Low Pay Commission (Hansard, 5 June 1997)

§ 13. Dr. Godman
To ask the President of the Board of Trade if she will make a statement on her proposals to create a low pay commission. [667]

§ Mr. Ian McCartney
We have appointed Professor George Bain as chairman of the independent low pay commission. The other commission members, who will include representatives of employers, including small business, and employees, will be appointed as soon as practicable. The commission will undertake wide-ranging consultation and take account of the economic circumstances prevailing at the time before making its recommendation to Government on the level at which the national minimum wage might be introduced.

§ Dr. Godman
I offer my compliments to my hon. Friend on his appointment. I had a wee bet with his sister Irene that he would become a Minister in a Labour Government. Unfortunately she has not yet paid up. Perhaps he could speak to her.
Many hundreds of families in my constituency who receive family credit will welcome the announcement about the low pay commission. Does my hon. Friend 544 agree that family credit is a massive state subsidy to employers, many of whom are too mean to pay their employees a decent wage?

§ Mr. McCartney
I thank my hon. Friend for his kind remarks about my sister. Perhaps her tardiness makes her a candidate for a seat on the low pay commission.
My hon. Friend raises a critical issue. Businesses in Britain have come to accept that low pay is deeply anti-competitive and anti-business. Employers who follow good employment practices are undermined by employers who use the tax system to subsidise their labour costs at the expense of those good employers. We need a balance between in-work benefits and the minimum wage. That is what the low pay commission is about and it is why so many employers want to serve on it. If we are not careful, we shall have to book Wembley stadium for the commission's first meeting.

§ Mr. Kenneth Clarke
Does the Minister agree with Professor George Bain, the new chairman of the low pay commission, who is reported to have said two days ago of the minimum wage: I would be surprised if there were not some job losses.

§ Mr. McCartney
The right hon. and learned Gentleman has entirely misquoted Professor George Bain. Professor Bain said that, if the minimum wage were set at an inappropriate level and did not take economic circumstances into account, there could be job losses. There is no evidence whatever that a minimum wage set at a sensible level in terms of economic circumstances would cause job losses. It will assist in the creation of jobs. Under the previous Administration, more than 200,000 jobs a month lay vacant on Employment Service records because people could not afford to take them. We need a minimum wage that is set in such a way that it makes jobs affordable, as part of welfare to work, to move people off benefit into work, giving them an opportunity to earn.
How can members of a previous Government, who allowed former Tory Ministers who lost their seats in 1992 to receive up to £500 a day for turning up at quango meetings, stand here and criticise 800,000 families who are trying to survive on under £2.50 an hour?