to the right hon. Gentleman on 19 January. He said: We remain unconvinced that the time is right for the abolition of Wages Councils. We do not see the structures as being inflationary, nor harming job creation to a significant extent, and they continue to provide some necessary protection for low-paid workers. I do not believe that the right hon. Gentleman could expect a more majestic put down.

Not even the right hon. Gentleman's favourite, the Institute of Directors, is a lot of help to him. It may come out later in the debate, but the Institute of Directors claimed that its call for abolition was supported by three quarters of its members. However, on closer examination it emerged that the survey on which that conclusion was based had a non-response rate of 93.5 per cent. The Institute of Directors admitted, too, that most of its membership had no direct experience of wages councils. Of course, that did not stop Sir John Hoskyns, the director-general—never one to be put off by lack of knowledge or facts—saying two days later that anyone whose pay dropped because of abolition could rely on family credit. What he did not say, or perhaps he did not know, was that there are 2.5 million workers covered by wages councils, of which 400,000 are entitled to family credit, but only half that number claim it.

Mr. Dave Nellist (Coventry, South-East)

Is my hon. Friend aware that, in a previous incarnation, John Hoskyns worked for the No. 10 policy unit, where he wrote the paper which set up the YTS scheme in 1983? In that paper he said that the aim of the YTS should be to bring in a scheme that increases the differential between youth and adult wages. John Hoskyns' experience is all about driving down wages, especially those of young people.

Mr. Meacher

That is why John Hoskyns has always been a great favourite of this Government, whose aim has always been to drive the maximum wedge between all sections of the population, whether it be between the north and the south, manual and non-manual workers, young and elderly people or ethnic minorities. It would be helpful if we could have that point answered by the curiously quiet and subdued Secretary of State.

Mr. Ian Bruce (Dorset, South)

Will the hon. Gentleman give way?

Mr. Meacher

No, I shall not give way to the hon. Gentleman, but I will give way to the Secretary of State.

Mr. Bruce

rose——

Mr. Meacher

No, I shall not give way. The right hon. Gentleman can look after himself.

A large part of low pay is in retailing, and significantly the Retail Consortium—which employs a large number of low-paid workers—has reported to Ministers: the overwhelming majority of the retail trade favour the continuation of the wages council system, subject to reforms. Even among small firms—they must always be the Government's last hope—the Government's fanaticism for abolition is not shared. This is the second time in three years that they have come back with exactly the same proposals. In a Department of Trade and Industry survey of 200 small firms, only 4 per cent, agreed—in answer to a prompted question-that wages councils were a "burden" on their business. Only 1 per cent, mentioned wages councils in any context and of the 19 listed so-called burdens, wages councils ranked third from the bottom. If the right hon. Gentleman is really interested in lifting the burden on businesses he should concentrate on what is crippling them now—the soaring interest rates.

Mr. Chris Mullin (Sunderland, South)

Has my hon. Friend noticed that only five Conservative Back Benchers—four if one omits the Minister's bag carrier—are present? Does he agree that that no doubt will be widely remarked upon in our free press tomorrow?

Mr. Meacher

I certainly hope that my hon. Friend's observation will be carried in the papers where we hope to read about it tomorrow. From a quick glance at our Benches, I would say that about 60 of my hon. Friends are present, which is 10 times greater than the attendance on the Tory Benches.

Mr. Ian Bruce

I am grateful that the hon. Gentleman has given way and is at last demonstrating that he is willing to take part in a debate.

I am having some difficulty following his argument because he has said clearly—I thought that he was trying to recant what he had said in previous debates—that we had taken young people out of wages councils and that their wages had gone up. I have always argued that wages councils keep wages down. If the hon. Gentleman has admitted that, how can he continue with his argument that people's wages will go down if the protection of the wages councils is removed? Surely logic and experience tell us that their wages will go up in a free market.

Mr. Meacher

The hon. Gentleman is a little too eager. He is the victim of Government propaganda because it is the Government's document that states that the wages of young people have gone up. I do not believe that that document is worth the paper it is written on. There is not a shred of evidence behind it and I am sure that every allegation it makes is completely unsupported by evidence.

The Secretary of State has no support in this country or abroad. He is ditching Britain's international obligations. One of the articles of the treaty of Rome—we hear a lot about that treaty when it is convenient to the Government —aims: To promote improved working conditions and an improved standard of living for workers". Perhaps the right hon. Gentleman will tell us how the abolition of wages councils will achieve that. Article 4 of the European social charter—it would never surprise me if the Government disavowed that charter—enshrines the right of people to receive fair remuneration sufficient for a decent standard of living". How does paying people less than one third of the national average wage do anything but prohibit a decent standard of living? The International Labour Organisation has stated: almost all countries in the world have some form of minimum wage protection". All European Community countries, without exception, either have a statutory minimum wage or national agreements reached within individual industries, which are binding at law and provide a statutory minimum rate.

National minimum wages also exist in the United States. That is rather surprising, as the Government are anxious to emulate the capitalist leaders of the western world—Canada, Australia and Japan. When top-rate taxes were much higher in Britain, the Tories insisted that for market reasons they must be brought into line with our competitors. Now when it comes to minimum wage rates, about which the rest of Europe is in step, the Tories say that for market reasons we must move out of line with our competitors. There is not a shred of logic behind that argument; it is just Tory self-interest.

Ms. Clare Short (Birmingham, Ladywood)

At the time of the removal of wages councils' protection of young people, Ministers, time and again, gave undertakings that the remaining wages council system would be in place indefinitely. A couple of years later they are now breaking their promises. Those Ministers are dishonourable and their word is worth nothing.

Mr. Meacher

I am sure that my hon. Friend is not one of those people who still believe that there is any credibility in Government promises. I doubt whether there are many people left in the country who still believe that. The abolition of the wages councils is not in the Tory manifesto, but, of course, they have done so many things that were not in that manifesto. Their abolition is not supported, of course, by the low paid, but nor is it supported by the overwhelming majority of our people. The right hon. Gentleman is not only going back on his promises, but is acting in the teeth of the views of the great majority of people.

The Government may not realise that their strategy may be blocked by the EEC. There is clear evidence that other member states will not be prepared to tolerate Britain using low wages as a form of hidden subsidy or tariff to give British firms an unfair competitive advantage. I know that the Germans in particular are strongly opposed to what they call "social dumping" by firms illegally paying low wages.

The Government in the lead-up to 1992 are trying to have it both ways. Of course they are behind the single market initiative because they believe passionately in removing obstacles to competition in the international market place. They have not faced up to the fact that, although in some areas that requires the removal of regulations, tariffs, protection and import restrictions, in other areas it requires a standardisation of such things as product standards, health and safety and environmental regulations. That is why the harmonisation of employment rights throughout Europe is also necessary to ensure fair competition. It is extraordinarily myopic for the Government, alone in Europe, to be so fanatical about competitive markets and yet to be so blind to the logic of their own position, which will undermine them.

Not for the first time, what is good for the Thatcherites is bad for Britain. If the Government ideologues succeed in deregulating the labour market, they will be launching diametrically the wrong economic policy for Britain.

Mr. Julian Brazier (Canterbury)

Will the hon. Gentleman give way?

Mr. Meacher

In a moment. I am glad to welcome the hon. Gentleman to the debate. The Government Benches are beginning to fill up—there must be six Conservative Members present out of 350. That shows their interest in this issue.

An unregulated market is based not on efficiency, productivity, quality or design—all the things that the Government talk about—but on wage cutting. In such a market no individual firm dare risk investing in training or re-equipment for fear that a competitor will steal a march by offering a lower price base on low wages. The Government's policy is a recipe for stagnation, low morale, low productivity and technological backwardness. That is precisely what the Government's and the Chancellor's low-tech no-tech economy is headed for. Forcing down wage rates is not improving efficiency, but escaping from it. On that point I shall quote the words of a former Minister with responsibility for labour affairs who said in this Chamber: It was formerly supposed that the working of the laws of supply and demand would naturally regulate or eliminate that evil… payment below a living wage— But where…you have no organisation, no parity of bargaining, the good employer is undercut by the bad and the bad employer is undercut by the worst"—[Official Report, 28 April 1909; Vol. IV, c. 388.] Those are not the words of my right hon. Friend the Member for Blaenau Gwent (Mr. Foot) nor the words of Frank Cousins or Ernie Bevin; they are the words of the Prime Minister's exemplar, Winston Churchill. I might say that there are many people who would welcome him back in exchange for the Government.

Mr. Brazier

I am glad that there is one more hon. Member on our Back Benches than there were on the Opposition Back Benches when we were debating cold weather payments. However, the hon. Gentleman makes an interesting point. He asks what is the logic of the Government's policy of deregulation in regard to the economy as a whole. Surely the logic of deregulation is that it has led to unemployment in this country falling over the past five years, while it is still rising in other parts of the EEC, when our average wages are rising rapidly.

Mr. Meacher

The trouble with Government Back Benchers is that they are victims of the Government's propaganda. They do not seem to realise that unemployment is still twice as high as it was on the last day of the Labour Government. The Government's low-pay policy is completely inconsistent with the objectives that they like to profess. The Secretary of State continually talks about getting people off benefit, but a policy of wage cutting pushes more people into dependence on benefit, whether it is housing benefit or family credit.

This year, according to the public expenditure White Paper, the Government are proposing to budget £409 million for family credit. That is a substantial subsidy, by any standards, at the taxpayers' expense for the lowest-paying firms. I hope that the Secretary of State will touch on some of those matters when he replies to the debate. Is he not ashamed that the Government are subsidising inefficiency in that way?

The Secretary of State is always preening himself on reducing unemployment. That is what misled the hon. Member for Canterbury (Mr. Brazier). However he is increasing unemployment by actively encouraging wage cutting. Workers are also customers. By cutting their pay and their capacity to buy goods and services, he is undermining employment. It is time that the Government and the Secretary of State took it on board that one man's pay cut is another man's job loss.

The Secretary of State for Employment (Mr. Norman Fowler)

Now that the hon. Gentleman is talking about employment which is a central part of the debate, will he confirm that the work force—people in employment in this country—is at an all-time record high and is far in excess of anything achieved in 1979 by the last Labour Government?

Mr. Meacher

The right hon. Gentleman is saying that the numbers of people in work as a proportion of the total number who want work is higher than it was in 1979. That is a most extraordinarily illiterate statement. The percentage in work is still substantially lower than it was in 1979. If the right hon. Gentleman is also a victim of his own propaganda, God help this country.

Mr. Fowler

The hon. Gentleman clearly does not understand the point, or if he understands the point, in his typical way he is evading it. There are more people—almost 26 million people—in jobs in this country. Does he accept that that is an all-time record in this country? For once let the hon. Gentleman be frank.

Mr. Meacher

The right hon. Gentleman is ignoring the real issue which is the proportion of people who want work who are able to get it. That is what counts. If the number of people in the country grows, it is not surprising that the number of people in work grows. The question is whether it is as high as it was in 1979 in proportion to the total number of people wanting work. It is not. It is substantially lower. As several of my hon. Friends have said, a very high proportion of the extra 1 million jobs that have been created, about which we hear so much, are part-time, low-paid and insecure jobs. In the coming recession later this year those will be the jobs that go first.

Mr. Thomas Graham (Renfrew, West and Inverclyde)

Is my hon. Friend aware that Strathclyde in Scotland has lost 40 per cent.—146,000—of its manufacturing jobs since 1979? What a record for the Government to be proud of.

Mr. Meacher

My hon. Friend is quite right. It is extraordinary that the Secretary of State should seek to defend his position when the Government are so vulnerable on this matter.

The Chancellor likes to tell the House that people need incentives and that is why he gives tax breaks to the affluent and the well-heeled. Will the right hon. Gentleman tell the House why the rich need to be paid more to work harder while the poor need a pay cut to make them work harder? I shall be happy to give way to him.

The latest news is that the Government are targeting the low paid for the Budget. One might have been forgiven for thinking that they had been targeting them for the past 10 years. There are now 9.9 million adult workers in Britain paid below the European decency threshold—an increase of 2 million under the Tories. Pay rises for the highest paid one fifth of men in the work force have been 50 per cent, greater than those for the lowest paid one fifth. The poorest paid one fifth of male manual workers now earns less, relative to the average, than in 1886 when the figures were first collected. Relatively, they have never been poorer than they are today. Things have not improved since Lord Gowrie resigned as Minister of State four years ago because his £33,000 a year salary could not provide a decent civilised existence against the cost of living in London. Presumably he is the most celebrated victim yet of the Government' pay policy

At least Ministers are now conceding that the Tory trickle-down theory of economic growth is not working. That reminds me of the line of the Beatitudes which says: "It's the rich that get the prunes and the poor that get the shits."

Mrs. Teresa Gorman (Billericay)

On a point of order, Mr. Deputy Speaker. I take offence at the language being used by the hon. Member for Oldham, West (Mr. Meacher) and I should like you to bring him to order for using such language in the Chamber.

Mr. Deputy Speaker (Mr. Harold Walker)

There is so much background noise in the Chamber that it is very difficult for the Chair to hear hon. Members' comments.

Mr. Meacher

I know that the hon. Lady is a very sensitive and dainty person. Therefore, I shall make the same point about the Tory theory of trickle-down economic growth by saying that it is the rich that get the prunes and the poor that get the runs.

It is hypocritical for the Secretary of State and the Chancellor to talk about raising tax allowances as a Budget for the low paid when at the same time the Government have frozen child benefit for the second year running and are now proposing further cuts for the low paid by threatening wages councils. Nor does the Chancellor, whose concern for the low paid has been about as touching as Marie Antoinette's for the starving masses, seem to be aware that tax cuts will do almost nothing for the low paid because they trigger an automatic reduction of family credit and housing benefit leaving them no better off. I am sure that the Secretary of State does not know about that, because it is a social security matter and he has very little interest in social security.

The Prime Minister stated in memorable words on the steps of Downing street in 1979, Where there is discord, may we bring harmony. Where there is error may we bring truth"— although in the event that turned out to be written by Bernard Ingham— Where there is doubt, may we bring faith, where there is despair, may we bring hope. With the exception of the unemployed, there must be few sections of the population for whom discord, doubt and despair has been doubled and redoubled more than for Britain's army of low-paid workers. Privatisation, endless social security cuts, market-rigging subsidies for lower wages, the abolition of the fair wages resolution, renunciation of international treaty obligations underpinning minimum wages and now the abolition of the wages councils have all been used ruthlessly by the Government to drive low wages even lower. It is a one-sided meanness and vindictiveness in our increasingly two nations country and that is why we shall be repudiating it strongly in the Lobby.

6.59 pm

The Secretary of State for Employment (Mr. Norman Fowler)

I beg to move, to leave out from "House" to the end of the Question and add instead thereof: 'noting that since this Government came to power personal disposable income has increased at every level in society and that the lowest paid have had proportionately higher increases than many other groups, considers that the best way in which the Government can help the low paid is by creating the conditions for more jobs by breaking down the barriers to employment and encouraging labour market flexibility; and welcomes the Government's decision to consult about the abolition of Wages Councils.'. As the debate is about low pay, I shall be dealing with the issue of wages councils, but first let me pick up two points made by the hon. Member for Oldham, West (Mr. Meacher).

The hon. Gentleman mentioned international comparisons of minimum wages. It is, of course, true that a number of other countries have minimum pay arrangements; it is equally true that minimum rates in countries such as the Netherlands have not been raised since 1983. In the United States they have not been raised since 1981. Various Common Market and OECD reports have drawn attention to the need for Government to consider the impact of minimum wages on jobs.

The number of prosecutions carried out by the wages council inspectors has seldom reached double figures in any year under any Government. For the record, however, the ratio of prosecutions to establishments underpaying has been higher since 1979 than during the last Labour Government. That is another fact that the hon. Gentleman got wrong.

If the hon. Gentleman wishes to quote Winston Churchill, the best and most revealing quotation that he could give is Churchill's observation that the false doctrines of Socialism, if ever seriously put into practice here, would reduce this island to chaos and starvation.

I draw little comfort from the hon. Gentleman's speech, but its most extraordinary feature was not what it contained but what it almost omitted but then glossed over. The hon. Gentleman rambled on about the Council of Europe measure on low pay, which has one distinction: it is not accepted by any European Government that I know of. As my hon. Friend the Member for Canterbury (Mr. Brazier) pointed out, the hon. Gentleman paid no serious attention to the reduction in unemployment in this country; yet the most effective contribution that any Government can make to improving incomes is surely the creation of conditions for more jobs.

If a Government are serious about tackling low income, they must be serious about creating jobs. Achieving more jobs means removing the barriers and obstacles to employment. That has led the present Government to tackle, for example, the industrial relations problem left by the Labour Government of which the hon. Member for Oldham, West was a member, who exported British job after British job overseas and left the country in chaos.

Mr. Win Griffiths (Bridgend)

Does the Minister realise that, according to figures provided by the Library, by the end of last year in Wales, Scotland, the north-west, the north and the west midlands there were more than 800,000 fewer jobs than in 1979, and that the extra jobs created in Britain are mainly part-time jobs in the south-east?

Mr. Fowler

I do not accept that, but I was about to deal with precisely that point.

If the hon. Member for Oldham, West wants European comparisons, surely European comparisons on employment are the most relevant. If he was serious about low incomes, he would welcome the reduction in unemployment. He would welcome the fact that the unemployment rate has fallen faster here in the past two years than in any other major industrialised country. According to standardised figures, it is below both the European Community average and the rate in countries such as France, Belgium, Italy, the Netherlands and Spain—and that in, for instance, Canada. He would also welcome the fact that as many new jobs have been created in this country over the past four years as have been created in the rest of the European Community countries combined, and the fact that more people are now in employment in this country than at any time in history. That includes 1979, and takes no account of those undergoing training. The work force now totals nearly 26 million.

Anyone who is seriously concerned about low incomes will see the importance of those dramatic improvements. Unemployment is clearly the chief factor in low incomes, and more employment is the best and surest path out of lower incomes. Our number one aim must surely be to produce the pay cheque rather than the dole slip.

Mr. Tony Banks (Newham, North-West)

It is difficult to believe what the right hon. Gentleman is saying, given that since 1979 there have been 19 or 20 changes in the way in which unemployment figures are calculated. [HON. MEMBERS: "24."] I am told that there have been 24. It is going up all the time.

Despite that, the right hon. Gentleman must accept that unemployment is still twice as high now as it was in 1979 when his Government were elected. So that we can proceed objectively and rationally, is the right hon. Gentleman prepared to allow the International Labour Organisation to conduct an independent inquiry into the various changes so that we know once and for all whether the Government are telling the truth or giving us a pack of lies?

Mr. Fowler

The hon. Gentleman knows that there are two ways of counting unemployment. The first is to count those drawing unemployment benefit, which is the way in which not only the present Government but their Labour predecessor did it. Another way is by means of the labour force survey, in which 60,000 households are surveyed.

The latest labour force survey will, I hope, be published in a month or two, and I ask the House to wait for its publication. Past labour force surveys, certainly the one last year, have shown that the figures that we have published as the unemployment count, far from overstating the improvement, have, if anything, understated it. It would be wise for the House to wait for the survey's publication before jumping to any conclusions and to see whether it confirms a real and dramatic fall in unemployment, as has been the case in previous years.

The hon. Gentleman and his party lose a good deal of credibility up and down the country when they try to challenge what everyone else recognises as a real improvement. It is entirely legitimate for the hon. Gentleman to argue that the improvement should be greater and should continue, and I shall come to that point, but to deny that there has been an improvement at all is simply to make his position untenable.

Mr. Meacher

Is the right hon. Gentleman aware that he is directly misleading the House? The facts are completely contrary to what he has said. The labour force survey for the latest year for which information is available—1986–87—shows a fall of 80,000 in unemployment, while the fall in the unemployment benefit count for exactly the same period, given monthly by the Government, was 240,000. In other words, the Government's unemployment benefit count exaggerates three times the much better and, indeed, standardised international definition of the fall in unemployment. Rather than a fall of 1 million over the past two and a half years, there has been a fall of about 300,000.

Mr. Fowler

The hon. Gentleman, in his hysterical way, has got it wrong again. We have tried to point this out to him, but he never listens. The unemployment total in the labour force survey is below that in the count of unemployed claimants.

I urge the hon. Gentleman, in his own interests, to wait until the new labour force survey is published and then to come back if he believes that the figures that we are publishing exaggerate the position. I do not believe that they do or that any serious commentator or politician in this country will consider that to be the position.

Ms. Short

rose——

Mr. Fowler

That is why it is of such fundamental importance that the unemployment rate in this country is now down to just over 7 per cent—a fall of almost 2 per cent, over the past 12 months—that the reduction has benefited all regions and that the steepest falls have been in areas where the problem has hitherto been worst, such as the west midlands, the north-west and Wales.

Mr. Allen McKay (Barnsley, West and Penistone)

rose——

Mr. Graham

rose——

Mr. Fowler

If Opposition Members are concerned about low pay and poor people, surely they are concerned about the position of unemployed people, particularly the long-term unemployed. Do they have no conscience? Are they not concerned? [Interruption.]

Mr. Deputy Speaker (Sir Paul Dean)

Order. I am finding it exceedingly difficult to hear what the Minister is saying.

Ms. Short

On a point of order, Mr. Deputy Speaker. You will know that Opposition days are precious to us. We put down a motion to debate low pay. The Secretary of State is filibustering and making all sorts of pretentious claims about the unemployment figures, but he is not talking about low pay. Is he in order?

Mr. Deputy Speaker

This is a very short debate, and I know that the hon. Lady is hoping to catch my eye. Bogus points of order only waste time.

Mr. Fowler

The reaction of some Opposition Members reveals their stance on unemployment and their embarrassment that unemployment is coming down. That is what I find so disturbing.

Mrs. Alice Mahon (Halifax)

rose——

Mr. Fowler

The number of long-term unemployed has come down by about 450,000. That must be good news for anyone who is concerned about people on low incomes, and there is every reason to believe that unemployment can come down further. There are 700,000 vacancies, so the opportunity exists for a further fall in unemployment. It was precisely for that reason that we introduced the employment training programme to train long-term unemployed people so that they could take the jobs which, fortunately, are now available. In spite of opposition, employment training has got off to a good start and, after 20 weeks, there are now 125,000 people under training on the scheme.

The hon. Member for Oldham, West did not support the programme for long-term unemployed people. He did not even support the position of the leader of his party on a programme for the long-term unemployed. If he has to choose between party politics and the position of the poor and unemployed, he chooses party politics every time.

Mr. Nellist

rose——

Mr. Fowler

The hon. Member for Oldham, West is not only a weak man; he is a weak politician.

Great progress is being made both in reducing unemployment and in training unemployed people.

Mr. Nellist

rose——

Mr. Fowler

There is no evidence that the standard of living of people in this country has dropped over the past 10 years; quite the contrary. The evidence is that it has increased at an appreciably faster rate than was achieved by the last Labour Government.

The hon. Member for Oldham, West has quoted some surveys. Let me take two surveys which have infinitely more weight than anything that he put forward. The first in an analysis of households with below average incomes carried out by the Government's statistical service and published last summer. It shows that households of all income levels have had increased living standards under this Government. It shows that there was a 6.4 per cent, increase in the real net income of the average household between 1981 and 1985 and that, for the poorest 10 per cent., the increase was 8.3 per cent.; in other words, it was above the average. The survey goes up only to 1985, but it is clear that, as unemployment has fallen, so the position has improved.

The evidence of the new earnings survey is even more significant. Between 1979 and 1988, the real earnings of male workers increased by an average of 2.6 per cent, a year. That compares with an increase of only 1 per cent, a year under the last Labour Government up to 1979. There was a 32.9 per cent, increase in female earnings between 1979 and 1988 compared with only 16 per cent, between 1974 and 1979. Again, that is a higher annual average.

In addition, a survey carried out by my Department and published in the Employment Gazette shows that, between 1973 and 1979, a third of all male occupations in this country had not a rise but a fall in real earnings. That is the record of the Labour Government of which the hon. Gentleman was a member. Since 1979, the real earnings in almost every male occupation have increased. I am not, therefore, inclined to take lectures from the hon. Gentleman on ways to improve the position of lower paid workers.

When the hon. Gentleman was in government, he served in an Administration that made many of the lower paid even more lower paid. That is the record. In opposition, he has tried to sabotage a training programme whose aim is to find solutions for thousands of people living on what we would all agree are low incomes.

Ms. Short

I am sure that the Secretary of State knows the difference between an average and a distribution of that average and that he is capable of disaggregating the figures. He will know that we have had some economic growth in Britain every year since 1945, so to claim an annual rise in living standards is not significant. However, if he disaggregates the growth in average earnings, he will see that the lowest paid 20 per cent, are relatively worse off and that there is a growing divide in our country. That is the issue that we wish to discuss tonight.

Mr. Fowler

The figures that I have quoted show that the position has improved unquestionably over the past nine or 10 years and has improved much faster than under the last Labour Government. The hon. Lady may not like that evidence. She was not a member of that Government and no doubt does not take a great deal of responsibility for their actions, but that is the position.

Mr. Nellist

Will the Minister give way?

Mr. Fowler

I must make progress.

I am not prepared to take lectures on wages councils from the hon. Member for Oldham, West. The House will understand that we are in the final stages of consulting about the future of the wages councils. Opposition Members might have rather more to complain about if, before the consultation period was over, I came to the House and announced a decision. Let me explain why we believe that consultation was necessary.

By any analysis, the wages council system has changed fundamentally since its inception in 1909. Two thirds of the workers whom it now covers are paid above the minimum rate. Wages councils cover only one tenth of the work force. It is essentially a system for retailing, catering and, to a lesser extent, clothing manufacturing. Retailing and catering together account for about 90 per cent, of the workers who are covered.

The system is not comprehensive and it is also-by common consent—full of anomalies. It covers laundries but not laundrettes, the selling of cooked meat, but not that of raw meat. Not only have circumstances changed since 1909, but there have been developments since legislation was introduced in 1986 to exclude young people under the age of 21.

There is no evidence that the removal of the right of those under 21 to take their cases to wages councils has led to lower pay for them. There is every reason to believe that it has encouraged their employment. [Interruption.] I shall give the hon. Member for Oldham, West evidence on employment in a minute. Since young people were excluded from wages councils regulation in 1986, employers have been more willing to employ them. They have also enjoyed greater freedom to fix pay levels and that has contributed to the dramatic decrease in youth unemployment. Unemployment among those aged under 20 has fallen during the past two years from 21 per cent, to just above 12 per cent. Some young people have enjoyed opportunities which would not have existed had regulation continued, and their earnings in general have not fallen away.

In hotels and catering the weekly earnings of full-time male workers under 21 have risen from £96 in 1986 to £105 in 1988—an increase of 9 per cent. Females in the same industry aged under 21 have enjoyed a pay rise during the same period from £87 to £97—an increase of 15 per cent.

In retailing, the earnings of full-time sales assistants have risen from £90 to £107—an increase of 19 per cent. There is no evidence of a reduction in the earnings of under-21s since the wages council system was introduced.

Economic and social conditions have been transformed since the wages council system was introduced. Average pay is higher and average hours worked each week have fallen by between 10 and 15 hours. The great majority of people who are covered by the wages councils work part time and many contribute a second income to the family.

The greatest difference since the introduction of wages councils is that there is now a comprehensive framework of social security benefits—not only out-of-work benefits, but in-work benefits. The system of in-work benefits provides direct help for people on low incomes. Family credit——

Mr. Nellist

Will the Secretary of State give way?

Mr. Fowler

No, I shall not give way again.

Family credit is a generous replacement of the old family income supplement. It is a viable and worthwhile benefit that makes a substantial difference to the income of working families. Expenditure on family credit in its first year of operation is estimated at £420 million. That compares—[Interruption.] If the hon. Member for Liverpool, West Derby (Mr. Wareing) waits, he will hear some answers. That compares with an expenditure of £180 million in the final year in which the family income supplement system was in operation.

The amount of money devoted to low income families who are in work has more than doubled since the family credit system was introduced. A quarter of a million families now receive family credit—25 per cent, more than received family income supplement.

Mr. Nellist

Will the Secretary of State give way?

Mr. Fowler

No, I shall not.

The average weekly award under the family credit system is more than £25—nearly double the £13 of the average family income supplement award. That is evidence that families most in need are claiming benefit.

We continue to encourage the take-up of this new benefit. It has been in operation for only 12 months. Last summer I issued a leaflet which was distributed amongst jobcentres to explain family credit and other in-work benefits. [Interruption.] If the hon. Member for Oldham, West wants to argue against in-work benefits—it will be a new stance for his party—will he explain why the last Labour Government did nothing about them? Family income supplement continued throughout that Government's period in office.

Circumstances have changed not only since the inception of the wages councils system but since the last consultation period in 1985. For those reasons, it is right to review the role of the councils and to consult on the proposal that they should be abolished. Decisions will be taken after the consultation period.

The Opposition's attempts to link the proposed abolition of the wages councils with an increase in poverty founder on the facts. Most employees covered by wages councils are part-time workers, and about two thirds contribute a second income to the home. The size of that second income affects the standard of living of the household, but such families are not normally defined as living in poverty. Families without opportunity of employment encounter the greatest difficulty in achieving an acceptable standard of living. That is why the Government are concentrating on creating conditions in which employment can grow and unemployment be reduced.

Mr. Nellist

Will the Secretary of State give way?

Mr. Fowler

I shall not. I have given way on many occasions.

Mr. Nellist

Not to me.

Mr. Fowler

The hon. Gentleman may be right.

The Government can best help by creating conditions in which more jobs are generated and removing unnecessary barriers to employment. One that is still to be overcome is the shortage of skills in the labour market. Those goals form the background to our training proposals.

The Government have tackled income barriers that stand in the way of people taking jobs in the first place. The Government have made a serious start on raising the tax threshold by increasing personal allowances by more than 25 per cent. They have restructured national insurance contributions to make lower paid jobs more attractive to employers and employees. Since 1985, national insurance contributions have been levied at the two lower rates of 5 per cent, and 7 per cent. By raising income tax allowances and by cutting the standard rate of income tax the Government have ensured that the average liability to income tax and national insurance of the bottom 10 per cent, of taxpayers has fallen by 19 per cent, in real terms during the 1980s.

Another effect of having to finance Government expenditure by high taxes was that, after paying tax, people became better off when claiming social security than they were when employed. That is why the Government are determined to control spending and cut taxes. We are determined to ensure that people are better off in work, and that is why we have introduced family credit.

Mr. Nellist

Will the Secretary of State give way?

Mr. Fowler

I am close to finishing.

Opposition Members have expressed concern about a widening of the distribution of income. They should remember that the standard of living of every part of the income distribution has increased absolutely. Real personal disposable income, both in total and per head, is higher than at any time under the last Labour Government. The test is whether the incomes of the poorest have increased. They have. That is more important than changes in relative distribution of income. The Labour party's lurid caricatures do not square with the facts. The truth is that the majority of families are better off than they were in 1979. The incomes of couples with children have increased in real terms and the incomes of single parents have also increased. A strong growth in real earnings is important because it represents real and quantifiable increases in the material welfare of people.

Over the past 29 months or so, unemployment in this country has come down month by month. We have seen the biggest reduction in unemployment since the war. We have also seen the creation of a record number of new jobs. That is the Government's record, and it is a record that brings undoubted benefit to everyone in this country.

7.31 pm

Mr. Martyn Jones (Clwyd, South-West)

Despite the protestations of the Secretary of State, in the past 10 years, the divide between rich and poor has widened hugely. Methinks the Secretary of State doth protest too much. My hon. Friend the Member for Oldham, West (Mr. Meacher) has told us that, since 1979, the number of adult workers falling below the Council of Europe's decency threshold as specified by the European social charter has increased from just under 8 million to 9.9 million. Over the same period, pay rises for the highest paid fifth of men have been 50 per cent. greater than those for the poorest fifth. The poorest fifth of manual workers earned only 64 per cent. of the average in 1987, compared to 69 per cent. of the average in 1886. Meanwhile, the highest paid now earn more, relative to the average, than at any time since 1906. I do not remember the Secretary of State challenging those figures. Perhaps he will when he winds up, but I doubt it.

The problem of low pay has worsened, and progress towards equal pay for women has stopped. The average earnings of women full-time workers is two thirds that of men, and the gap between the earnings of young people and adults has continued to widen. People between 18 and 20 years of age earned just 60 per cent. of average adult pay in 1979. There is also growing regional inequality, which the Secretary of State did not tackle. Even in the south-east, nearly one in four adults earn low wages despite working full time. In the rest of Britain, the figure is about one in three and that applies to regions such as Wales.

We can blame deliberate Government policy, including the 1983 abolition of the fair wages resolution and the 1986 weakening of the wages councils' minimum wages system. As a result, some groups of workers have experienced actual cuts in weekly wages. The Secretary of State says that unemployment is the key to low pay. I would say that the Government have created the conditions for unemployment precisely for that reason. The number of people claiming benefit—to use a euphemism—may have come down, but there are still large numbers of people chasing jobs, which is good for low wages and profits, but bad for Britain in the long term. The Government seek to justify the encouragement of low-wage employment as a means of creating jobs, but the increase of 1.6 million in the number of people affected by low pay since 1979 is exactly matched by an increase in the numbers who are unemployed.

My reason for speaking today is to give one example of an area that is neglected entirely by Government policy. I shall describe an effect slightly different from that of the abolition of the wages councils. My point is that we have a shortage of many skills, such as those of hospital technicians. I apologise for giving a list, but it is necessary. Areas affected by a shortage of skills are microbiologists—of which I am one—haematologists, health physicists, audiology and radiology technicians, pharmacy technicians, pharmacists and ECG technicians. All those workers are low-paid, yet they are desperately needed. Senior pharmacy technicians' pay starts at £5,500—one third of the average wage in this country. Pharmacy technicians at the top of the scale receive £8,500. That is a pittance in anybody's book. How can one recruit people to those highly technical jobs with such pay? Their responsibilities are increasing. Microbiologists have been much in the news with salmonella, listeria and legionnaire's disease and without such technicians we should not be able to run the National Health Service—be it private or public.

I shall give one more example of the specific problem of recruitment. In the hospital that serves my area, ECG technicians are impossible to recruit. There should be five staff in the department, but there is only one full-time technician. She cannot even take a holiday because of low pay. People have come off the dole who are unable to survive on that pay. If pay is forced down in a professional sector such as that, how can we as a nation hope to compete in an increasingly technical world?

Mr. Barry Jones (Alyn and Deeside)

She works at Ysbyty Maelor Wrescam

Mr. Jones

Yes, that is the hospital. Employment training is hardly the answer to that problem; genuine pay scales are. That is the blight of low pay in one specific area.

7.36 pm

Mr. Tim Janman (Thurrock)

At the heart of the speech of the hon. Member for Oldham, West (Mr. Meacher) was the Opposition's desire to eradicate differentials completely from the labour market and to have us all start the race at the same point in life and to end up at the same point. That is at the heart of their philosophy. If it is not their objective to achieve complete equality of income across the labour market, it is certainly their desire, through bureaucratic intervention and regulation, to prevent the correct differentials occurring between different sections of the labour market. Those differentials are, of course, directly proportional to the different skills, abilities and experiences that different individuals have to offer.

It is ridiculous for the hon. Gentleman to start making comparisons between the income of a Secretary of State and somebody on low pay. It is a ridiculous, emotive and nonsensical point to make.

Ms. Short

Why?

Mr. Janman

If the hon. Member for Birmingham, Ladywood (Ms. Short) thinks that in the real world a person doing an unskilled job should be paid the same as a carpenter or a fitter, or somebody in the professions, she is clearly living in a world of her own.

Ms. Short

We hear so many speeches from Conservative Members in which they talk about people's wages as though those people were not real human beings. It is important to ask Conservative Members whether they could live on £100 a week. Could they keep their families on that money? Imagine what it would be like, and just think what they spend. They should think about the pay of many people working in public services in our country; that is the point to try to make Conservative Members understand. We are talking about real family budgets and family needs, not some abstract economic theory.

Mr. Janman

I do not need any lectures from the likes of the hon. Lady about what it is like to live on a low income, given my own family background. I come from a low-paid, one-parent family, and I can assure the hon. Lady that I continually visit constituents who have to live on low incomes.

Ms. Short

Do something about it, then.

Mr. Janman

The hon. Lady is taking a flight into fantasy, as her party continually does, if she thinks that there is a broad-brush, simplistic answer to the problems that people on low incomes face in coping day by day.

If the hon. Lady considers the track record, as my right hon. Friend the Secretary of State said, of the results of this Government's policies and compares them with those of the previous Socialist Administration—and with all the previous Socialist Administrations in this country—she will see that this Government have a much better record of increasing the real living standards of people on low pay, people on average earnings and those with above-average earnings. The hon. Member for Ladywood and her hon. Friend the Member for Oldham, West can make up the facts if they wish, but what I am saying is the truth.

We must ask what we mean by "low pay" and "poverty" because they are moving targets and always relative. If one raises the purchasing power of people on the bottom rung, the people on the next rung will want theirs raised to maintain the differential, and that mechanism will continue throughout the labour market.

As I said a moment ago to the hon. Member for Ladywood, I regularly visit many of my constituents. I operate a mobile surgery and take myself to my constituents instead of expecting them to come to see me. Because, inevitably, most of the people I visit tend to have problems—often derived from low incomes—I see what is happening at grass-roots level in my constituency. However, my observation, which proves that poverty is relative, is that sometimes when I go into a household which, on paper, has a low income, and look around, I see items that five or 10 years ago would have been considered luxuries.

Although I am not denying that there are genuinely people on low incomes in my constituency, as there are in many, if not all, constituencies in this country, there are cases in which people who are supposedly on low incomes or who are "poor" according to the figures of the Low Pay Unit have television sets, videos and hi-fis. That proves that the definition of poverty given by the Low Pay Unit is ridiculous.

Two centuries ago Adam Smith was much more accurate when he stated: By necessaries I understand, not only the commodities which are indispensably necessary for the support of life, but whatever the custom of the country renders it indecent for creditable people even of the lowest order to be without. In other words, people always want to keep up with the Joneses. As people of a certain level in society have their income and standard of living raised, so everybody below that level will want to keep up with them.

Our record of expenditure on the social and welfare system is far better than that of the previous Labour Administration, but due to the definition of low pay, each successive expansion of the benefit system results in more people being defined as "poor" if one takes the ridiculous definition that the Low Pay Unit and other bodies want us to accept. On that definition, it is argued that 15.4 million people now live in or on the margins of poverty in this country. I am confident that, if the vast majority of our people were told that on those figures 29 per cent. of the population were living in or near poverty, their reaction would be that the figures were utter tripe—and utter tripe is exactly what they are.

The Low Pay Unit, the Labour party and other professional do-gooders, few of whom contribute to the wealth creation process in this country, do the genuinely needy a great disservice by blurring the real problems that exist and by carping on in their naive and unrealistic way about the genuine problems of poverty that have always existed under Labour, Conservative and Liberal Governments. It is ridiculous and naive to suggest that with one simplistic policy decision one could remove at a stroke the problems that will inevitably continue to exist in any economy and in any society. Indeed, around the world, far more people are living on the breadline in collectivist, totalitarian, Socialist societies than in fluid, free-market capitalist societies such as ours.

It is worth considering the change in purchasing power in this country. Although my figures relate to average earnings, as my right hon. Friend the Secretary of State said earlier, as average earnings rise the real incomes of people on low wages also increase. I shall compare 1971 with 1987 in terms of how many minutes or hours somebody would have to work to buy certain key items that are important to ordinary family life.

In 1971, to buy one large loaf of bread one had to work for nine minutes; by 1987 it had fallen to six minutes. The 55 minutes worked in 1971 to buy 1 lb of rump steak had fallen to 41 minutes by 1987. Although there was perhaps a slightly different attitude to buying eggs in 1971, to buy 12 eggs in 1971 a male on average earnings would have had to work for 22 minutes; but by 1987 that had fallen to 15 minutes. It took 40 hours 30 minutes of labour to buy a car licence in 1971; which had fallen by 1987 to 23 hours 35 minutes. It would have taken 19 hours 55 minutes to earn the money to buy a colour television licence in 1971 but only 13 hours 41 minutes in 1987. The relevant figure for an average telephone bill fell from 50 minutes in 1971 to 35 minutes in 1987. That is clear evidence of a real increase in the standard of living of our people, both for people on average earnings and for those on lower pay.

There has been some talk about different countries and about people's relative incomes across the world. A couple of weeks ago, I was lucky enough to visit the Socialist shangri-la of Sweden—a country that is often held up as a model of Socialist perfection and as able to deliver higher living standards and good incomes on, from the Opposition's point of view, an impressive egalitarian stance. However, the wages in Sweden are so low that it is impossible——

Ms. Short

The hon. Gentleman must be joking.

Mr. Janman

Well, I am sorry to have to tell the hon. Lady that, on the figures quoted to me when I visited two Saab locations in Sweden, I was surprised, given Sweden's reputation, at just how low the wages of people working in the motor industry are. Given that taxation is so high, a husband has to have his wife going out to work in almost every instance in Sweden for the family unit to be able to have any income on which to live.

Mr. Ken Eastham (Manchester, Blackley)

Only a few weeks ago the Select Committee on Employment visited Sweden for informative in-depth discussions. The hon. Gentleman talked about so-called poverty pay and drew inferences about Sweden, but I advise him that average wages there were quoted as £1,000 per month in our terms.

Mr. Janman

I remind the hon. Gentleman that we are not talking about average wages, but about low pay. The example that I was giving was for manual——

Mr. Harry Barnes (Derbyshire, North-East)

rose——

Mr. Janman

I have already given way to the hon. Member for Manchester, Blackley (Mr. Eastham); perhaps I may be allowed to answer his point.

The example that I was quoting was related not to average earnings but to the earnings of people in the lower income bracket doing unskilled assembly work in the motor industry. As I understand it, this debate is about low pay. I have to say to the hon. Gentleman that the gross income of those people was no more, in terms of purchasing value and taking into account exchange rates, than that of workers in a similar industry in this country.

When the punitive taxation, the high marginal rates of tax, that Swedish workers have to pay in order to provide for the over-bureaucratic Socialist system that Sweden has to support is taken into account, I can say to the hon. Gentleman that, from what I saw, the standard of living of a person doing an ordinary manual job there is far worse than in this country—and it is far worse because of the punitive taxation and excessive employment protection legislation that effectively leads to fuller employment than is commensurate with labour market conditions at the time and that works through to very high prices.

So in Sweden, at the lower end of the labour market, wages are no more, in real terms, than they are here, yet the person is paying much higher taxation and much higher prices in the shops. When the hon. Member for Blackley goes back to Sweden he may like to take a look at the difficulties that employers have in paying any considerable differential between skilled and unskilled workers where there is very little difference at all. If they provide for any differential, because of the very high marginal rates of taxation it is all taken by the state, and the net income of the skilled worker is no more than that of the unskilled worker. I can assure the hon. Gentleman that the skilled worker in Sweden is hit very hard by that punitive taxation system.

The best protection for the low-paid, and the best way of providing maximum employment opportunity, is not regulation, intervention and wage councils; it is low taxation. I should like to take this opportunity to ask my right hon. Friend the Chancellor of the Exchequer to look hard at the possibility, in the next Budget, of making huge increases in the tax threshold. Already, 1.7 million fewer people pay tax than would be the case if there were still the same tax regime that we inherited from the Socialists in 1979. There is much more scope for reducing the tax burden on the low-paid in this country by making changes that would take millions more out of the tax system.

The other main matter of importance to the low-paid is also a matter for the Treasury, and that is a firm monetary policy to protect the low-paid from inflation. Inevitably, when we have high inflation rates—and from 1974 to 1979 they averaged 15.5 per cent.—it is the low-paid on fixed incomes who are worst hit, not the rich.

Mr. Nicholas Bennett (Pembroke)

Does the hon. Member not agree that, until we tackle the level at which people start to pay national insurance stamps, we will not actually lift them out of the low-pay group? We need to look at that in conjunction with the income tax system.

Mr. Janman

I am very grateful for that point. It supports the general direction of my argument, and would certainly include national insurance in the definition of "tax". National insurance, which is there for a specific purpose, is, of course, an element of taxation.

Let me mention now the need to abolish wages councils. This topic was one of the core parts of the speech of the hon. Member for Oldham, West. Before drawing some conclusions, I should like to quote from a letter I received from a small business woman, a constituent of mine, on this matter. I am afraid that this constituent was a victim of the Waffen SS wing of the Department of Employment, the wages councils inspectorate.

She writes: Dear Mr. Janman, We are a small retail shop selling all types of fabrics and trimmings. We recently had a visit from 'The Wages Council' and unfortunately we're not paying quite the full amount per hour to the part-time workers. The ladies who work here were quite happy with the arrangements we had with them, but that didn't count, because according to the inspector, 'We were breaking the law'. Whose law? In the end I felt like a criminal and that I didn't like.

[Laughter.] Hon. Members opposite may laugh, but the fact of the matter is that the existence of this legislation and the existence of these wages councils is jeopardizing not only that business and the employment that my constituent is providing, but similar small businesses up and down the country. I do not know exactly how many there are, but I am sure it must be tens of thousands.

The hon. Member for Oldham, West may like to quote the CBI, but the CBI is essentially the representative of large corporate concerns, or big business, and I do not believe that it is going to be totally in tune with the sort of problems that many small businesses, particularly in the retail sector, are going to have. It is that type of business which, I am afraid, has to bear the brunt of the totalitarian instrument of the wages councils. My constituent's only crime was to pay a wage that her business could afford and that her employees found acceptable, and the alternative is no business for her and no work for the people she currently employs.

Mrs. Maria Fyfe (Glasgow, Maryhill)

Could the hon. Member tell us how much this constituent of his was paying herself and exactly how much she was giving her under-paid workers, who, for all I know, may also have been constituents of his?

Mr. Janman

The hon. Lady misses the point completely. My constituent's exact payment to herself, which I suspect was not that large, and her exact payment to the people working for her, is not the point. The point is whether wages councils destroy job opportunities or enhance them. The fact of the matter, so ably illustrated by my constituent, is that they destroy jobs very successfully. The abolition of wages councils could free the labour market of this totalitarian and egalitarian distortion, and create up to 300,000 new jobs. I hope that this Government, who believe in the free market, will act and abolish these out-dated institutions.

Finally, I want to come to some conclusions on what the real issue in this debate is. The real issue, on which this Government have such a good record, is how, within the benefit system, we can genuinely make sure that people in this country, given their circumstances, are provided with a minimum income. The correct way of doing that is not to put a burden on businesses by way of wages councils, distort the labour market and destroy jobs; the correct way of doing it—as we have been doing through family credit, which is now much more extensive, and far more generous, than anything we have seen from any Socialist Administration—is to target benefits on those on the lowest incomes and to take as many people as possible out of the tax net altogether, allowing them to keep their earnings and spend them as they wish, instead of people on low incomes still having to pay some of the highest marginal tax rates in the world. Those are the real issues, and I hope that on wages councils my right hon. Friend will act soon.

7.59 pm

Mr. James Wallace (Orkney and Shetland)

The point that grieved me most about the speech of the hon. Member for Thurrock (Mr. Janman) was the patronising way in which he treated people in relative poverty who—surprise, surprise—have a television set. It comes ill from a party that tries to preach choice to say that some people should have no choice in life, that they must make do with the basic necessities and that they cannot try to get something better or at least try to ensure that such small mechanisms as are available through the state to help them get something better should not be made available.

To some extent, I agree with the Secretary of State—Labour Front Bench Members would probably agree, too —that those in poverty from low pay are not all the people who are in poverty, although there is undoubtedly a strong correlation and a large overlap.

In his evidence to the Royal Commission on the distribution of income and wealth Professor Layard noted that: Of workers in the lowest 10 per cent. of wages, only one in five was in the lowest 10 per cent. of relative incomes. There are undoubtedly some reasons for that. As has been said, many of the lowest paid are in second jobs, and their earnings help to raise a family income above the poverty line.

Ms Short

Will the hon. Gentleman give way?

Mr. Wallace

I shall not give way. I wish to deal with this point.

On the other side of the coin, there are many families in poverty, particularly large families in which a working parent is on a reasonable wage, yet it is insufficient to meet family needs. However, that should not blind the House to the fact that the most recent figures of the Low Pay Unit demonstrate that about 4 million people live in poverty or on its margins as a result of low wages.

Poverty may exist for reasons other than low pay, and in the long term, measures such as the integration of the tax and benefit system can do more than a national minimum wage to tackle the problem of poverty. I am becoming increasingly sceptical about the national minimum wage. Research in the United States, where there is a national minimum wage, suggests that it is not as helpful as it might seem on the surface in trying to take people out of poverty. A study by Carolyn Shaw Bell concludes: no money sum of wages can be calculated to be a minimum wage that will provide an income above poverty. Other surveys tend to suggest that job losses, which undoubtedly push more people into poverty, can result from the introduction of a national minimum wage. But it does not follow that such negative effects would flow from a targeted minimum wage of the type being administered by the wages councils. Pending the implementation of an integrated tax and benefit system, my colleagues and I believe that a reformed wages council system would be and should be an effective tool in tackling low pay while minimising any negative effects of a full-blown minimum wage policy.

My party opposed the 1986 reforms and queried how it could make sense, for example, to set a single overtime rate regardless of whether overtime was worked for an extra half hour at the end of a working day or for six hours on a Saturday. We were highly sceptical of the job creation potential arising from young people being excluded from the scope of wages council legislation. There is claim in the consultative document that the rate of youth unemployment has declined dramatically since 1986. No evidence was presented to show that that decline has anything to do with sectors covered by wages councils. Also, there is no claim that the rate of youth employment has gone up. That might have been a far more relevant claim if taking young people out of the scope of wages councils had the effect that the Government are claiming. That is the hallmark of the consultative document. It is full of bold and bald statements. For example, the very first paragraph refers to the White Paper "Employment for the 1990s." It states: Job growth in the 1990s will depend on pay arrangements which reflect a great deal of responsiveness to local labour market conditions; changes in product markets and technology; differences in performance, merit, and skills; the continuing profitability of the enterprise; and international competitiveness. The White Paper suggests that wages councils are incompatible with such concepts and practices.

Speaking on the subject of low pay in a debate on 15 February 1984, the right hon. and learned Member for Monklands, East (Mr. Smith) drew attention to conclusions that had been arrived at by a group of Cambridge economists who had been asked by the Government to look at the effects of wages councils on the economy. That group of economists found no evidence of direct benefit from the abolition of wages councils. We found no evidence of any increase in economic efficiency, of any increase in total numbers of jobs in the industry and yet, at the same time, there was significant evidence of an extension of low pay". Such quantitative research is more significant in a debate such as this—I do not doubt that one of his constituents went to the hon. Member for Thurrock—but it is more likely that there will be no real impact on job creation by the abolition of wages councils.

Mr. Janman

rose——

Mr. Wallace

The hon. Gentleman spoke for well over 20 minutes.

There is some evidence that the volume of trade is far more important than pay in determining employment levels. Eighty six per cent. of workers in sectors that operate under wages councils are in markets in which there is no international competition. That is significant. It means that, therefore, all companies are operating within the same rules. It is not as though they have been disadvantaged by foreign competition.

It is difficult for me to try to find 10 or 15 minutes to have a haircut. I do not believe, therefore, that, after 1992, and the completion of the Channel tunnel, hairdressers or barbers in London or in Cornwall or Shetland will be in competition with barbers in Calais, or even barbers in Seville. The argument that companies affected by wages councils would be competitively disadvantaged does not stand up.

Hon. Members must examine the Government's own admissions in the consultative document. They tell us that the 1986 legislation required councils determining minimum rates to consider the employment effects of their decisions in areas where workers are generally paid below the national average for their trade or occupation. In other words, since that became law, wages councils have been obliged to consider the employment effects. Yet the same consultative document complained that the 1986 changes had not had the desired effect because in the first year the average increase in wages council settlements was 8.6 per cent. and in the second year it was 6.3 per cent. The Government are not complaining because the figures are too low. Surely, having given regard to employment effects, the wages councils have decided that they have no effect on unemployment; or the wages councils have not been fulfilling their statutory duty. If that is the Government's allegation, they should have the guts to make it in a more forthright manner.

The Government have a blinkered approach, in spite of everything that has been set up to keep up the charade of consultation. The whole document has one conclusion—that the Government are intent on abolishing wages councils. Paragraph 16 refers to anomalies. There are anomalies in respect of people who work in laundries. They are covered if washing is done manually, but not if it is done by machine. The Government's attitude is to abolish the wages councils to resolve the anomaly. No Conservative Member has thought to say, "There is something wrong with the pay of those who work in launderettes. Should not the argument be to extend the scope of wages councils?"

The one statement with which I agree is that: The world of the 1990s will be very different from that of 1909. Although I agree with that statement, I draw some different conclusions.

The hon. Member for Oldham, West (Mr. Meacher) has already quoted Winston Churchill on the introduction of wages councils. The Secretary of State's response was pretty feeble. He could at least have tried to explain that away by saying that at that time Churchill was a Liberal. Nevertheless, ever since then, Conservative Administrations have followed the policies that the 1909 Bill introduced.

Mr. Ian Bruce

Can the hon. Gentleman name a single wages council whose minimum wage is generous or even average? Surely all wages councils have helped to ensure that low wages are perpetuated and institutionalised.

Mr. Wallace

The hon. Gentleman misses the point. Obviously one would wish to see even higher wages, but if we abolish wages councils the chances are that wages will be driven even lower. Even the CBI, responding to the 1985 proposals, expressed fears about the abolition of wages councils because it foresaw companies undercutting companies and small businesses undercutting small businesses, leading to job losses rather than job creation, and implicit in that was the driving down of wages.

In 1909 Churchill saw wages councils as being a means of protecting those whom we believe to be the most vulnerable and most likely to receive low pay. The work patterns of the 1990s will undoubtedly produce employees who fall into that category, not least the young, those in part-time employment, home-based workers and the new army of low-paid cleaners employed by private companies to clean our hospitals and local authority premises. Rather than considering the abolition of wages councils, we should be considering their strengthening and extension.

Any hon. Member, particularly any Conservative Member, who doubts whether we still have vulnerable and low-paid people as we approach 1990 should read an article in the Financial Times on 14 October 1988 by Mr. Jimmy Burns. It describes the plight of a woman whom he cannot even name for fear that her employer would find out. That woman works at home in Birmingham as a seamstress for about 56 hours per week and receives £20 to £25. She was unsure of her employment rights and even who her employer was.

Mrs. Mahon

I can top that example. I am involved with a group of home workers who have been receiving as little as 24p an hour for packing Christmas cards for Woolworths. To date, Woolworths is refusing to see them, even though those workers have been trying to arrange a meeting for three months.

Mr. Wallace

The hon. Lady underlines the point that we still have in our midst vulnerable people who, because of their position, can be exploited by means of low pay.

Just before the passage quoted by the hon. Member for Oldham, West, Winston Churchill said: It is a serious national evil that any class of His Majesty's subjects should receive less than a living wage in return for their utmost exertions." —[Official Report, 28 April 1909; Vol. 1V, c. 388] All Opposition Members would endorse that sentiment.

If one were to ask, as I think the hon. Member for Dorset, South (Mr. Bruce) tried to do, whether the abolition of wages councils would help improve the circumstances of those people to whom I and the hon. Member for Halifax (Mrs. Mahon) referred, I could not agree that they would be helped in any way. The economic case for abolition has been asserted by the Government, but as a Scots lawyer I would not even be generous enough to give them the verdict of not proven. They have come nowhere near to backing up their assertions with any well-argued economic case.

The existence, even in 1989, of vulnerable low-paid workers is argument enough not only for the retention of reformed wages councils but for their extension, backed up by a well-resourced inspectorate so that their orders can be guaranteed. In that way we can try, albeit in a small way, to raise the level of expectations of pay of many people in Britain who are still paid a ridiculously low amount and who, if the economy is succeeding as well as the Government claim, deserve to share that much more in the benefits of it.

8.14 pm

Mr. John Redwood (Wokingham)

My right hon. Friend the Secretary of State rightly concentrated on the progress that has been made thanks to the economy's vitality under the Government's enterprise policy. The 30 per cent. real increase in earnings at the lower level is in stark contrast to the 1 per cent. or 2 per cent. real decline recorded in the Labour years in the 1970s. But what matters most is whether people believe their take-home pay is fair and, most especially, whether they believe the stoppages out of their gross pay are fair, taking into account the need for public services and relative income levels within society.

One reason why there has been such progress in improving the take-home pay of people in the lower pay bands is that the Government have been prepared to cut taxes across the board and, in certain Budgets, to concentrate on cutting them in ways which help those at the lowest end of the income scale.

Ms. Short

We all know that the hon. Gentleman prides himself on being a great intellectual. Therefore, I am sure that he will confirm that the Government's tax take since they came to power in 1979 has increased. It has simply moved from income tax to VAT and national insurance. I am sure that the hon. Gentleman knows that that is true and will confirm it.

Mr. Redwood

The hon. Lady is missing the point. I am talking about incentives to work and the level of stoppages from pay. I am about to illustrate that there has been substantial progress, as she should know.

The standard rate of income tax has been cut from 33p in the pound to 25p in the pound. A new level of national insurance contribution has been brought in at only 5 per cent. on lower earnings—a big improvement on the position when the Labour Government left office. There has also been a substantial increase in the real value of thresholds before people start to have to pay income tax.

Those three elements create incentives to work. They create more jobs and enterprise in the economy. That is why there is so much growth in the economy which has enlarged the prosperity of everyone and has produced startling increases in real take-home pay after allowing for all kinds of taxation in the economy and its impact upon purchasing patterns.

I want to urge the Government to continue in two directions. First, I agree that we should not give up on deregulation. That is an important part of the enterprise policy. It is the way to create jobs or to avoid the destruction of more jobs—jobs that were destroyed by the policies pursued by the Labour Government.

Secondly, I want to see the Government pursue the policy, between the Department of Employment, the Department of Social Security and the Treasury, of cutting taxation, especially for those on lower pay, in the next Budget.

I want to illustrate my point by showing the current system and then sketching out some ideas for improving it still further. I preface my statement about the current position with the overriding comment that at every level of income, especially those affecting the lower paid, the position is so much better today than it was in 1979.

Mrs. Mahon

May I challenge the hon. Gentleman on that by citing an example of one group of 250 workers in my constituency who, because of the Government's privatisation policies in the NHS, lost one quarter of their pay when they were taken over by a private company and they also lost out on holiday pay, pension rights and sickness benefit. They had a reduction in pay of 25 per cent. and the work force was halved. Does the hon. Gentleman agree that they are not better off than they were in 1979?

Mr. Redwood

I would need more information on their rates of pay in 1979, their agreements, the nature of the incentive and bonus arrangements, and so on. However, the hon. Lady is straying from my point. I am talking about the tax system and the marginal rates of tax that hit people with different levels of income.

Under today's system, people earning up to £43 a week are not taxed. At £43 a week people start to pay a 5 per cent. national insurance contribution over the full range of their earnings. At £53.37 a week a single person starts to pay 30 per cent.—25 per cent. income tax and 5 per cent. national insurance. At £75 per week, the national insurance rate increases by two points, producing a new overall rate of 32 per cent. At £115 per week, one reaches the full rate, before reaching the higher rate of tax, of 34 per cent.

While those rates reflect an improvement on 1979, this year's Budget will give scope for more progress along the road of reducing the level of stoppages for the lowest paid. The best way of doing that, targeted most accurately at the lowest paid, is to raise the threshold at which national insurance is payable. The answer I received from the Treasury is most illuminating. I asked what would be the revenue costs of raising class 1 contributions from £43 to £55 per week. I was told that, given the way in which the rebate system worked, there would be no loss to the Treasury.

Another way of helping the lower paid that is often urged upon the House is raising thresholds and the level at which one begins paying income tax. That approach is not as well targeted because increasing the threshold helps people on high salaries more as they benefit from a reduction linked to the 40 per cent. tax rate rather than the 25 per cent. rate.

Another way of helping everyone, including the low paid, is to reduce the standard rate of tax. My own estimates and Treasury costings indicate that, this year, we could have £4,000 million to give back to taxpayers and still run a very prudent budget—by which I mean repaying more than £10,000 million of public debt, which is what we ought to do for other economic reasons.

Such an approach would give us scope to raise thresholds by between 7 and 10 per cent. If we raised tax thresholds by 10 per cent., it would cost only £2,000 million in 1989–90. It would enable us to cut the standard rate of tax by another 1p on the road to a rate of 20p in the pound, which I hope we shall reach in 1991. It would also leave us free to make a substantial increase in the national insurance threshold. Why not increase it to £70 or £75 per week? We could certainly raise it to £55 or £60 without creating any great revenue problems.

As for income tax, it is important to continue stressing that lower income tax is good for the economy as a whole, is good for incentives, and means that people at all but the lowest income levels can keep more of the money that they earn. Lower tax rates affect the pattern of part-time employment, and attitudes towards bonuses, promotion, and seeking better job opportunities. We wish to continue fostering an enterprising and prosperous economy in which people will take the opportunities that are now so visible across the width and breadth of the country, in the north as well as the south, the east as well as the west.

The type of scheme I have outlined would mean that people earning up to £50 or £60 per week would pay no tax or national insurance. Above that level, they would begin falling into the income tax net at a rate of 24p in the pound. At a higher level still, they would begin paying national insurance at the rate of 5 per cent.—a combined rate of 29 per cent. The maximum rate, until they achieve the highest income levels, would be 33p in the pound—but that point would not be hit until they were earning well over £100 per week.

Such an arrangement would give people more incentive and have an impact on the labour market. It would encourage more people to enter part-time work. That is particularly relevant at a time when many women wish to return to work. They do not necessarily wish to be employed full time, particularly if their children are still at school, but are deterred from working for as many hours as they would like, or from working at all, by the impact of national insurance contributions and taxation on their take-home pay.

The changes I suggest would have pleasant consequences for the problems of the National Health Service. As many right hon. and hon. Members know, over the next 10 to 15 years, the Health Service will have to confront the problem of an insufficient number of male and female school leavers to enter nursing. Recent figures show that the Health Service will have to attract an unrealistically high proportion of school or college leavers. The nursing work force will have to expand by drawing on part-time labour among married women wishing to return to the profession, or who may wish to train for it for the first time. They should be welcomed, and that necessary process of adjustment could be helped by suitable changes in the tax regime.

The message is: so far, very good. There has been progress for the lower paid of a kind not seen in the 1970s. There has been progress for the enterprise economy as a result of our sticking to our guns and going for deregulation, freeing of the labour market, and lower taxation. Now that the economy has such enormous strength, as measured by the large public sector surplus, let us by all means have a prudent Budget—but one that serves the lower paid by taking more of them out of the tax net altogether and continues the progress made towards a still lower rate of taxation.

8.25 pm

Mr. Ron Leighton (Newham, North-East)

The House must be struck by the growing disparity and the widening extremes between wealth and poverty that disfigure our society, and by the growing divide between those at the top who have too much and cannot possibly justify what they take out of society, and those at the bottom, who suffer deprivation to an extent that disgraces a modern economy.

I approach this matter not just in economic terms but as a question of morality. There is no economic justification for such contrasts of income, which do not reflect how hard a person works. I shall give an example that might appeal to the Secretary of State. Ex-Cabinet Minister Sir John Nott received—I shall not say earned—more than £870,000 in 1987. Presumably, this year the figure will be about £1 million. What contribution has he made to society to deserve that income? Are we to assume that he worked 20 times as hard as a Cabinet Minister? Does Sir John work 20 times as hard as the Secretary of State? If not, why is he paid 20 times as much?

It seems that what people take out of society bears little relation to what they put into it. Nowhere is that more glaringly obvious than in the case of the low paid. They live in poverty, yet often they are among the hardest working of all. They are fellow citizens who earn their poverty, and it is wicked that deliberate divisions of society are being deliberately exacerbated.

We have already seen the abolition of the fair wages resolution and of schedule 11 to the Employment Protection Act 1975. We have seen the low level of YTS allowances and the young workers' scheme, which actually subsidises employers to pay low wages—putting the young generation in a straitjacket of low pay. To all of that is added the attack on wages councils. The Government's official policy is to force down wages, to price the poor into jobs. It is no wonder that social divisions are growing wider. The poorest one fifth of wage earners earn less, relative to the average wage, than they did 100 years ago, whereas the better off enjoy a continued improvement.

Since 1979, income increases for the highest paid fifth of men have been 50 per cent. higher than those for the lowest fifth. The better off—and this will appeal to the hon. Member for Wokingham (Mr. Redwood)—have seen tax cuts lavished on them. Last year saw tax cuts for the rich and benefit cuts for the poor. Last year also, Hay Management Consultants, which is a division of Saatchi and Saatchi, reported that, on average, executives earning an average of £87,000 per year saw their salaries increase by more than 31 per cent. These ugly divisions disfigure our society. They create poverty amidst plenty.

The rewards of society are increasingly being unequally divided—and that has been particularly true since 1979. The low-paid need large increases if they are to return to the relative standing, in relation to the better off, that they had when the Government took office. But what will they get? The abolition of wages councils, which is bound to depress the wage levels of the low paid even more. That is a scandal and a disgrace. I suppose that the people who dream up such ideas go to church on Sunday.

The Opposition have had to give up their Supply day and valuable debating time to defend the weak and vulnerable at the bottom of the pile, who at present are afforded a measure of protection by wages councils.

From the consultative document, it is clear that the Government propose scrapping wages councils. We have been round this course before. The Government did exactly the same in 1985. Because of opposition from the Select Committee which examined the matter, from many employers, from many Conservative Members and from others, the Government backed off. They made changes instead. In the Wages Act 1986 they excluded young people and they restricted the wages councils to setting a single minimum rate and a single overtime rate.

Now, three years later, they are back with a second attempt to abolish wages councils. Why? It is for the express purpose of forcing down some of the lowest wages. What are these rates? They are set out in the consultative document. The lowest rate is £1.88 an hour, which I worked out as £75.20 for a 40-hour week; the top rate is £2.38 an hour. Is it not nauseating for Cabinet Ministers earning £1,000 a week to suggest that these poverty wages are too high? Yet the only purpose of abolition is to make it legal to push these pitiful rates down further. The consultation paper makes it clear in paragraph 14: Moreover, a substantial proportion of workers covered by the councils—probably as many as one third—continue to be paid on the minimum rate. Such clustering of pay levels around a particular figure is evidence that council minima continue to be above the levels required to fill jobs. That is the reproach and criticism of the consultative document. That is the Government's reason for scrapping wages councils. It is deliberate Government policy to depress these pitiful poverty wages even further. It is wicked and immoral.

The crude, loony Right, ideological argument against wages councils is that they are an institutional intervention in the labour market, raising wages above the clearing rate. But nearly all pay is determined by institutional intervention setting minimum rates. For most people it is called collective bargaining. Why should only the lowest paid, those in wages council industries, be singled out for such treatment? For example, the pay of admirals, generals and judges is set not by the law of supply and demand but by institutional intervention, no doubt with regard to fairness and equity. What of Members of Parliament? There is a huge supply queuing up which greatly exceeds the demand for 650 jobs. What would be the market clearing rate? It would probably be nil. Instead, the pay of hon. Members, like that of most other people, is decided by institutional intervention. How hypocritical it would be to single out only the lowest paid for this grotesque ideological extremism.

In 1985 a Select Committee investigated the matter thoroughly and recommended against abolition. There is no evidence that wages councils have caused unemployment or inflation. No one can say that the pay of workers in the wages council sector has risen relative to the pay of others. The reverse is true. I am sure the Secretary of State knows that the CBI said, in its recent review of the working of the Wages Act 1986: For the most part, the minimum rates set by wages councils and wages boards rose no faster, and in many cases slower, than average basic earnings…across the economy as a whole…statutory minimum rates declined from 58.9 per cent. to 57.5 per cent. of the average basic earnings for manual men across the economy as a whole between 1980.81 and 1987.88. When the Select Committee examined the position, it could not find any clear or unambiguous evidence that scrapping wages councils would create more jobs. Wages are lowest in those parts of the United Kingdom where unemployment is highest, and vice versa. Wages are higher in successful industries. If low wage rates create jobs and economic success, why do our most successful competitors pay higher wages than we do? I studied all the evidence in 1985 and it is clear that there is no intellectual case for abolition. It would be a triumph of dogma and ideology over evidence, facts and common sense.

All this has to be seen as part of a package of measures to depress the pay of the poorest, including a requirement on local government to put contracts for services out to tender to private firms. The abolition of the fair wages resolution, schedule 11 and now wages councils will prevent local authorities from insisting that firms observe fair wages and decent employment practices. This will permit a spiral of wage cutting, with firms competing to see which can pay the lowest wages. We want competition right across the economy but on efficiency and levels of service, not on which firms can pay the lowest wages.

What happens if wages are forced down so low that workers feel that they can no longer tolerate their jobs? The Government have legislated for that. If a worker leaves, it will be considered as a voluntary action and he .or more probably she.wll be disqualified from unemployment benefit for long periods. Therefore, the less-scrupulous employer can force down wages, knowing that many workers dare not leave. All the cards are being stacked against the poor, the low paid and those at the bottom of the pile. Instead of giving them a helping hand, the Government will push them down even lower.

Those on low pay are not the people who are causing problems for the economy. Instead, they need and deserve the protection of Parliament. In pre-Thatcherite times Parliament sought to give protection to those who could not protect themselves, such as people in wages council trades. Those people are overwhelmingly women, so this is a major women's issue. Often they are part-time workers; often they are from ethnic minorities; often they are in scattered small units, weak and vulnerable, with no union or collective agreements.

For a long time, under legislation brought in by Winston Churchill, Parliament sought a level beyond which the poor would not be exploited. The object was to safeguard weak employees, and equally important responsible employers who sought to maintain decent business standards from unfair competition based on wage undercutting. Everyone who works for a living has the right to a wage which safeguards health and human dignity. To carry out the destruction of wages councils the Government have had to denounce convention 26 of the International Labour Organisation. We are now virtually alone in the industrialised world. We are the only country in Europe without minimum wage protection.

It is sometimes said that wages councils are old fashioned and an anachronism, established to deal with the sweated trades, and that they are unnecessary in modern times. Alas, that is not so. The sweatshops of the east end of London employed successive flows of immigrants, at one time Jewish. We have had immigration more recently. Coming from the east end of London, I can assure the House that there are sweatshops there now. We are not talking about distant history.

Recently, we had the report of the Auld committee which was set up by the Government to study shops legislation. It strongly recommended the retention of protection for shop workers because of the strong likelihood of exploitation of some shop workers in the form of lower wages, particularly for unsocial hours, and possibly in the longer working week. Although it was not asked to look at wages councils, the Committee volunteered some information. I remind the House that this was recently, and not when Winston Churchill brought in the legislation. The Auld committee, appointed by the Government, set great store by the preservation of the role of wages councils in fixing…holidays and holiday pay for the retail trade. So there can be no doubt about the need for wages councils in modern Thatcherite Britain, especially for women, for part-timers, for home workers, or for those working in hotels, catering, retailing, clothing or hairdressing.

When we last considered the matter, the hon. Member for Banbury (Mr. Baldry), who is not in the Chamber, produced a pamphlet for the Bow Group which made a recommendation against the abolition of wages councils. He argued, among other things, that if the Government abolished wages councils, that would be construed as an excuse for the next Labour Government to introduce a statutory minimum wage. He made a good point, for one of the main duties of a new Labour Government will be to bring in a proper statutory minimum wage and employment protection for this badly exploited section of the work force.

8.40

Mr. Ian Bruce (Dorset, South)

I was interested to hear the hon. Member for Oldham, West (Mr. Meacher) say that Labour Members were passionately interested in the problems of the low paid and were willing to give up their time to debate the subject. It is nice to see eight Members on the Labour Back Benches. At least they feel the need to be in the Chamber to debate a subject chosen by their party for debate today.

Ms. Short

There are more of us than there are on the Government Benches.

Mr. Bruce

I have always believed—even when I thought I was a Socialist—in a high wage, high productivity economy. [Interruption.] When I thought I was a Socialist I was very young; some of us grow out of such feelings. As a lad of 12 or 13 years working in the sweat shops, I thought that possibly the way forward would be via the wonderful mechanisms to which the unreformed Socialists on the Opposition Benches still cling, as though, like children playing with baubles, such mechanisms will achieve their aims. We are told by Labour Members that the present state of affairs facing the low paid has been in existence for years. Not one Labour Member is able to say that a wages council negotiated rate of pay is even an average rate of pay. They are all low rates of pay.

Ms. Short

Very low.

Mr. Bruce

Very well, very low rates of pay. I have to agree with Labour Members, and that is why, when I believe in a free enterprise, high wage, high productivity economy, I must consider what sort of mechanisms work and how we should go forward. How do businesses in a free enterprise economy start and develop?

Mr. Wallace

The hon. Gentleman will have heard the hon. Member for Newham, North-East (Mr. Leighton) quote from paragraph 14 of the consultative document,which said: Such clustering of pay levels around a particular figure is evidence that council minima continue to be above the levels required to fill jobs. That means that, without wages councils, wages would be even lower. Is that the outcome the hon. Gentleman wishes to see?

Mr. Bruce

I speak as a wet-behind-the-ears new Member. But for a dozen years I ran an employment agency and dealt with staff, some of whom had the so-called protection of wages councils and some of whom had not, and I can best answer the hon. Gentleman's question by considering which of those groups was better off.

Hopefully, all hon. Members believe that people in receipt of low pay need to be helped— [Interruption.] I dare say that many Labour Members believe that passionately, even if at present they are in the Tea Room.

My hon. Friend the Member for Wokingham (Mr. Redwood) spoke about helping the low paid, and we must consider how to improve their situation. I am surprised that Opposition Members do not spring to their feet to declare that the 30 per cent. real increase in the wages of the low paid is good but that we need to do better. I could go down that road with them. But they constantly criticise a Government who, while they may not have done brilliantly for low-paid people., have achieved 30 per cent. more for them than the policies of the unreformed Socialists were able to achieve. Having achieved a 30 per cent. improvement, let us consider how we can further improve matters for this group of workers.

Hon. Members have quoted from documents prepared by employers' organisations. Who will now say, "We don't worry too much about the existence of wages councils because they do not make much of a problem for the wages market or artificially inflate wages"? I agree that they do not artificially inflate wages; one need only look at the rates of pay that they achieve.

Mr. Robert N. Wareing (Liverpool, West Derby)

The wages are depressed.

Mr. Bruce

Yes, they depress them. I have got through to the hon. Gentleman, who is occupying a position on the Labour Front Bench. He agrees that wages councils depress wages.

Mr. Wareing

Not at all.

Mr. Bruce

I apologise to the hon. Gentleman. I thought he was agreeing with me.

We must consider what wages councils have achieved and why employers think that they are not worth doing away with by the Government. The Government have not announced that they are abolishing wages councils, despite many of my hon. Friends and I urging them to do so. They have decided not to do away with them at this stage because they do not believe, from a philosophical point of view, that there is much to be gained from taking that step. They do not feel that the actions of wages councils are distorting the economy enormously.

I believe that wages councils are depressing wages and are institutionalising people in low-paid groups. That must be true because of the way in which wages are low under wages councils. [Interruption.] Labour Members have been saying all day that wages are low under wages councils, and then they defend wages councils for defending the low paid.

I had the good fortune of running an employment agency in Yorkshire for 12 years during a time when many people were being put out of work. Many of those with whom I was dealing worked in the aerated water industry—fizzy pop to us—and they were "protected" by wages councils. I know from practical experience about the way in which wages were negotiated for the temporary staff I was putting into those companies compared with temporary and permanent staff who were going into other companies.

Unfortunately, employers sometimes wear blinkers. They consider negotiations for a minimum wage that go on year after year knowing that all such negotiations tend to work on the basis of seeing what can be paid by an employer who is not making much profit. People get together in wages councils and say, "We cannot go too high because this company is not doing too well, so it cannot afford this or that." Accordingly, they allow a small increase, perhaps just ahead of inflation—but never much ahead of it—to reward and keep the work force.

An employer would come to me, aware of young workers' terms and conditions, and say, "We would like you to recruit people of a lower age because we can pay them a lower rate and you can quote a lower rate to us." That was an employer talking to an agency, negotiating freely on the basis of an institutionalised form of wage negotiation.

I contrast that state of affairs with one of my other large groups of workers, secretarial staff who worked for me in Huddersfield. When I first opened my employment agency in that town I had to pay my staff unacceptably low rates of pay; to be competitive, I had to go against others in the same town, though I was able to pay my staff perhaps 10p an hour more than my rivals down the road. By slashing my margins and being efficient and working hard, I was able to put these people out into the market place at approximately the same rates that employers were paying previously. I was successful in putting my rivals out of business.

What did I do then? Did I screw down the wages of my staff? No, I could go to my staff and say, "We can increase your wages that much more this year." As an agency, over two or three years, we increased our rates every three or six months. We moved the market place upwards. We could go to employers and tell them the going rates. We made more profit and our employees received more money. Those companies did not have as a reference point the rate specified by that nice wages council. They could not say, "Hang on a minute, the wages council says you should give them £1.50 an hour. How dare you give them £1.70?"

Mrs. Fyfe

While the hon. Gentleman was overwhelming his secretarial staff with a whole 10p an hour more than their low-paid colleagues, what was he paying himself?

Mr. Bruce

In my first year of self-employment, I paid myself nothing and my company lost £9,000. That figure comes from audited accounts. Although after 10 to 12 years I made a reasonable return, in the first year—which is what the hon. Lady was asking about—I lost money.

Mrs. Fyfe

On the assumption that the hon. Gentleman is not a philanthropist and had calculated that he would make a good profit eventually, what did he earn in the remaining years?

Mr. Bruce

In the remaining years, I made a substantial profit and sold out at an extremely good price to somebody who continued the business. I was, therefore, able to come to this place and manage on a modest salary for which I work extremely hard. I enjoy doing my job, however, and enjoy debating with the hon. Lady.

As a young person, I remember one of my first full-time jobs was working in the laundry industry. I also recall harshly having to negotiate my wages with my father, who was the manager of that business but not the owner. I was told that the rate that I was receiving was the right rate for a young person and that I should look at the rates published by the wages council. However, there were other people doing not such a good job as me. I was more productive than they were, but I was constantly being told, "Look, there is the rate on the wall. That is what you will get. Although you may be worth a great deal more, we are not going to deviate from the rates of the wages council." I do not believe that the wages council does anything other than institutionalise and give a lower norm for wages.

I believe that it is important how businesses start and how they go on. Again, I shall speak from my experience, because that is perhaps more valuable than all the theoretical arguments that we have heard.

Ms. Short

Other hon. Members wish to speak.

Mr. Bruce

I know that the hon. Lady wants to speak. I certainly do not want to detain the House for too long.

I remember starting my business and having only a small amount of money. I was made redundant under the Labour party.

Mr. Nellist

We got something right then, did we?

Mr. Bruce

Absolutely.

I started my own business and I needed to recruit people. I had a limited amount of money with which I could recruit people and found that the best people available who were willing to work for the low wages I was able to offer tended to be graduate women who had been pushed by history into secretarial jobs and were interested in achieving a more executive role.

I do not believe that an employer, working with his employees and doing the best for his business, puts on blinkers—which the Socialists tell us they do—and tries to force down wages. As my company succeeded, so did my staff. I took people on at low wages—if there was a wages council for executive or secretarial recruitment staff, possibly they would have been illegally low wages—but within two years, when the company became profitable, the wages of those staff were doubled.

After five years the salaries which I was paying my people in Huddersfield were second to none, as were the incentives. We could recruit the best people for the job. I am glad to say that the vast majority of the people we recruited were still graduate women who had never had the opportunity of working and developing their abilities in a good business.

If we want to ensure that everybody has the chance of a job, it is essential that companies should be able to pay what they can afford and thereby develop their businesses. When one looks at the way wages have developed, one sees that, when low pay becomes institutionalised and formulated, as it is by the wages councils, that is the time when people get stuck with low wages, and there is not a high wage and high productivity economy.

My hon. Friend the Member for Wokingham (Mr. Redwood) has the amazing knack of getting Opposition Members to listen to his speeches. He made an excellent speech. He gave hon. Members a carefully researched list of how we can help precisely—through our taxation system and especially our national insurance system—to improve the lot of low-paid people. The threshold of national insurance contributions can be an effective method of helping the low paid without improving enormously the lot of those people who are on higher rates of taxation. I believe that his speech should be wrapped in glossy paper and sent immediately to the Chancellor for his consideration.

When the Labour Government put a national insurance surcharge on employers, that was a tax on jobs. It has been reduced slowly but surely during the Conservative Government. We have demonstrated that employers can create additional jobs. I believe firmly that to allow people to get back into employment and to help them by way of low taxation and national insurance is an excellent way forward. I commend the speech of my hon. Friend the Member for Wokingham to the House.

I have heard nothing from Opposition Members that could possibly help low-paid people. I believe that Opposition Members should stop talking rhetoric and consider the practicalities behind their suggestions. The Government have already improved low-paid people's take-home pay by more than 30 per cent. during their period of office and we have demonstrated the way forward. I am confident that the Government will introduce further measures and will tackle the problems of wages councils, which will ensure that in future low-paid people will have an improvement in their standard of living.

8.58 pm

Ms. Clare Short (Birmingham, Ladywood)

It was extremely generous and tolerant of you, Mr. Deputy Speaker, to allow the hon. Member for Dorset, South (Mr. Bruce) to tell us the story of his working life. I am sure that we all found it of interest, but whether it was relevant to the debate is another question.

I am sure that everyone would agree that the speech we witnessed tonight from the Secretary of State was remarkable. It was full of bluster, and it avoided the issue of low pay and the statistics that demonstrate, unequivocally and unquestionably, that there has been a massive growth in the number of people working for poverty wages since the Government came to power. The right hon. Gentleman made some extremely misleading claims about the levels of income and unemployment in our country. Before I talk in detail about low pay I want to put some facts on record.

We should have political differences in this Chamber and we should debate them honestly, but it distresses me greatly that Conservative Members deliberately fabricate facts and they know that they do it. They distort statistics and go from the handouts they get from Central Office. They know that the Government have followed a strategy of encouraging low pay. Those Conservative Members who have spoken may pretend that that is not so—some of them might be stupid, but others are dissembling. They know the Government's strategy and not to admit it openly is to be dishonest with the House and with people.

Reference has been made to the effects of tax and benefit changes since the present Government came to power. John Hills of the London School of Economics recently provided us with an analysis of the combined effects of changes in tax and social security during the past 10 years. His analysis, as quoted in The Observer, found: 'the cuts in direct taxes have been entirely paid for by cuts in the generosity of benefits.' There has thus been 'a major redistribution from those on low incomes to the better off', with the bottom 50 per cent. of families losing an average of £8.50 a week, while the top 10 per cent. have gained nearly £40 a week per family. By comparison with what would have happened if the 1978–79 tax and benefit levels had been uprated in line with the growth of national income, Mr. Hills states. "the bottom half of the population has lost £6.6 billion, of which £5.6 billion has gone to the top 10 per cent. Indeed,£4.8 billion has gone to the top 5 per cent.' Such are the statistics when we talk about tax and benefit changes.

The other misleading statistics given at great length by the Secretary of State concerned levels of unemployment. We all know that during the famous general election of 1979 when we had those Saatchi and Saatchi posters saying "Labour Isn't Working", unemployment was 1.2 million—as calculated on the old method. At that time the Tory party said that unemployment was too high, and we agreed. The Government then took power and induced a recession in our country and the destruction of our manufacturing capacity from which we are only now beginning to recover in terms of investment levels. Because of the Government's ideological commitment to monetarism they destroyed, virtually overnight, 2 million jobs. Those jobs were largely held by males and represented relatively well-paid work in manufacturing.

Mr. Ian Bruce

rose——

Ms. Short

We have had the story of the hon. Gentleman's life, thank you very much.

We have still not returned to the 1979 level of employment. The Government have suddenly ceased to talk about 1979, and 1983 has become the bench-mark. We have been told over and over again about the 1 million new jobs that have been created.

There is no doubt that since 1983 there has been some job creation, but there is also no doubt that there has also been an enormous distortion of the unemployment figures. The new jobs that have been created or generated since 1983 have been overwhelmingly low paid, part time and for women. Women want jobs and want more employment, but they do not want low paid, insecure employment. We are faced with a continuing decline in full-time, reasonably paid jobs for men and some growth since 1983—it does not take us back to 1979 employment levels—of low paid and largely part-time work for women. That is what the statistics tell us about the national economy.

Mrs. Mahon

My town is a typical example of what has happened since 1979. We have lost thousands and thousands of well-paid, skilled jobs in manufacturing. What we got in return was demonstrated by a survey last year of the jobcentres—jobs offering £1.20 an hour for cleaners and £1.75 an hour for looking after the elderly. A lot of the jobs on offer are temporary and are extremely low paid. That is what we have had in exchange for the jobs lost. I also saw the Secretary of State's nose grow by at least six inches when he was talking about the unemployment statistics.

Ms. Short

My hon. Friend paints a picture of what is happening across the country, including the so-called prosperous south-east. The south-west has some of the worst low pay in the country in agriculture, tourism, and so on. I am putting those facts on record because we hear so many falsities and distortions from Conservative Members.

I do not know how the Secretary of State has the brazen cheek to make claims about comparative unemployment statistics. The labour force survey shows that more than 5 million people in our country would like a job if they could get one. Of course they are not all included in the unemployment figures. That has never been the case. The International Labour Organisation recommends a statistic to give us a comparison across the OECD. That shows that the last published unemployment figure was more than 3 million. The other statistics are the fiddled figures that the Government put forward.

Although a great many jobs have been restored, we are still not back to 1979 levels of employment. There has been an enormous shift from the poorest to the richest through tax and benefit changes.

Since 1979, 2 million more people have become low paid in Britain. To our shame, 9.8 million workers in Britain or 47 per cent. of those who are in work are low paid according to the Council of Europe decency threshold, which is the enormously generous figure of £3.80 an hour or £144 a week.

Tory Members do not understand that poverty is relative. Obviously the minimum levels of pay for the poorest people would not be the same in a poorer part of the world. Britain is the 15th richest country in the world, but we should have some decency between the top and the bottom so that all our citizens can participate in the dignity of belonging to society in the way in which they live and care for their families.

Mr. Ian Bruce

Will the hon. Lady give way?

Ms. Short

No, I will not give way to the hon. Gentleman.

The Government have been enormously successful. They set out to encourage low pay and they have succeeded by 2 million extra workers. Many people live on benefits, and the benefits are much less generous than they used to be. Many unemployed people wish that they were employed and millions of people work for their poverty in Britain today.

Is it just nastiness? Are the Government just vile? Do they simply believe in inequality for its own sake? Do they want to help their rich friends and trample on the others? Is that why they do it? Some of that is true. The Government have all those instincts, but that is not all. The Government have an economic strategy. It was called monetarism and it was about creating more economic efficiency, the supply-side miracle that we have not experienced but were told would create more incentives through those who are well off retaining more, earning more and becoming better entrepreneurs, with those who are less well off having less and having to work harder.

The Government deliberately took a whole series of measures to cut the wages of the poorest. They abolished schedule 11 to the Employment Act 1982 and got rid of the fair wages resolution and deliberately used the youth training scheme to lower the expectations of young people. There is no question about it. Had the YTS allowance been uprated by the old YOP levels, it would now be £57 a week. The Government provided subsidies to employers who took on workers on condition that they paid low wages. It was a subsidy not to increase wages but to force them down.

The Government attacked the wages councils and diminished their protection. My hon. Friend the Member for Coventry, South-East (Mr. Nellist) and I served on the Committee which considered the Wages Bill and heard the Government time and again promising to reform the wages councils and retain them. But now we have a consultative paper about getting rid of the wages councils. It is all a strategy to encourage low pay. It has been an enormously successful strategy and the Government have succeeded in increasing the number of low-paid workers by no fewer than 2 million.

I think that that is a nasty strategy, and that people are entitled to say whether they think it desirable. It is an outrage, a disgrace and a hypocrisy for Ministers who are part of that strategy and understand it well to pretend that they are not doing what they are doing. They have taken a series of deliberate and enormously successful steps to encourage low pay.

It is my view and that of most decent people, backed up by all the polling evidence, that an increasing proportion—an overwhelming proportion, indeed—of British people think that our country is too divided and unequal, and like the idea of a minimum wage. The present position is unjust and unpopular. The Government say, "Never mind that so many people are low paid. They can receive family credit and thus will not suffer poverty." But the take-up of family credit at present is about one third—it may be creeping a little higher—so two thirds of those entitled to it are not receiving it.

What is this subsidy? It is a subsidy from the state to inefficient employers. Employers who pay low wages tend not to train or invest, and experience a high turnover of labour. Of course Opposition Members support some such system until there is a decent minimum wage and there is no longer any need to subsidise low wages, but we do not consider it desirable in itself. Does the Secretary of State consider it desirable to subsidise the most inefficient employers in our land?

Beneath all the hoo-ha about the approach of 1992, we find that industrialists in Europe speak of one in three work places on the continent closing down as a consequence. We hear Britain's top industrialists saying that because Britain is less efficient and trains and invests less, as many as one in two work places may close down in 1992. The Government's low-pay strategy means not only inequality and injustice but enormous economic inefficiency.

The Secretary of State keeps pointing out—as though he were terribly clever and understood the position in a way that no one else does—that there has been an increase in participation in the labour force since his Government came to power. That increase has come about because over a long period there has been a growth in female participation, in this as in other countries. A high participation rate, however, is not a measure of high economic development. Some of the poorest countries in the world have even higher participation rates. In the more efficient countries far more people tend to be in education for far longer than in the less efficient. The Secretary of State is unwise, indeed foolish, to keep boasting about our high participation rate. It is a reflection of the low proportion of 16 to 18-year-olds in full-time education, and of the low levels of training and retraining in the course of working lives. I wish that the Secretary of State would understand that.

Mrs. Audrey Wise (Preston)

My hon. Friend has interestingly and correctly challenged many of the statistics that have been given. Would she care to comment on the misleading impression given in the consultative document that very few employers actually underpay—that is, pay rates even lower than wages council rates? The Government claim that, according to the inspectors, only about 3 per cent. of workers are underpaid. If they read their own new earnings survey, they would see that 10 per cent. of female shop assistants are paid less than £2.10 per hour, against a wages council minimum of £2.33 per hour.

Those shop assistants are being robbed in every hour that they work. Why is the Conservative party so uninterested in such disobedience of the law?

Ms. Short

My hon. Friend is right. Conservative Members are hypocritical about law and order. They do not give a damn about breaches of the law in respect of health and safety at work or the wage councils. They do not enforce the law although they know the statistics. Conservative Back Benchers have criticised the Government, even making a Nazi parallel, because a wages inspector dared to call on an employee in Thurrock. Conservative Members are hypocritical about law and order and decent standards of employment.

The country is becoming increasingly aware that the options are low-paid work, short-term schemes or unemployment. In addition, the Social Security Bill demands that people must prove on a weekly basis that they are actively seeking work, regardless of the number of jobs available in their locality. A new provision states that people cannot in future demand the rate of pay that would be offered by a decent employer in their area. The Social Security Bill is another ratchet in the process of encouraging low pay. If we do not get rid of the Government in the meantime, no doubt we shall come back in a year or two's time to say that there are another I million low-paid people in this country and that more than half the work force are low paid.

Mr. Bob Clay (Sunderland, North)

My hon. Friend will be interested to know that a phenomenon that has not been seen for many years in Sunderland is now returning. As the shipyards are running down towards closure, 40 people are now sent by the jobcentre to stand in the road at 5 o'clock in the morning, allegedly to go to Teesside to the ship repair yards, where there is no negotiation with trade unions and the skilled rate is £133 a week. A bus arrives and a chargehand gets off and says, "We want five burners this morning. The rest of you, go home." If the other 35 learn the lesson and do not turn up the next day, they are technically not available for work. That is the position in today's Britain.

Ms. Short

My hon. Friend describes a situation that we increasingly recognise. There has been a tremendous growth of casual and temporary work with a decline in the standard of employment protection that people can expect. The Government think that that is clever, but it is not, because we cannot have efficient organisations unless we have a stable work force with decent employment conditions, democratic work practices and high training and investment levels. That is the only healthy future for the British economy. This short-term, nasty strategy of encouraging low pay is unjust, bad for the low paid and damaging to the future of our economy. People will pay the price in the future and the Government will live to regret their strategy.

9.17 pm

Mr. James Paice (Cambridgeshire, South-East)

Thank you for the opportunity, Mr. Deputy Speaker—[Interruption.] Anyone who has been in the Chamber for the whole of this debate will know that I slipped out earlier only for a few minutes. I have been in the Chamber considerably longer than most Opposition Members.

Mr. Martin Flannery (Sheffield, Hillsborough)

That is a Tory untruth. Everyone knows that it is untrue.

Mr. Paice

If that is an untruth, I should be interested to know what is a truth.

In this debate, Opposition Members have shown again that they do not understand the relationship between pay, jobs and standards of living. They have shown that they know nothing about running a business or about the relationship between costs and sales. If sales go down because costs and prices have gone up, jobs go down. Ultimately, that means fewer people in work and less prosperity. There is a fundamental point that it is sometimes difficult to get across. I often wish that I could speak in block capitals so that the Opposition could understand. Every job has a value that is reflected in the price of its end product. If there is no sale because the price is too high, the job will disappear.

Lord Wilson—often reviled by the Labour party, but at least he won four general elections, which is better than its last three leaders—said that one man's pay increase was another man's price increase. We must understand that.

As my hon. Friend said——

Mr. Nellist

Will the hon. Gentleman give way?

Mr. Paice

Yes. I am not as rude as some Opposition Members.

Mr. Nellist

Given that statement by Lord Wilson, what are the consequences of the wage increases awarded last year to Lord Hanson of 167 per cent. and to Lord King, chairman of British Airways, of 270 per cent.?

Mr. Paice

Those salary increases would have been approved by the boards of those companies. They would have taken the decisions on the basis of the effect they would have on the price of their companies, end products, such as flight tickets. It is the responsibility of each business to take such decisions, not the Government's.

Mr. Patrick McLoughlin (Derbyshire, West)

What would the consequences have been if those companies had gone bankrupt through bad management?

Mr. Paice

The result would have been not just one or two, but hundreds, probably thousands, of lost jobs.

We have heard about the importance not just of gross pay but of take-home pay. Conservative Members have referred to the need to improve the latter, and to the great strides that have already been made.

The decency threshold has been mentioned. It is a European concept that has not been approved by Europe, let alone this country. The decency threshold is 68 per cent. of the national average wage, which rings close to what the Low Pay Unit describes as poverty—an income 40 per cent. above the benefit level. Both statistics suffer from the same fault—they are self-perpetuating.

Mrs. Gorman

Will my hon. Friend give way?

Mr. Paice

I shall not, because I must wind up.

Both statistics are self-perpetuating. If the benefit rate or the average wage increases, so does the percentage. By the very nature of averages, there will always be people below them, so the Low Pay Unit is also self-perpetuating.

I am sometimes worried that the Opposition pretend to be an alternative Government. This evening they have shown that they fail to understand the meaning of running a business. I hope that the House will throw out this absurd motion.

9.23 pm

Mr. Barry Jones (Alyn and Deeside)

The Secretary of State was nettled by the speech of my hon. Friend the Member for Oldham, West (Mr. Meacher) and lost his temper to my hon. Friend the Member for Wolverhampton, South-East (Mr. Turner). He forgot to explain that it was his Government who despatched more than 2 million jobs after 1979, before they began fiddling the falling rates of unemployment, of which they attempted to make much this evening. My hon. Friend the Member for Clwyd, South-West (Mr. Jones) countered with effective European figures. My hon. Friend the Member for Newham, North-East (Mr. Leighton) spoke with the authority of a distinguished Select Committee Chairman. He described the debate in moral terms, and rightly used the word "wicked". My hon. Friend the Member for Birmingham, Ladywood (Ms. Short) put the facts on record.

This debate was preceded by desperate Government filibustering that was flagged by my hon. Friend the Member for Cynon Valley (Mrs. Clwyd) and her concern for the scandalously low pay rates in parts of the Pontypridd constituency. The proportion of women in Mid Glamorgan who earn less than £100 a week is 17.5 per cent. The proportion of men earning less than £130 in Mid Glamorgan is 15.7 per cent., which may be one reason why there is no Minister from the Welsh Office to answer the debate tonight.

The Government claim that there have been a number of requests for the abolition of particular wages councils. But in the non-food wages council, for example, several members of the employers' side have expressed a wish that they should continue, including the booksellers, the Drapers Chamber of Trade, the National Association of Retail Furnishers, the Footwear Distributors Federation, the Radio Electrical and Television Retailers' Association and the Menswear Association. Even the threshold, as it is made out to be in Europe, is problematic.

In my constituency, a man earns £157 a week but receives only £133 per week net. He pays £10 a week for a lift to work, £27 weekly rent, £2 weekly car insurance and £5.63 weekly for a bag of coal. He tells me that he feeds the slot meter about £14 a week. His wife turns off the immersion heater at weekends, when a coal fire heats the back boiler. That family has much less than £100 per week before it pays for food, leisure and holidays. My constituent's wife buys stewing beef at £1.63 a pound. white loaves at 47p, pasteurised milk at 27p per pint and eggs at £1.07 a dozen. All of that mounts up quickly. My constituent's pint of beer now costs 91p. Holidays, new clothes and nights out rarely happen.

In my constituency, female cleaners earn the equivalent of £71 a week for 40 hours. It is little wonder that recently there was a one-day strike as they earn £1.78 an hour. In Clwyd enterprise zone, there are companies that pay £70 to £80 a week to grown men and the female cleaners are employed by a contract cleaning company that undercut its rivals to gain the contract and cannot afford to pay the girls. That is what privatisation is about, as a distinguished trade union official told me.

In that context, what a shabby speech the Secretary of State made. It was a miserable spectacle to observe a British Cabinet Minister who earns a small fortune arguing for what is, in effect, the depression of wages that are already low. His speech had the true whiff of Thatcherism. We know that some Ministers can jet off to Barbados with a first-class British Airways ticket costing £2,316 and, if they wish, can hire a private plane to islands such as Mustique. But those on low wages groan under the weight of higher rents, higher rates, higher water rates and higher electricity and gas bills. None of the speeches made by Conservative Members showed any comprehension of the problems faced by ordinary people on low wages.

I want to give some facts about low pay in the Principality. First, average earnings for men are lower in Wales than in any other region of Great Britain. The incidence of low pay among men is more severe in Wales than in any other region. One in four men in Wales earns less than the decency threshold of £150 per week set by the Council of Europe. Dyfed and Powys counties are at the bottom of the league of male earnings for all the counties of Great Britain. Low pay is a massive problem for women. More than 80 per cent. of women in Wales in manual jobs are low paid and one in five women working full-time in Wales earns less than £100 a week, including one third of those in manual jobs. In my own county of Clwyd, two out of three women working full-time are low paid and one third of those working full-time still earn less than £100 per week.

The problems of low pay in Wales have deteriorated, and the disparity between Wales and the south-east has widened. The proportion of men earning less than £130 per week in Wales is 15.8 per cent., which puts Wales at the bottom of the league—nobody would be surprised if I said the south-east was at the top. I imagine that that is another reason why no Minister from the Welsh Office will answer tonight's debate.

The proportion of women earning less than £100 per week in Wales is 19.8 per cent. I know that the county of Powys shares bottom place with Cornwall in the league table of male earnings in all the counties of Great Britain. According to the 1988 new earnings survey, Dyfed has the lowest level of male manual earnings of any county in Great Britain.

Mr. Redwood

Will the hon. Gentleman remind the House why he and his hon. Friends voted against the tax reductions which have been of great benefit to the lower paid as well as others?

Mr. Jones

The speech made by the hon. Member for Wokingham (Mr. Redwood) was delivered with all the passion of a tired funeral director. It was the sort of speech that I would expect of somebody who formerly worked for Rothschild, who was a fellow of All Souls college and who worked in the policy unit at No. 10 Downing street. None of us was impressed by the hon. Gentleman's over-long speech.

Women in Wales are particularly disadvantaged in the labour market. Six out of 10 women in Wales are low-paid and half work full-time for less than £130 per week. One in five still work full-time for under £100 per week. Average earnings for women are lowest in Clwyd, at £137 per week, which is £13 less than the decency threshold.

Mr. Janman

Will the hon. Gentleman give way?

Mr. Jones

No, I have no more time.

Mr. Janman

I have a genuine question.

Mr. Jones

I wish that the hon. Gentleman had made a genuine speech. I am not giving way to him; time is running out because of the length of his speech.

Over two thirds of women working full-time in Clwyd are low-paid and nearly one in three still earns less than £100 for a full week's work.

The Wages Act 1986 severely weakened the powers of the wages councils to set legal minimum rates of pay for over 100,000 workers in Wales. Over 20,000 young people aged under 21 have been removed from the protection of the wages councils. It is a sad fact that, in 1987, the only office of the wages inspectorate in Wales was closed and the responsibility was transferred to offices in Bristol and Manchester. I imagine that that is another reason why there will not be a Welsh Office Minister at the Dispatch Box tonight.

With the Government planning to abolish wages councils 80 years after they were first introduced to protect workers in sweated trades, about one in eight employees in Wales—over 100,000 workers—are covered by legal minimum rates of pay set by the wages councils. Those people work in 18,000 establishments across the country, in shops, bars, restaurants, cafes, hotels, hairdressers and clothing manufacturers.

The 1987–88 hourly rates of pay set by the wages councils are modest. In the case of clothing the rate is £1.99 per hour; hairdressing, £2.05 per hour; hotels and restaurants, £2 per hour; pubs and clubs, £2.16 an hour; and retailing, the princely hourly sum of £2.33—another reason, I guess, why no Welsh Minister will be coming to the Dispatch Box tonight to reply to this debate.

So, abolishing wages councils and the wages inspectorate, which attempts to enforce the minimum rates, will mean workers at the very bottom of the earnings league having no redress against unscrupulous employers who pay poverty wages. A wise and prudent Secretary of State, a wise and prudent Government, would consider retaining the wages councils system, restoring the powers and coverage lost as a result of the Wages Act 1986, establishing new wages councils in areas that have grown up in recent times—for example, the contract cleaning business—and increasing the numbers employed in the wages inspectorate to ensure effective enforcement of the law. Then they should tighten the rules governing prosecution.

Mrs. Gorman

rose——

Mr. Speaker

Order. The hon. Member is not giving way.

Mr. Jones

They should set penalties high enough to be an adequate deterrent to employers considering underpaying. In addition, a wise and prudent Government would consider publicising in the media the industries covered by the wages councils and their current minimum rates and conditions.

My right hon. and hon. Friends from Wales are deeply concerned that tens of thousands of our fellow citizens do not share, and have no present hope of sharing, in the prosperity of our society. When billions of pounds have been given in tax relief to the richest of British society, and when the North sea still yields billions of pounds to the national Treasury in oil revenues, it is not unreasonable to urge Her Majesty's Government to think again in the interests of the lowest paid and most vulnerable of our communities.

We believe that our case has moral force. I believe that my hon. Friend the Member for Ladywood was right to emphasise again and again in her speech that one of the biggest issues facing our nation is the growing divide between those on low wages, who are under-privileged, and the many millions who are getting quite a lot of the best things available in our modern society. In his speech tonight the Secretary of State made no attempt to address this very real issue. His speech was evasive. It was the speech of a Cabinet Minister who lacked the imagination to understand the predicament of ordinary people trapped on low wages. From no Tory Members did we hear any sympathy for, or understanding of, the families on low wages who are attempting to bring up young children, realising that they are not benefiting from the many good things in life that are now available.

This debate touches as much upon the quality of life as upon the standard of living of the low paid. The family on low wages does not receive the perks of subsidies or expenses. It is really what we might call basement living. It is the harsh world of making ends meet, and this is a Government who do not care about those who are getting a raw deal.

At the heart of this debate is proof of a greatly divided society of debt and of the temptation of petty crime. The Government appear to be interested only in the south-east of England, northern Europe, and the consequences of :he Channel tunnel for the south-east of Britain. Hon. Members know that the Opposition speak for the common people and that the Government are only about the comfortably off. We are asking for social justice for the low paid. We say to the Government, for pity's sake, desist. We demand that these unjust policies are abandoned.

9.40 pm

The Parliamentary Under-Secretary of State for Employment (Mr. Patrick Nicholls)

Obviously, I will deal as best I can with the points that have been made by the hon. Member for Alyn and Deeside (Mr. Jones). My right hon. Friend the Secretary of State for Wales is presently engaged abroad, promoting the interests of the Principality. My hon. Friend the Under-Secretary of State for Wales has been with me for almost the entire debate and has also worked closely with me. I understand the pressures that the Pontypridd by-election places on the hon. Gentleman, but I must make that explanation in response to his somewhat uncharacteristically ungenerous remarks about my hon. Friend.

Many hon. Members have made important contributions to the debate. In the time available, I shall answer as many points as I can.

Certainly, this argument cannot be won solely by bandying around a stream of statistics. Far more important are the positive things that we have done to help those who actually are in need At least two points are crucial to the debate. First, by any definition, there will always be those in society who are lower paid than others, or those who have lower household incomes than other people. Attempts to change that are doomed to failure, and for a good reason: it is impossible to do so. In a society of millionaires, anybody on £500,000 a year would be counted poor. Secondly, it must surely be true that, as a rule, a job is better than no job, and low pay is better than no pay. That is what the Opposition have conveniently chosen to ignore, and that is what the Government are putting right.

Our record in encouraging the creation of more jobs, helping more people back into work, and laying the foundations for a successful and growing economy cannot simply be pushed aside as irrelevant. Furthermore, despite everything that Opposition Members have said, the Government do not ignore the lower paid, the less well off or those households that live on the margins of economic viability. All the evidence bears out that proposition to the hilt. Since the Government took office, employment opportunities have increased by leaps and bounds. Jobs are increasingly available, and so is the training that helps people to get them.

The real blight is not the blight of low pay; it is the blight of no pay at all and the depression and despondency that can go with it. For all their protestations, Opposition Members do no service to the people of this country by crying out for measures that would ultimately deprive many people of the pay that they now have.

Mr. Win Griffiths

Will the hon. Gentleman give way?

Mr. Nicholls

I shall not give way. I have been here for the whole debate. If the hon. Gentleman will allow me, I want to press on.

My hon. Friend the Member for Thurrock (Mr. Janman) referred to wages councils, and so did the hon. Member for Orkney and Shetland (Mr. Wallace) and other hon. Members. Some points must be reiterated. The first should be self-evidently true, but it is apparently not so to the Opposition. It is that the situation in 1909 was vastly different from what it was in 1986, and from the present position.

To listen to Opposition Members, one would think that the wages council structure as we now have it has achieved precisely what they want. But everything that we have heard from Opposition Members has demonstrated that the present system does not work. Therefore, the idea that the structure of the wages councils in some way deals with low pay simply does not wash. Even Opposition Members would have to concede that.

Mr. Ian Bruce

Will my hon. Friend give way?

Mr. Nicholls

If my hon. Friend will allow me, I will not give way. I shall certainly give him due credit. My hon. Friend also made the point that the present system simply does not work.

My right hon. Friend has made it clear that there is a consultation period and we cannot know what the result of that will be. Some of the consequences of the present system really should be looked at by anyone who has a genuine interest in the fate of the low paid.

On average, since 1986, the yearly increase in the rates awarded by wages councils has been about 8.6 per cent. I urge Opposition Members to imagine what it must be like to be running a business and to be told that the least skilled in that business must be paid an increase of, for the sake of argument, 8.6 per cent. It does not stop there. Differentials are completely eroded because that figure must be paid throughout the business. Therefore, the idea that simply paying percentage rates to the lowest paid has no knock-on effect is simply wrong.

Several hon. Members, typically including the hon. Member for Birmingham, Ladywood (Ms. Short), have said that there is widespread evidence that employers are underpaying.

Mr. Ronnie Campbell (Blyth Valley)

Of course they are.

Mr. Nicholls

The hon. Gentleman bawls out from a sedentary position, "Of course they are", but the facts do not bear that out. It is clear from visits made by wages inspectors£the numbers of which have been constant under both Labour and Conservative Governments—that about 97 per cent. of workers covered by wages councils are paid the correct rate. Opposition Members seem to be completely prosecution-minded and say that that is not enough and they want to see more prosecutions. I should have thought that the Opposition would be more concerned about doing something to ensure that the present structure of wages councils was abided by.

If an inspector finds that due to a genuine misunderstanding—[Laughter.] Hon. Members may laugh, but we are talking about the real world, not the world of their fevered imaginations. If the inspectors find that an employer has underpaid because of some misunderstanding about his duties, and he makes it clear that he wants to comply with the law, what would be the point in saying that there should automatically be a prosecution?

As 97 per cent. of people who are covered by wages councils are being paid the correct amount, for the Opposition to maintain that the law is being widely flouted simply will not work. That shows that the system does not work in improving low pay, but that is another matter.

The hon. Member for Orkney and Shetland made several points about wages councils and he referred to the debate on 28 April 1909 on the Trade Boards Bill. As Liberals are wont to do, he sought his inspiration from events that took place the best part of a century ago. He was apparently harking back to the golden days of 1909 when the system worked correctly. However, if he looks at the speech which followed that of Sir Winston Churchill, he will not find great approbation being given to the system. A Mr. T. F. Richards says: we regret exceedingly that we are not in the schedules. I certainly should have liked to see the boot and shoe industry in the schedule".—[Official Report, 28 April 1909; Vol. IV, c. 394.] If the hon. Gentleman thinks that people in 1909 were satisfied with the structure of wages councils, he is not correct.

Ms. Short

Will the hon. Gentleman give way?

Mr. Nicholls

No, I shall not give way. Time does not permit.

Wages councils simply do not have the effect that Opposition Members would have us believe.

Let me deal now with something that we have not heard much about. The hon. Members for Newham, North-East (Mr. Leighton) and for Ladywood rather let the cat out of the bag. The cat that they released was the Labour party's policy. If I am wrong I shall give way immediately to the hon. Member for Oldham, West (Mr. Meacher), but I do not think that he said one word about the Labour party's policy on the low paid. They cannot intend to maintain the wages councils in their present form, because they do not work. Labour party policy is for a national minimum wage. I do not know whether the hon. Member for Oldham, West dissociates himself from that policy. One knows that, at times, he has trouble with particular aspects of Labour party policy. However, he is on record as saying as recently as 5 October 1988 that: a top priority for the next Labour Government must be a national minimum wage. I do not know why the hon. Gentleman did not mention that, because it goes down well with his right hon. and hon. Friends. Perhaps he forgot that it was in the Labour party manifesto. I remind him—and one must hand it to Labour for their optimism—of what it said: We will implement a comprehensive strategy for ending low pay, notably by the introduction of a national statutory minimum wage. Apparently, that is the policy which a Labour Government would operate. The hon. Gentleman told the House nothing about that. If he wonders how it goes down with some of his right hon. and hon. Friends, a number of them have shown already that they go along with it. However, there is a problem for the Labour party when it comes to a national minimum wage. I will intrude for a moment or two on some of the Labour party's private griefs. Presumably the hon. Member for Oldham, West will take account of comments by his right hon. Friend the Member for Birmingham, Sparkbrook (Mr. Hattersley)—that great economist—who writing as recently as 1987 in his book "Choose Socialism" observed: If the law requires employers to pay a statutory minimum rate, and if workers in more highly paid industries negotiate to preserve their relative position, there can only be one possible outcome. The low paid remain low paid at a higher rate of inflation. Just in case the message has not sunk in, the right hon. Member for Sparkbrook added: The real danger comes from the pretence that a national minimum wage could be introduced cheaply or easily. Other Opposition Members could have told the hon. Member for Oldham, West about the fallacies in his thinking. He might have discussed them with his hon. Friend the Member for Birkenhead (Mr. Field), who could have explained the problems that a national minimum wage can cause. I refer to an article by the hon. Member for Birkenhead in The Times, in which he wrote: The higher statutory minimum wage has the drawback that it increases employers' costs. If implemented … it will lead to significant increases in unemployment and a big jump in the rate of inflation. Even if we do not agree with the analysis of the hon. Member for Birkenhead, at least he speaks in debates with great authority. His article went on: I calculate that the higher minimum wage target could result in a loss of more than 400,000 women's jobs, a 4.4 per cent. rise in the total wage bill, together with a 2 to 2.5 per cent. rise in prices. In case the hon. Member for Oldham, West is still not convinced about the efficiency or otherwise of a national minimum wage, he can do no better than talk to a former Minister of State for the Department of Employment who, when rejecting such policies, commented: blanket provision across the board, by its failure to discriminate, will not tackle the pockets of poverty which undeniably exist. It is better to have a discriminatory approach in the provision of social security benefits, perhaps supplemented by fiscal policies."—[Official Report, 1 March 1977; Vol. 927, c. 164.] If the hon. Member for Oldham, West is wondering which Minister of State that was, I can tell him that it was none other than his right hon. Friend the Member for Doncaster, Central (Mr. Walker), speaking from this Dispatch Box in 1977.

We can well understand why the Labour party's preferred policies, set out in their manifesto and endorsed by the hon. Member for Oldham, West, received not one single word of praise from the Front Bench today but had to be let out of the bag by other Opposition Members.

What would be the effect of a national minimum wage? It would destroy jobs by increasing wages without increasing output. Employers' costs would increase, competitiveness would lessen, the total number employed would drop, and differentials would be artificially compressed—causing pressure to restore them, which would add to wage costs and erode competitiveness.

Ms. Short

Will the hon. Gentleman give way?

Mr. Nicholls

Out of misguided gallantry, I give way to the hon. Lady.

Ms. Short

Can the Minister explain why every other country in western Europe can afford a national minimum wage and Britain cannot? Has he seen the study by Cambridge Econometrics which examined every sector of the economy where there is low pay and showed in detail that a national minimum wage is not only affordable but creates greater efficiency?

Mr. Nicholls

The reason why other countries can get along with a national minimum wage is simply by ignoring it and refusing to uprate it. That is how they cover that side of the argument.

There was also reference to the European decency threshold. Listening to Opposition Members, one would think that it was a law or a policy adopted by every other country in the European Community and that only this country failed to abide by it. Let us look for a moment at what the so-called decency threshold is. It was suggested by a committee of independent experts in the Council of Europe which thought that it should be 68 per cent. of the national average wage, but it has never been endorsed by any member state, nor does it appear in the European social charter. It has not been endorsed by the governmental committee on the European social charter, and the charter does not refer to a percentage of average earnings regarded as an acceptable minimum. In other words, the idea that Europe has set a decency threshold is complete and utter nonsense.

Again it illustrates the fallacy which Opposition Members have shown throughout the debate in believing that what matters in the interests of the poor is the gap between rich and poor. Of course, the poor cannot live off the gap. The poor are not interested in the distance between themselves and those who are earning a great deal more; they need to know what is in it for them. They need to know the relative strength of their position.

If the hon. Member for Newham, North-East wants to know what has happened to the lower paid in recent years, may I tell him that for a single person earning 50 per cent. of average male earnings, the real take-home pay has increased by 27.9 per cent. during the lifetime of the Government. For a married couple with one earner and two children, earning 50 per cent. of average male earnings, take-home pay has increased by 22.7 per cent. Those are the figures which matter. Those are the figures which the working poor can rely on. To say that it is the gap which matters shows a total lack of understanding.

The debate was supposed to be about the blight of low pay, but for too many of our citizens the legacy of the Socialism of the 1960s and the 1970s was the blight of no job in the 1980s. Through the policies and efforts of the Government that blight has steadily receded. The debate has served to remind us that even now there is waiting in the wings a party which has learnt nothing from the past and which promises for the future merely the fruits of its own blinding ignorance. For the sake of the low paid and of those who are still without a job, Labour's miserable inadequacy has to be exposed. With their customary incompetence the Opposition have given us that opportunity. It was said of the French kings that they had learnt nothing and that they had forgotten nothing. The Opposition have gone one better. They have shown us that they have learnt nothing and forgotten everything. That is what the Opposition offer us today.

One appreciates the demands that the Pontypridd by-election have imposed on the hon. Member for Alyn and Deeside, but let me remind him of the facts. If he had cared to tell us about the position in his constituency, he could have said that in just the last year the rate of unemployment has fallen by no less than 30 per cent. The hon. Gentleman failed to tell us that. If he is so concerned about average real earnings in Wales, why did he not tell us that during the period of the Labour Government the average earnings of male employees in Wales rose by a miserable 4.6 per cent. and that under this Government they have gone up by 15.9 per cent? Surprisingly the hon. Gentleman did not mention that. Again, if he looks at some of the other figures, he will see that they show a massive increase in expenditure in Wales. Why did the hon. Gentleman not remind us that the Welsh Development Agency's budget for 1989–90 is £130 million, 15 per cent. higher than in the previous year?

Mr. Robert N. Wareing (Liverpool, West Derby)

rose in his place and claimed to move, That the Question be now put.

Question, That the Question be now put, put and agreed to.

Question put accordingly, That the original words stand part of the Question:—

The House divided: Ayes 201, Noes 275.

Division No. 71]	10.00 pm
AYES
Abbott, Ms Diane	Beith, A. J.
Adams, Allen (Paisley N)	Benn, Rt Hon Tony
Allen, Graham	Bermingham, Gerald
Alton, David	Bidwell, Sydney
Anderson, Donald	Blair, Tony
Archer, Rt Hon Peter	Blunkett, David
Armstrong, Hilary	Boateng, Paul
Ashley, Rt Hon Jack	Boyes, Roland
Ashton, Joe	Bradley, Keith
Banks, Tony (Newham NW)	Bray, Dr Jeremy
Barnes, Harry (Derbyshire NE)	Brown, Gordon (D'mline E)
Barron, Kevin	Brown, Nicholas (Newcastle E)
Beckett, Margaret	Brown, Ron (Edinburgh Leith)
Beggs, Roy	Bruce, Malcolm (Gordon)

Buchan, Norman	Kennedy, Charles
Buckley, George J.	Kinnock, Rt Hon Neil
Caborn, Richard	Lamond, James
Callaghan, Jim	Leadbitter, Ted
Campbell, Menzies (Fife NE)	Leighton, Ron
Campbell, Ron (Blyth Valley)	Lestor, Joan (Eccles)
Campbell-Savours, D. N.	Lewis, Terry
Canavan, Dennis	Livingstone, Ken
Carl Me, Alex (Mont'g)	Livsey, Richard
Clark, Dr David (S Shields)	Lofthouse, Geoffrey
Clarke, Tom (Monklands W)	Loyden, Eddie
Clay, Bob	McAllion, John
Clelland, David	McAvoy, Thomas
Clwyd, Mrs Ann	Macdonald, Calum A.
Cohen, Harry	McKelvey, William
Cook, Frank (Stockton N)	McLeish, Henry
Corbett, Robin	McTaggart, Bob
Corbyn, Jeremy	Madden, Max
Cousins, Jim	Mahon, Mrs Alice
Crowther, Stan	Marek, Dr John
Cryer, Bob	Marshall, David (Shettleston)
Cummings, John	Martin, Michael J. (Springburn)
Dalyell, Tam	Martlew, Eric
Darling, Alistair	Maxton, John
Davies, Rt Hon Denzil (Llanelli)	Meacher, Michael
Davis, Terry (B'ham Hodge H'l)	Meale, Alan
Dewar, Donald	Michael, Alun
Dixon, Don	Michie, Bill (Sheffield Heeley)
Dobson, Frank	Michie, Mrs Ray (Arg'l & Bute)
Doran, Frank	Mitchell, Austin (G'f Grimsby)
Duffy, A. E. P.	Moonie, Dr Lewis
Dunnachie, Jimmy	Morgan, Rhodri
Dunwoody, Hon Mrs Gwyneth	Morley, Elliott
Eadie, Alexander	Morris, Rt Hon A. (W'shawe)
Eastham, Ken	Morris, Rt Hon J. (Aberavon)
Evans, John (St Helens N)	Mullin, Chris
Fatchett, Derek	Murphy, Paul
Fearn, Ronald	Nellist, Dave
Field, Frank (Birkenhead)	Oakes, Rt Hon Gordon
Fisher, Mark	Orme, Rt Hon Stanley
Flannery, Martin	Patchett, Terry
Flynn, Paul	Pendry, Tom
Foot, Rt Hon Michael	Pike, Peter L.
Foster, Derek	Powell, Ray (Ogmore)
Foulkes, George	Prescott, John
Fraser, John	Primarolo, Dawn
Fyfe, Maria	Quin, Ms Joyce
Galbraith, Sam	Radice, Giles
Galloway, George	Rees, Rt Hon Merlyn
Garrett, John (Norwich South)	Reid, Dr John
Gilbert, Rt Hon Dr John	Richardson, Jo
Godman, Dr Norman A.	Robertson, George
Gould, Bryan	Robinson, Geoffrey
Graham, Thomas	Rooker, Jeff
Grant, Bernie (Tottenham)	Ross, Ernie (Dundee W)
Griffiths, Nigel (Edinburgh S)	Rowlands, Ted
Griffiths, Win (Bridgend)	Ruddock, Joan
Grocott, Bruce	Salmond, Alex
Hattersley, Rt Hon Roy	Sedgemore, Brian
Healey, Rt Hon Denis	Sheerman, Barry
Heffer, Eric S.	Sheldon, Rt Hon Robert
Henderson, Doug	Shore, Rt Hon Peter
Hinchliffe, David	Short, Clare
Hogg, N. (C'nauld & Kilsyth)	Sillars, Jim
Holland, Stuart	Skinner, Dennis
Home Robertson, John	Smith, Andrew (Oxford E)
Hood, Jimmy	Smith, C. (lsl'ton & F'bury)
Howarth, George (Knowsley N)	Smith, Rt Hon J. (Monk'ds E)
Howell, Rt Hon D. (S'heath)	Snape, Peter
Hoyle, Doug	Spearing, Nigel
Hughes, John (Coventry NE)	Steel, Rt Hon David
Hughes, Robert (Aberdeen N)	Steinberg, Gerry
Hughes, Roy (Newport E)	Strang, Gavin
Hughes, Simon (Southwark)	Straw, Jack
Illsley, Eric	Taylor, Mrs Ann (Dewsbury)
Ingram, Adam	Taylor, Matthew (Truro)
Janner, Greville	Thomas, Dr Dafydd Elis
Jones, Barry (Alyn & Deeside)	Turner, Dennis
Jones, leuan (Ynys MÔn)	Vaz, Keith
Jones, Martyn (Clwyd S W)	Wall, Pat

Wallace, James	Wise, Mrs Audrey
Walley, Joan	Worthington, Tony
Wardell, Gareth (Gower)	Wray, Jimmy
Wareing, Robert N.	Young, David (Bolton SE)
Welsh, Andrew (Angus E)
Welsh, Michael (Doncaster N)	Tellers for the Ayes:
Williams, Rt Hon Alan	Mr. Frank Haynes and
Wilson, Brian	Mr. Men McKay.
Winnick, David

NOES
Adley, Robert	Dicks, Terry
Aitken, Jonathan	Dorrell, Stephen
Alexander, Richard	Douglas-Hamilton, Lord James
Alison, Rt Hon Michael	Dover, Den
Allason, Rupert	Dunn, Bob
Amess, David	Durant, Tony
Amos, Alan	Dykes, Hugh
Arbuthnot, James	Evans, David (Welwyn Hatf'd)
Arnold, Jacques (Gravesham)	Fallon, Michael
Arnold, Tom (Hazel Grove)	Favell, Tony
Ashby, David	Field, Barry (Isle of Wight)
Aspinwall, Jack	Fookes, Dame Janet
Baker, Rt Hon K. (Mole Valley)	Forman, Nigel
Baker, Nicholas (Dorset N)	Forsyth, Michael (Stirling)
Baldry, Tony	Fowler, Rt Hon Norman
Banks, Robert (Harrogate)	Fox, Sir Marcus
Batiste, Spencer	Freeman, Roger
Beaumont-Dark, Anthony	French, Douglas
Bellingham, Henry	Gardiner, George
Bendall, Vivian	Garel-Jones, Tristan
Bennett, Nicholas (Pembroke)	Gill, Christopher
Benyon, W.	Gilmour, Rt Hon Sir Ian
Bevan, David Gilroy	Glyn, Dr Alan
Biffen, Rt Hon John	Gorman, Mrs Teresa
Blackburn, Dr John G.	Gower, Sir Raymond
Blaker, Rt Hon Sir Peter	Greenway, Harry (Ealing N)
Body, Sir Richard	Gregory, Conal
Bonsor, Sir Nicholas	Grist, Ian
Boscawen, Hon Robert	Grylls, Michael
Boswell, Tim	Hamilton, Neil (Tatton)
Bottomley, Peter	Hampson, Dr Keith
Bowden, Gerald (Dulwich)	Hanley, Jeremy
Boyson, Rt Hon Dr Sir Rhodes	Hannam, John
Brandon-Bravo, Martin	Hargreaves, A. (B'ham H'll Gr')
Brazier, Julian	Hargreaves, Ken (Hyndburn)
Brown, Michael (Brigg & Cl't's)	Harris, David
Browne, John (Winchester)	Haselhurst, Alan
Bruce, Ian (Dorset South)	Hayes, Jerry
Buchanan-Smith, Rt Hon Alick	Hayward, Robert
Buck, Sir Antony	Heathcoat-Amory, David
Budgen, Nicholas	Heddle, John
Burns, Simon	Heseltine, Rt Hon Michael
Burt, Alistair	Hicks, Mrs Maureen (Wolv' NE)
Butler, Chris	Hicks, Robert (Cornwall SE)
Butterfill, John	Higgins, Rt Hon Terence L.
Carlisle, John, (Luton N)	Hind, Kenneth
Carlisle, Kenneth (Lincoln)	Hogg, Hon Douglas (Gr'th'm)
Carrington, Matthew	Holt, Richard
Carttiss, Michael	Hordern, Sir Peter
Cash, William	Howard, Michael
Channon, Rt Hon Paul	Howarth, Alan (Strat'd-on-A)
Chapman, Sydney	Howarth, G. (Cannock & B'wd)
Chope, Christopher	Howe, Rt Hon Sir Geoffrey
Clark, Dr Michael (Rochford)	Howell, Rt Hon David (G'dtord)
Clark, Sir W. (Croydon S)	Hughes, Robert G. (Harrow W)
Clarke, Rt Hon K. (Rushcliffe)	Hunt, David (Wirral W)
Colvin, Michael	Hunter, Andrew
Conway, Derek	Irvine, Michael
Coombs, Anthony (Wyre F'rest)	Irving, Charles
Coombs, Simon (Swindon)	Jack, Michael
Cormack, Patrick	Jackson, Robert
Couchman, James	Janman, Tim
Critchley, Julian	Johnson Smith, Sir Geoffrey
Currie, Mrs Edwina	Jones, Gwilym (Cardiff N)
Curry, David	Jopling, Rt Hon Michael
Davies, Q. (Stamf'd & Spald'g)	Kellett-Bowman, Dame Elaine
Davis, David (Boothferry)	Key, Robert
Day, Stephen	King, Roger (B'ham N'thfield)
Devlin, Tim	Kirkhope, Timothy

Knapman, Roger	Rost, Peter
Knight, Dame Jill (Edgbaston)	Rowe, Andrew
Knowles, Michael	Ryder, Richard
Knox, David	Sainsbury, Hon Tim
Lamont, Rt Hon Norman	Scott, Nicholas
Lang, Ian	Shaw, David (Dover)
Latham, Michael	Shaw, Sir Michael (Scarb')
Lawrence, Ivan	Shephard, Mrs G. (Norfolk SW)
Lawson, Rt Hon Nigel	Shepherd, Colin (Hereford)
Lee, John (Pendle)	Shepherd, Richard (Aldridge)
Leigh, Edward (Gainsbor'gh)	Shersby, Michael
Lennox-Boyd, Hon Mark	Sims, Roger
Lester, Jim (Broxtowe)	Skeet, Sir Trevor
Lightbown, David	Smith, Tim (Beaconsfield)
Lilley, Peter	Soames, Hon Nicholas
Lloyd, Sir Ian (Havant)	Speller, Tony
Lloyd, Peter (Fareham)	Spicer, Sir Jim (Dorset W)
McCrindle, Robert	Spicer, Michael (S Worcs)
Macfarlane, Sir Neil	Squire, Robin
McLoughlin, Patrick	Stanbrook, Ivor
McNair-Wilson, Sir Michael	Stanley, Rt Hon Sir John
McNair-Wilson, P. (New Forest)	Steen, Anthony
Madel, David	Stern, Michael
Major, Rt Hon John	Stevens, Lewis
Malins, Humfrey	Stewart, Andy (Sherwood)
Marland, Paul	Stradling Thomas, Sir John
Marlow, Tony	Sumberg, David
Marshall, John (Hendon S)	Summerson, Hugo
Marshall, Michael (Arundel)	Tapsell, Sir Peter
Martin, David (Portsmouth S)	Taylor, Ian (Esher)
Maude, Hon Francis	Taylor, John M (Solihull)
Maxwell-Hyslop, Robin	Taylor, Teddy (S'end E)
Mayhew, Rt Hon Sir Patrick	Tebbit, Rt Hon Norman
Meyer, Sir Anthony	Temple-Morris, Peter
Miller, Sir Hal	Thompson, D. (Calder Valley)
Mills, Iain	Thompson, Patrick (Norwich N)
Mitchell, Andrew (Gedling)	Thurnham, Peter
Mitchell, Sir David	Townend, John (Bridlington)
Monro, Sir Hector	Townsend, Cyril D. (B'heath)
Montgomery, Sir Fergus	Tracey, Richard
Moore, Rt Hon John	Tredinnick, David
Morrison, Sir Charles	Trippier, David
Morrison, Rt Hon P (Chester)	Twinn, Dr Ian
Moss, Malcolm	Vaughan, Sir Gerard
Mudd, David	Viggers, Peter
Neale, Gerrard	Waddington, Rt Hon David
Needham, Richard	Wakeham, Rt Hon John
Nelson, Anthony	Walden, George
Nicholls, Patrick	Walker, Bill (T'side North)
Nicholson, David (Taunton)	Waller, Gary
Norris, Steve	Ward, John
Onslow, Rt Hon Cranley	Wardle, Charles (Bexhill)
Oppenheim, Phillip	Warren, Kenneth
Paice, James	Watts, John
Patnick, Irvine	Wells, Bowen
Patten, John (Oxford W)	Wheeler, John
Peacock, Mrs Elizabeth	Whitney, Ray
Porter, Barry (Wirral S)	Widdecombe, Ann
Porter, David (Waveney)	Wiggin, Jerry
Powell, William (Corby)	Winterton, Mrs Ann
Price, Sir David	Winterton, Nicholas
Raffan, Keith	Wolfson, Mark
Raison, Rt Hon Timothy	Wood, Timothy
Redwood, John	Woodcock, Mike
Rhodes James, Robert	Yeo, Tim
Riddick, Graham	Young, Sir George (Acton)
Ridsdale, Sir Julian
Rifkind, Rt Hon Malcolm	Tellers for the Noes:
Roberts, Wyn (Conwy)	Mr. David Maclean and
Roe, Mrs Marion	Mr. Tom Sackville.
Rossi. Sir Hugh

Question accordingly negatived.

Question, That the proposed words be there added, put forthwith pursuant to Standing Order No. 30 (Questions on amendments):—

The House divided: Ayes 246, Noes 181.

Division No. 72]	[10.15 pm
AYES
Adley, Robert	Glyn, Dr Alan
Aitken, Jonathan	Gorman, Mrs Teresa
Alexander, Richard	Gower, Sir Raymond
Alison, Rt Hon Michael	Greenway, Harry (Ealing N)
Amess, David	Gregory, Conal
Amos, Alan	Grist, Ian
Arbuthnot, James	Grylls, Michael
Arnold, Jacques (Gravesham)	Hamilton, Neil (Tatton)
Ashby, David	Hampson, Dr Keith
Aspinwall, Jack	Hanley, Jeremy
Baker, Rt Hon K. (Mole Valley)	Hannam, John
Baker, Nicholas (Dorset N)	Hargreaves, A. (B'ham H'll Gr')
Baldry, Tony	Hargreaves, Ken (Hyndburn)
Banks, Robert (Harrogate)	Harris, David
Batiste, Spencer	Haselhurst, Alan
Beaumont-Dark, Anthony	Hayes, Jerry
Bendall, Vivian	Hayward, Robert
Bennett, Nicholas (Pembroke)	Heathcoat-Amory, David
Benyon, W.	Heddle, John
Bevan, David Gilroy	Heseltine, Rt Hon Michael
Biffen, Rt Hon John	Hicks, Mrs Maureen (Wolv' NE)
Blackburn, Dr John G.	Hicks, Robert (Cornwall SE)
Blaker, Rt Hon Sir Peter	Higgins, Rt Hon Terence L.
Body, Sir Richard	Hind, Kenneth
Boscawen, Hon Robert	Hogg, Hon Douglas (Gr'th'm)
Boswell, Tim	Holt, Richard
Bowden, Gerald (Dulwich)	Hordern, Sir Peter
Boyson, Rt Hon Dr Sir Rhodes	Howard, Michael
Brandon-Bravo, Martin	Howarth, Alan (Strat'd-on-A)
Brazier, Julian	Howarth, G. (Cannock & B'wd)
Browne, John (Winchester)	Howe, Rt Hon Sir Geoffrey
Buchanan-Smith, Rt Hon Alick	Hughes, Robert G. (Harrow W)
Buck, Sir Antony	Hunt, David (Wirral W)
Burns, Simon	Hunter, Andrew
Burt, Alistair	Irvine, Michael
Butler, Chris	Irving, Charles
Butterfill, John	Jack, Michael
Carlisle, John, (Luton N)	Jackson, Robert
Carlisle, Kenneth (Lincoln)	Janman, Tim
Carrington, Matthew	Johnson Smith, Sir Geoffrey
Cash, William	Jones, Gwilym (Cardiff N)
Channon, Rt Hon Paul	Jopling, Rt Hon Michael
Chapman, Sydney	King, Roger (B'ham N'thfield)
Chope, Christopher	Knapman, Roger
Clark, Sir W. (Croydon S)	Knight, Dame Jill (Edgbaston)
Clarke, Rt Hon K. (Rushcliffe)	Knowles, Michael
Colvin, Michael	Knox, David
Conway, Derek	Lamont, Rt Hon Norman
Coombs, Anthony (Wyre F'rest)	Lang, Ian
Cormack, Patrick	Latham, Michael
Couchman, James	Lawrence, Ivan
Currie, Mrs Edwina	Lawson, Rt Hon Nigel
Davies, Q. (Stamf'd & Spald'g)	Lee, John (Pendle)
Davis, David (Boothferry)	Leigh, Edward (Gainsbor'gh)
Day, Stephen	Lennox-Boyd, Hon Mark
Devlin, Tim	Lester, Jim (Broxtowe)
Dicks, Terry	Lightbown, David
Dorrell, Stephen	Lilley, Peter
Douglas-Hamilton, Lord James	Lloyd, Sir Ian (Havant)
Dover, Den	Lloyd, Peter (Fareham)
Dunn, Bob	McCrindle, Robert
Durant, Tony	Macfarlane, Sir Neil
Dykes, Hugh	McLoughlin, Patrick
Evans, David (Welwyn Hatf'd)	McNair-Wilson, Sir Michael
Fallon, Michael	McNair-Wilson, P. (New Forest)
Favell, Tony	Madel, David
Field, Barry (Isle of Wight)	Major, Rt Hon John
Fookes, Dame Janet	Malins, Humfrey
Forman, Nigel	Marland, Paul
Forsyth, Michael (Stirling)	Marshall, John (Hendon S)
Fowler, Rt Hon Norman	Marshall, Michael (Arundel)
Fox, Sir Marcus	Martin, David (Portsmouth S)
Freeman, Roger	Maude, Hon Francis
French, Douglas	Maxwell-Hyslop, Robin
Gardiner, George	Mayhew, Rt Hon Sir Patrick
Garel-Jones, Tristan	Meyer, Sir Anthony
Gill, Christopher	Miller, Sir Hal

Mills, Iain	Spicer, Michael (S Worcs)
Mitchell, Andrew (Gedling)	Squire, Robin
Mitchell, Sir David	Stanbrook, Ivor
Monro, Sir Hector	Steen, Anthony
Montgomery, Sir Fergus	Stern, Michael
Moore, Rt Hon John	Stevens, Lewis
Morrison, Sir Charles	Stewart, Andy (Sherwood)
Morrison, Rt Hon P (Chester)	Stradling Thomas, Sir John
Moss, Malcolm	Sumberg, David
Neale, Gerrard	Summerson, Hugo
Needham, Richard	Tapsell, Sir Peter
Nelson, Anthony	Taylor, Ian (Esher)
Nicholls, Patrick	Taylor, John M (Solihull)
Nicholson, David (Taunton)	Taylor, Teddy (S'end E)
Norris, Steve	Tebbit, Rt Hon Norman
Onslow, Rt Hon Cranley	Temple-Morris, Peter
Oppenheim, Phillip	Thompson, D. (Calder Valley)
Paice, James	Thompson, Patrick (Norwich N)
Patnick, Irvine	Thurnham, Peter
Patten, John (Oxford W)	Townend, John (Bridlington)
Peacock, Mrs Elizabeth	Townsend, Cyril D. (B'heath)
Porter, David (Waveney)	Tredinnick, David
Powell, William (Corby)	Trippier, David
Price, Sir David	Twinn, Dr Ian
Raffan, Keith	Vaughan, Sir Gerard
Raison, Rt Hon Timothy	Viggers, Peter
Redwood, John	Waddington, Rt Hon David
Rhodes James, Robert	Wakeham, Rt Hon John
Riddick, Graham	Walden, George
Rifkind, Rt Hon Malcolm	Walker, Bill (T'side North)
Roberts, Wyn (Conwy)	Waller, Gary
Rossi, Sir Hugh	Ward, John
Rowe, Andrew	Wardle, Charles (Bexhill)
Ryder, Richard	Wells, Bowen
Sainsbury, Hon Tim	Wheeler, John
Scott, Nicholas	Whitney, Ray
Shaw, David (Dover)	Widdecombe, Ann
Shaw, Sir Michael (Scarb')	Wiggin, Jerry
Shephard, Mrs G. (Norfolk SW)	Winterton, Mrs Ann
Shepherd, Colin (Hereford)	Winterton, Nicholas
Shepherd, Richard (Aldridge)	Wolfson, Mark
Shersby, Michael	Wood, Timothy
Sims, Roger	Yeo, Tim
Skeet, Sir Trevor	Young, Sir George (Acton)
Smith, Tim (Beaconsfield)
Soames, Hon Nicholas	Tellers for the Ayes:
Speller, Tony	Mr. David Maclean and
Spicer, Sir Jim (Dorset W)	Mr. Tom Sackville.

NOES
Abbott, Ms Diane	Campbell, Menzies (Fife NE)
Adams, Allen (Paisley N)	Campbell-Savours, D. N.
Alton, David	Carlile, Alex (Monf'g)
Anderson, Donald	Clark, Dr David (S Shields)
Archer, Rt Hon Peter	Clarke, Tom (Monklands W)
Armstrong, Hilary	Clay, Bob
Ashton, Joe	Clelland, David
Banks, Tony (Newham NW)	Clwyd, Mrs Ann
Barnes, Harry (Derbyshire NE)	Cohen, Harry
Barron, Kevin	Corbett, Robin
Beckett, Margaret	Corbyn, Jeremy
Beggs, Roy	Cousins, Jim
Beith, A. J.	Crowther, Stan
Benn, Rt Hon Tony	Cryer, Bob
Bermingham, Gerald	Cummings, John
Bidwell, Sydney	Dalyell, Tarn
Blair, Tony	Darling, Alistair
Blunkett, David	Davies, Rt Hon Denzil (Llanelli)
Boateng, Paul	Davis, Terry (B'ham Hodge H'l)
Boyes, Roland	Dewar, Donald
Bradley, Keith	Dixon, Don
Bray, Dr Jeremy	Dobson, Frank
Brown, Gordon (D'mline E)	Doran, Frank
Brown, Nicholas (Newcastle E)	Duffy, A. E. P.
Brown, Ron (Edinburgh Leith)	Dunnachie, Jimmy
Bruce, Malcolm (Gordon)	Dunwoody, Hon Mrs Gwyneth
Buchan, Norman	Eadie, Alexander
Buckley, George J.	Eastham, Ken
Caborn, Richard	Evans, John (St Helens N)
Callaghan, Jim	Fatchett, Derek

Fearn, Ronald	Mitchell, Austin (G't Grimsby)
Field, Frank (Birkenhead)	Moonie, Dr Lewis
Fisher, Mark	Morgan, Rhodri
Flannery, Martin	Morley, Elliott
Flynn, Paul	Morris, Rt Hon A. (W'shawe)
Foot, Rt Hon Michael	Morris, Rt Hon J. (Aberavon)
Foster, Derek	Murphy, Paul
Foulkes, George	Nellist, Dave
Fraser, John	Oakes, Rt Hon Gordon
Fyfe, Maria	Orme, Rt Hon Stanley
Galbraith, Sam	Patchett, Terry
Galloway, George	Pendry, Tom
Garrett, John (Norwich South)	Pike, Peter L.
Godman, Dr Norman A.	Powell, Ray (Ogmore)
Graham, Thomas	Prescott, John
Grant, Bernie (Tottenham)	Primarolo, Dawn
Griffiths, Nigel (Edinburgh S)	Quin, Ms Joyce
Griffiths, Win (Bridgend)	Rachce, Giles
Grocott, Bruce	Reid, Dr John
Hattersley, Rt Hon Roy	Richardson, Jo
Heller, Eric S.	Robertson, George
Henderson, Doug	Rooker, Jeff
Hinchliffe, David	Rowlands, Ted
Hogg, N. (C'nauld & Kilsyth)	Ruddock, Joan
Holland, Stuart	Salmond, Alex
Home Robertson, John	Sedgemore, Brian
Hood, Jimmy	Sheerman, Barry
Howarth, George (Knowsley N)	Sheldon, Rt Hon Robert
Howell, Rt Hon D. (S'heath)	Shore, Rt Hon Peter
Hoyle, Doug	Short, Clare
Hughes, John (Coventry NE)	Sillars, Jim
Hughes, Robert (Aberdeen N)	Skinner, Dennis
Hughes, Simon (Southwark)	Smith, Andrew (Oxford E)
Illsley, Eric	Smith, C. (Islton & F'bury)
Ingram, Adam	Smith, Rt Hon J. (Monk'ds E)
Janner, Greville	Snape, Peter
Jones, Barry (Alyn & Deeside)	Spearing, Nigel
Jones, Martyn (Clwyd S W)	Steel, Rt Hon David
Kennedy, Charles	Steinberg, Gerry
Kinnock, Rt Hon Neil	Strang, Gavin
Lamond, James	Straw, Jack
Leadbitter, Ted	Taylor, Mrs Ann (Dewsbury)
Leighton, Ron	Taylor, Matthew (Truro)
Lestor, Joan (Eccles)	Turner, Dennis
Lewis, Terry	Vaz, Keith
Livsey, Richard	Wall, Pat
Lofthouse, Geoffrey	Wallace, James
Loyden, Eddie	Walley, Joan
McAvoy, Thomas	Wardell, Gareth (Gower)
Macdonald, Calum A.	Wareing, Robert N.
Mcleish, Henry	Welsh, Andrew (Angus E)
McTaggart, Bob	Welsh, Michael (Doncaster N)
Madden, Max	Williams, Rt Hon Alan
Mahon, Mrs Alice	Wilson, Brian
Marek, Dr John	Winnick, David
Marshall, David (Shottlesion)	Wise, Mrs Audrey
Martin, Michael J. (Springburn)	Worthington, Tony
Martlew, Eric	Wray, Jimmy
Maxton, John
Meacher, Michael	Tellers for the Noes:
Meale, Alan	Mr. Frank Haynes and
Michael, Alun	Mr. Allen Mckay
Michie, Bill (Sheffield Heeley)

Question accordingly agreed to.

MR. SPEAKER forthwith declared the main Question, as amended, to be agreed to.

Resolved, 'That this House, noting that since this Government came to power personal disposable income has increased at every level in society and that the lowest paid have had proportionately higher increases than many other groups, considers that the best way in which the Government can help the low paid is by creating the conditions for more jobs by breaking down the barriers to employment and encouraging labour market flexibility; and welcomes the Government's decision to consult about the abolition of Wages Councils.'.