HC Deb 07 February 1995 vol 254 cc132-4
8. Mr. Riddick

To ask the Secretary of State for Employment on what occasions discussions have taken place between European Employment Ministers on the effects of a minimum wage (a) on young workers and (b) on the long-term unemployed.

Mr. Oppenheim

There have been no discussions, but the EC White Paper on competitiveness criticises the minimum wage for destroying jobs.

Mr. Riddick

Is my hon. Friend aware of a report, commissioned by the French Government, which found that the minimum wage in France contributed significantly to the much higher levels of unemployment among young people and the long-term unemployed? Does he agree that the social chapter, while equally well meaning, could have the same bad effect on job prospects? Should he not encourage our European partners—all 11 of them—to stage a mass opt-out from the social chapter and thereby create more jobs across Europe?

Mr. Oppenheim

My hon. Friend is quite right. It is interesting that two European countries—France and Spain—which have a minimum wage of the type that Labour proposes for Britain have youth unemployment levels which are two and three times that of the United Kingdom.

I find it amazing that the Opposition are trumpeting the fact that they are launching a campaign on the minimum wage, yet Opposition Members cannot come to the House and tell us at what level they would introduce the minimum wage and what they would do about differentials. I urge the relevant Opposition spokesman to tell the House exactly what Labour's policy is.

Mrs. Anne Campbell

What is the Minister prepared to do for my constituent: a 50-year-old divorced woman who is trying to find work? She is not able to take up work because the only jobs that she can find are low paid and part time and if she accepts them she is then disqualified from benefit and cannot afford to keep herself. What will the Minister do for people in those circumstances?

Mr. Oppenheim

One of the schemes that we have to help such people is the back-to-work bonus. [Interruption.] Opposition Members may deride that, but it is designed to help such people. Obviously, Opposition Members are not interested in those practical measures.

The hon. Member for Cambridge (Mrs. Campbell) also ignores the fact that the number of full-time jobs has increased significantly in the past year, in contrast to what is happening elsewhere in Europe.

Sir Michael Neubert

When considering the interests of young people and others, is it not instructive to draw on our experience of the minimum wage in the United Kingdom? Is it not the case that, in those industries which were formerly covered by wages councils, not only have average earnings been sustained and even improved but the number of people employed has increased?

Mr. Oppenheim

My hon. Friend is absolutely right. There is a further point: a single man—

Mr. Olner

No, he is not.

Mr. Oppenheim

My hon. Friend is absolutely right. The figures clearly show that employees who were covered by wages councils have seen faster wage rises than has the work force as a whole. They are the facts and if the hon. Member for Nuneaton (Mr. Olner) cares to deny them, he will have to produce other facts to counter them.

Mr. McCartney

That was a contemptible and a shabby question from an hon. Gentleman who gets paid £1,000 per minute for a question.

Madam Speaker

Order. If the hon. Gentleman has a question to put to the Minister, I will hear it; otherwise I shall call another hon. Member.

Mr. McCartney

Will the Minister accept that we are the only country in Europe which does not guarantee a minimum wage? This is the only Government in Europe who give pay jackpots to the boardroom while there is low pay in the workplace. Is it not the case that, under the jobseeker's agreement, the Government will force people to take employment for £1 per hour or lose their right to benefit?

Mr. Oppenheim

The hon. Gentleman should check his facts because only half the European Community countries have statutory national minimum wages. If the jobseeker's allowance is such an evil, why does his party not pledge itself to abolish it when it is in government?

Let us not have any nonsense about the Opposition not wanting to give policy pledges, because they have just given such a pledge for a £75 back-to-work bonus. If the JSA is such an evil, I invite the hon. Gentleman to commit himself here and now to abolish it if his party returns to power after the next election.

Mr. Ian Bruce

Will my hon. Friend confirm that the companies which are actually paying below the £4 level per hour are often those with marginal businesses such as rural sub-post offices and corner shops? Does he believe that those businesses are more likely to stay in business with a minimum wage of more than £4 a hour, or go out of business and destroy even more jobs?

Mr. Oppenheim

The figures clearly show that only four in 1,000 adult full-time workers earn less than £2.60 and that 60 per cent. earn more than £5.30 a hour. It is also interesting that a single man in the bottom 10 per cent. of earnings would have seen his take-home pay increase by more than 23 per cent. since 1979, whereas the same person would have experienced a fall of 1 per cent. between 1974 and 1979. The only time Britain was a low-paid, skivvy economy was not under the Conservative Government, but under the Labour Government.