Low-paid Workers (Hansard, 19 November 1990)

§ 1. Mr. Steen
To ask the Secretary of State for Social Security if he will review the Government's policy towards helping those in low-paid employment.

§ The Secretary of State for Social Security (Mr. Tony Newton)
A range of improvements designed to help the low-paid have been implemented in both the tax and social security systems. As a result of our policies, families now keep more of their earnings. Moreover, family credit now provides considerable extra help to boost the incomes of well over 320,000 working families

§ Mr. Steen
Is my right hon. Friend aware that there is often no incentive for single-parent families to go out and earn money, especially in low-wage areas such as south Devon where they are often better off staying at home and doing nothing than going out and finding paid work? Does my right hon. Friend agree that the Government should be encouraging the work ethic and making it more worth while for those who wish to work to help themselves?

§ Mr. Newton
Yes, indeed I do. My hon. Friend will be aware that within the past month, or just over a month, we 2 have improved the earnings disregard in respect of in-work benefits—housing benefit and community charge benefit —with an eye on precisely the problem that many lone parents face. My hon. Friend will be aware also that a major ingredient in the child maintenance proposals that we published in the White Paper at the end of last month is directed to the same end

§ Mr. Pike
Does the Secretary of State recognise that, while these measures may be welcomed and should be supported, the Government should be doing more to ensure fair pay and perhaps a national minimum wage to help those on low pay? Is not it a fact that low pay does not save jobs and that increases in productivity achieved by farm workers and others on low pay have not saved their jobs?

§ Mr. Newton
The most likely result of any minimum wage policy of the kind that the hon. Gentleman appears to be advocating, and that his party is thought to advocate, would be the destruction of a considerable number of jobs. The right course is to concentrate on encouraging employment and on reducing taxation and national insurance contributions so that people can get a good return from their work

§ Mr. Tony Banks
May I welcome the Secretary of State to the Government Dispatch Box on the first occasion on which I am asking a question on social security from the Opposition Front Bench? I hope soon to be answering such questions. In view of the right hon. Gentleman's previous answer, will he explain why all other members of the EEC are able to present national minimum wage levels when he says that if we were to do that—the next Labour Government will be doing it—we would be destroying jobs?

§ Mr. Newton
Without entirely endorsing all the hopes and aspirations that the hon. Gentleman expressed in his introductory remarks, I welcome him to the Opposition Front Bench. I am sure that we all look forward to his being on the Opposition Front Bench for many happy years.
3 Perhaps lurking in the hon. Gentleman's supplementary question is the reason why Britain has been more successful than virtually any other country in Europe in creating new jobs.