HC Deb 11 July 1995 vol 263 cc739-41
12. Mr. Jon Owen Jones

To ask the Secretary of State for Education and Employment what steps she is taking to tackle the problem of low pay. [31793]

Mr. Oppenheim

Since 1979, the real take-home pay of a single man in the bottom 10 per cent. of earnings has risen by £27 a week and that of a single woman in the bottom 10 per cent. has risen by £29 a week. We all want pay levels for the less well-off to rise even further but it has to be sustainable, based on improving productivity, efficiency and competitiveness. To suggest that pay can rise just by political diktat without improved productivity is dishonest and deceitful and would undoubtedly cost many people's jobs.

Mr. Jones

I am glad that the Minister has the same fervour and commitment to his policies as the former Secretary of State for Employment, but in the deregulated wage market of the global economy, what determines the base rate without a minimum wage? Malthus would have said that it was the level at which workers can just survive and do no more than perpetuate their own numbers. What would the Minister say the base rate should be? Is it 50p an hour? How low will the Minister go?

Mr. Oppenheim

I am not sure what the hon. Gentleman's base rate should be, but I am glad that he has bothered to turn up for questions today. The only sustainable way to improve people's earning power is to improve their education and training so that they are more productive and can earn more on a sustainable basis. The Labour party's policies are misguided. Even Sir Gordon Borrie, chairman of Labour's Social Justice Commission, wrote in The Guardian recently—[Interruption.]

Madam Speaker

Order. I insist that the hon. Gentleman stops barracking from a sedentary position. Mindless barracking gets the House nowhere. It does not advance the quality of our debate one bit.

Mr. Oppenheim

Sir Gordon Borrie wrote in The Guardian: The interesting question is at what level a minimum wage should be set. Too high a figure will cost jobs; too low a figure will not be worth having. I could not agree more. No amount of waffle and double-talk can hide Labour's attempts to deceive the less well-off into thinking that there is an easy, cost-free way to raise pay. There is not. Labour is deceiving the less well-off.

Mr. Forman

In the interests of maintaining Britain's global competitiveness—a very important national interest—does my hon. Friend agree that, in so far as it is necessary to use social transfers to support those on low pay, family credit and similar forms of benefit support are much better than the minimum wage, which could distort and prejudice our competitive position?

Mr. Oppenheim

My hon. Friend is absolutely right. The best way to improve living standards for everyone, particularly the less well-off, is to improve the productivity, efficiency and competitiveness of the British economy. It is because we are now so much more efficient and productive than we were in 1979 that pay at all levels has risen substantially, not least for the less well-off.

Ms Rachel Squire

Does the Minister agree that it is waffle and double-talk to oppose a minimum wage while the Government spend £2.4 billion subsidising sweatshop pay through the benefits system? Does the Minister further agree that it is an insult to the people of Dunfermline and west Fife and of many other communities that the Government's only reward, when there is a desperate need for decently paid jobs, is to spend another £75 million on an additional top-up earnings benefit, rather than provide productive work?

Mr. Oppenheim

One of the biggest myths in the Opposition's campaign for a minimum wage is that it would get rid of all in-work benefits, yet the Opposition spokesman was told recently by Andrew Dilnott, head of the Institute for Fiscal Studies, that even a minimum wage of £8 per hour would leave many people claiming income support. If it is now Opposition policy to get rid of all in-work benefits, they should say so.