HC Deb 07 March 1995 vol 256 cc134-6
9. Mr. Duncan Smith

To ask the Secretary of State for Employment if he will make an assessment of the effects of a national minimum wage on the employment prospects of young people

Mr. Oppenheim

In Belgium and France, which both have a national minimum wage set at a significant level, youth unemployment is, respectively, one and a half times and twice as high as youth unemployment in the United Kingdom. I will make an estimate of the effects of a national minimum wage in the United Kingdom when the Opposition decide the level at which it would be set and what they would do about differentials. I notice that they are laughing at that.

Mr. Duncan Smith

Does my hon. Friend agree that it is easy to talk about a minimum wage but more difficult to set the level? Does he recall that when President Clinton came to power in the United States he said that he would increase the rate from $4.25 to $4.75 but has failed to do so because he recognises how damaging that would be? Does he further agree that just talking about the minimum wage without setting the level is sheer tokenism and that the Opposition would do well to understand that?

Mr. Oppenheim

I entirely agree with my hon. Friend. It is interesting that the hon. Member for Peckham (Ms Harman) tittered loudly when my hon. Friend said that Labour had not set a level for the minimum wage. It is also interesting that the Labour leader last week scuttled off to the TUC to say that Labour would not set a level until after the next election. Labour is telling the low-paid that it will wave a magic wand and, at no cost, will increase their standard of living, but it is not prepared to be honest enough to reveal the cost in terms of lost jobs. That is the low level of opportunism and cynicism to which Labour policy has now sunk.

Mr. Ashton

Is the young Minister aware that it is now 20 years since a Labour Government introduced equal pay for women and that the Tories voted against it, saying exactly what they are now saying about a minimum wage—that it would destroy jobs? Is he aware that when the young women working at Marks and Spencer got their extra money they went to Debenhams and bought curtains and that when the people at Debenhams got their extra money they went to C and A and bought children's clothes, thus increasing the number of jobs?

Mr. Oppenheim

The not quite so young Minister will reply that the hon. Gentleman is mistaken in referring to the previous Labour Government because the previous two Labour Governments refused to implement a minimum wage. They, at least, were honest enough to admit that there was nothing they could do about the problem of differentials. I quote to the hon. Gentleman his former colleague, Lord Healey, who only a couple of months ago said on Radio 4:

Don't kid yourselves—the minimum wage is something on which unions will build differentials … and therefore the minimum wage becomes a floor on which you erect a new tower. Until the Opposition have the honesty and guts to tell the House at what level they would introduce the minimum wage and what they would do about differentials, the House will treat their policy with nothing but the contempt that it deserves.

Mr. Sykes

Will my hon. Friend ignore the old fogeys in the Opposition and confirm that policies such as the absurd social chapter and the minimum wage are shredding jobs in Europe even as we speak? Is he aware that a large company in my constituency cannot afford to build a factory in France because of such polices and has decided to double its production line in Scarborough instead?

Mr. Oppenheim

My hon. Friend is quite right. Unemployment in European countries such as Belgium and France, where the minimum wage is set at a significant level, is far higher than in Britain. The situation in the United States is also instructive. For years, successive Governments hardly raised the minimum wage. When he came to power two and a half years ago, President Clinton committed himself to raising it but he has done absolutely nothing about it because his own Labour Secretary, Robert Reich, said that it would threaten the recovery. Even the left-leaning Democratic Leadership Council recently said that the

Minimum wage is anachronistic, it's a loser, it's got no life". No wonder it is Labour party policy.

Ms Harman

Will the Minister accept that I am not prepared to be accused by him of tittering? It is puerile—[Interruption.]It is puerile and it demeans the debate.

Will the Minister confirm that the taxpayer now has to fork out £2.5 billion a year to top up the pay of the low-paid through benefits? Is not that nothing more than a subsidy for bad employers? Does he not realise that that sum will continue to spiral upwards unless he accepts that there should be a floor under pay with a national minimum wage? How long will he carry on topping up the bottomless pit that he has created in pay?

Mr. Oppenheim

The hon. Lady was tittering; she is now wittering. She fails to mention that a minimum wage would cost the taxpayer more because it would increase unemployment, as it has in France, Spain and Belgium. If she is serious about that policy—if she is serious about putting a floor under low pay—why cannot she tell the House at what level a Labour Government would introduce the minimum wage, and what she would do about differentials?

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