Minimum Wage (Hansard, 12 June 1997)

§ 2. Miss Kirkbride
To ask the Chancellor of the Exchequer what estimate he has made of the impact of a national minimum wage on the cost of public sector pay. [1586]

§ Mr. Gordon Brown
A minimum wage is in principle both fair and efficient. The impact of the minimum wage on public sector pay will depend on the level at which it is set. That is a matter for the Government to decide, when we have the advice of the Low Pay Commission, taking into account the wider effects on the economy.

§ Miss Kirkbride
Will the Chancellor confirm figures given by the Foreign Secretary, when he was shadow Secretary of State for Health, that a minimum wage of £4 per hour would cost the National Health Service an extra £500 million a year?

§ Mr. Brown
First, I welcome the hon. Lady to the House. She was a distinguished parliamentary correspondent and is now a Member of Parliament, having moved from a larger Conservative institution—The Daily Telegraph—to a smaller one, the parliamentary Conservative party.
The claim about the minimum wage was made repeatedly by the Conservative party throughout the general election campaign. There is no evidence for the statement other than the accusation made by the former Secretary of State for Health, who has continually suggested this. Given the traditions of Winston Churchill, Harold Macmillan and the right hon. Member for Old Bexley and Sidcup (Sir E. Heath) in supporting a minimum wage, it ill befits the Conservative party to deprive the people currently being exploited in the labour market of the dignity of a minimum wage. I believe that both sides of the House should accept the principle of a minimum wage. The application of it will be a matter for the Low Pay Commission, on which business—including small business—is represented. It is about time the Conservative party joined the modern world.

§ Mr. Skinner
Is my right hon. Friend aware that there is a popular demand throughout the country for a national minimum wage, which was best exemplified in the mandate that we received at the general election? On several occasions, my right hon. Friend and others on the Front Bench have said that they will consult, among others, people in the business fraternity. As several trade 1263 unions have now passed resolutions for a minimum wage of £4 and over, including Unison at £4.42 yesterday, will my right hon. Friend guarantee that he will pay some attention not only to those in the business community but to the real wealth creators—the workers?

§ Mr. Brown
I am grateful to my hon. Friend for supporting the principle of a minimum wage. [Interruption.] I should have thought that Conservative Members would be listening to the electorate more by supporting the case for a minimum wage—[Interruption.]—than by defending huge salary rises in the privatised utilities. [Interruption.]

§ Madam Speaker
Order. Hon. Members must stop shouting.

§ Mr. Brown
The Opposition have learnt nothing from the past few weeks.
The specifics of the minimum wage will be dealt with by the Low Pay Commission, which will receive representations. Business and employees are represented on it, and small businesses are specifically guaranteed representation on it. That is the right way to set a minimum wage. I may also tell the Opposition that the experience in America is that a minimum wage is not only fair and efficient but helps to create jobs.

§ Mr. Kenneth Clarke
The Chancellor was very courteous to my hon. Friend the Member for Bromsgrove (Miss Kirkbride), but he quite deliberately avoided the point of her question. Will he accept that, unless the minimum wage is set at a level at which it makes absolutely no difference to any public sector pay, it will affect the cost of public services? If he sticks to his commitment not to raise public spending, the national health service and others will face a choice between cutting services or cutting jobs. Faced with the minimum wage, they will be able to do nothing else.

§ Mr. Brown
All those questions will be taken into account in setting the minimum wage. I remind the right hon. and learned Gentleman, who is trying to re-establish "one nation" traditions in the Conservative party, that his predecessors as shadow Chancellors and as leaders supported the principle of a minimum wage, and until the 1980s there was all-party consensus about the need for wage protection through wages councils.
As for public sector costs, the Government are having to pay out huge sums in family credit to cover wage levels—set by employers—which are lower than they should be, instead of helping, as we should, people who are in poverty. The costs of family credit are escalating as a result of there not being a minimum wage and because employers are able to set wages lower than they should. It is about time that Conservatives started to show concern about the thousands of people earning £2 or less per hour and in some cases less than £1.50 per hour. The Conservative party had better soon restore its belief in "one nation" Conservatism.