Wages (Hansard, 16 May 1989)

§ 11. Mr. Clelland
To ask the Secretary of State for Employment how many firms visited in 1988, were paying below the legal wages council minima; and how many were prosecuted.

§ Mr. Patrick Nicholls
Wages inspectorate statistics on compliance with wages orders are compiled on the basis of establishments rather than firms.
In 1988, underpayments were found at 5,597 of the establishments visited. There were 10 prosecutions for underpayment offences.

§ Mr. Clelland
Given the fact that 380,000 establishments are covered by wages councils, were not a disgracefully low number visited by inspectors last year? Why have the Government cut the number of inspectors by over 100 per cent.? Even on this small sample, over 17 per cent. of those visited were paying below the statutory minimum, so why were only 0.03 per cent. prosecuted? Is this not another example of the fact that under this Government there is one law for the employers and another for lower-paid workers?

§ Mr. Nicholls
No. The hon. Gentleman's conclusion is as false as the statistics that he recited. The fact is that the wages inspectorate concentrates on those establishments which it believes to be underpaying. What it finds when it goes to many of these establishments is that there may be only two or three people being underpaid. If the hon. Gentleman is concerned about the number of prosecutions which take place, he should realise that the number of prosecutions has remained constant under this Government, as under the last.

§ Mr. Hayes
Is my hon. Friend aware that even Left-wing economists are now saying that wages councils cause unemployment? Does he not agree that the major cause of poverty is unemployment?

§ Mr. Nicholls
That is absolutely right, as my hon. Friend says. The link is indeed well made out. The difficulty with Labour Members is that they cannot see that no job is worse than low pay.

§ Mr. Meacher
On the question of very low wages, who does the hon. Gentleman agree with? Does he agree with the Secretary of State for Social Security that wage poverty does not exist—in which case how are three quarters of a million workers caught in a poverty trap where they lose more than 70p of every extra £1 earned—or does he agree with the Chancellor of the Exchequer that workers paid less than half national average earnings are indeed poor—in which case, why have the Government prosecuted only 56 out of more than 88,000 establishments found to be paying illegally low wages?

§ Mr. Nicholls
One of the hon. Gentleman's many troubles is that he seems to be prosecution-happy. The point about prosecution policy is that if on a visit it is found that there has not been a blatant disregard of the law but perhaps a mistake, obviously, prosecution may not 160 be appropriate. That was the reason—and the hon. Gentleman would have heard it if he had been listening—why I was able to say to his hon. Friend that the rate of prosecution under this Government has remained the same as it was under the previous Government. My right hon. Friend the Secretary of State for Social Security made a valuable contribution when he said that some people have a vested interest in poverty-mongering. From what we have heard it would appear that that includes the hon. Gentleman.