§ 11. Sir Michael NeubertTo ask the Secretary of State for Employment what assessment he has made of the effects of a statutory minimum wage on the employment prospects of unemployed people.
§ Mr. OppenheimA statutory minimum wage would destroy jobs and job prospects. Set at two thirds of male median earnings and assuming full restoration of differentials, 2 million jobs could be lost. Even set at half male median earnings and assuming only half restoration of differentials, 750,000 jobs would be lost.
§ Sir Michael NeubertWill my hon. Friend confirm that a report by the Institute of Fiscal Studies showed that a national minimum wage would benefit the richest 30 per cent. of the population more than the poorest 30 per cent.? Does not the adoption of such a policy sit rather oddly with the Opposition's claim that they will be tough on success and tough on the rewards of success?
§ Mr. OppenheimMy hon. Friend is right. One of the major problems with a national minimum wage is that it would benefit better-off families disproportionately because many low-paid people are trainees or young workers who live in families with two or three incomes, so the national minimum wage would increase unemployment among poorer households and increase wealth in better-off households.
§ Mr. EasthamI remind the Minister that when the Government abolished the wages councils three or four years ago they advanced the very same arguments. They said that abolition would create more jobs, but a horrendous number of young people are now without jobs. How does the Minister explain that?
§ Mr. OppenheimThe hon. Gentleman predicted when the wages councils were abolished that the wages of former wages council workers would fall; in fact, they have increased slightly faster than the wages of workers in the rest of the economy. I also remind the hon. Gentleman that the previous Labour Government abolished no fewer than 11 wages councils, affecting no fewer than 600,000 workers.