Wages Councils (Hansard, 18 October 1994)

§ 6. Mr. Gordon Prentice
To ask the Secretary of State for Employment what assessment he has made of the effect of the abolition of the wages councils on the pay of those in occupations which were previously covered.

§ Mr. Oppenheim
The 1994 new earnings survey shows that, in the main, average earnings of workers in sectors that were covered by wages councils rose between April 1993 and April 1994, although it is still too early to make a full assessment.

§ Mr. Prentice
Is the Minister proud of the fact that Britain is the only country in the European Union without legal pay protection for the very poorest? What advice would he give people in north-east Lancashire who see sweatshop pay rates being replaced by slave-labour rates, such as the £80 a week that is being offered by Mr. Joe McBride of Northern Textiles? Should people be grateful for those grotesque wage rates?

§ Mr. Oppenheim
First, it is not correct to say that all European Union countries have minimum wages or wages councils. Secondly, no one will condone poor employers or bad employment practices. If Opposition Members think that there is some easy way of securing higher wages just by political diktat—without improving the competitiveness, productivity and efficiency of the economy, and without enhancing the skills and educational base of the work force—they are perpetrating an unfair myth on the British people.

§ Dame Jill Knight
Is my memory playing me false, or is it true that, during the 1970s, the Labour party, when in government, abolished quite a number of wages 131 councils? If it is so wrong for the Conservative Government to have done that, why did the Labour party do it then?

§ Mr. Oppenheim
My hon. Friend is perfectly correct. Between 1974 and 1978, the Labour Government abolished no fewer than 11 wages councils, covering 600,000 workers.

§ Ms Short
rose—

Hon. Members
Answer.

§ Ms Short
I was just attempting to speak, if hon. Members will allow me.
We know that the Minister is new. He is probably not aware that those wages councils were very tiny and behind the times. Let me point out to him that evidence of average wages in a wages council sector tells us nothing about low pay in that sector. I know that he is new: he may not be aware of the research undertaken by the low pay network campaign against poverty, which was published in August 1994, which examined nearly 6,000 jobs in what were previously wages council sectors and found that one third of all vacancies paid less than the wages council rate—

§ Madam Speaker
Order. I must hear a question from the hon. Lady.

§ Ms Short
Thank you, Madam Speaker. I asked whether the Minister was aware of research, of which he should be aware. In retailing, pay is 42 per cent. less than the wages council rate. Does the Minister realise that his strategy of encouraging low pay in Britain damages women workers above all? Does he not yet understand, after 15 years of economic failure, that the encouragement of low pay leads to poor training and poor investment, and that a national minimum wage would benefit low-paid families—[HON. MEMBERS: "Question."] It is a question. Does the Minister understand that a national minimum wage would benefit low-income families, and encourage employers to train and invest instead of competing by cutting wages?

§ Mr. Oppenheim
I may be new, but I have seen the low pay network campaign report. I do not know how thoroughly the hon. Lady has read the report. If she has read it thoroughly, she will know that the report is based solely on surveys of unfilled vacancies in jobcentres, which tend to be at lower levels than pay for people in work. Not a single person in work was surveyed for that particular report, so on a statistical basis the report is flawed.
As for the abolition of wages councils under the last Labour Government, I do not know whether the hon. Lady thinks that 250,000 road haulage workers represent an insignificant industry. The only way in which we shall increase pay levels is by increasing the productivity of the economy. Since 1979, productivity has increased significantly, as has pay at all levels. That is in stark contrast to the late 1970s, when both productivity and pay in the British economy stagnated. We shall be able to help the low-paid only when we have a more efficient, competitive economy.

§ Madam Speaker
Order. All hon. Members today—both Back Benchers and Front Benchers—have been far 132 too long with their questions and answers. I want brisk questions and answers in future. I call Sir Donald Thompson. I can rely on you, I am sure.

§ Sir Donald Thompson
Can my hon. Friend tell me how many jobs wages councils have created?

§ Mr. Oppenheim
None, sir.