HC Deb 18 October 1994 vol 248 cc132-3
8. Mr. Spellar

To ask the Secretary of State for Employment what discussions he has had since 21 July with the United States Administration regarding the effect of a national minimum wage.

Mr. Oppenheim

None.

Mr. Spellar

Can one presume that that is because Ministers might not like the answers that they would receive? Ministers have been pleased to say how many jobs have been created in the United States—that is, of course, in the context of a national minimum wage.

Mr. Oppenheim

I know of the hon. Gentleman's interest in a national minimum wage in the United States. However, I do not know whether he knows that the level of the federal national minimum wage in the United States is £2.70, compared to the Labour party's proposals for Britain of £4. The gap is even greater when one bears in mind that pay levels in the United States are far higher than those in the United Kingdom. Successive American Administrations have allowed minimum pay to wither away by not raising it in line with inflation. The last example of that was the Clinton Administration, who came to power committed to increasing the minimum wage, but two years later have done nothing about it.

Mr. Barron

The Minister said that the minimum wage would destroy jobs in this country. Can he comment on the survey by the low pay network campaign, which showed that since September 1993—after the abolition of the wages councils–27,000 jobs have been lost in the hotel and catering sector? I thought that abolition was supposed to make the number of such jobs grow.

Mr. Oppenheim

The hon. Gentleman has missed the point. The survey was done at a time when the hotel and catering industry—which is a seasonal industry—sheds jobs. If the hon. Gentleman is serious about the minimum wage, it is incumbent on him to tell us how he would handle the question of whether there would be a lower rate for youth workers, as happens in the Netherlands. How would he handle the effect on public sector pay, bearing in mind the fact that Labour is now committed not to increase public sector spending? Above all, how would he handle the knock-on effect of differentials, which every trade union leader has told us that they would expect to rise?