HC Deb 09 March 1998 vol 308 cc247-75

Amendments made: No. 32, in page 44, line 45, column 3, at end insert 'In section 12(5)(a), the words "on account of the payment of wages to him at less than the minimum rate applicable or".'.

No. 38, in page 45, line 10, column 3, at end insert `Section 12(4)(a).'.—[Mr. Ian McCartney.]

Order for Third Reading read.

Motion made, and Question proposed, That the Bill be now read the Third time.—[Mr Betts.]

6.30 am
Mr. Ian McCartney

I know that it is early, but it is late for those of us who have been working on the Bill since 3.30 pm yesterday—and, indeed, for those of us who have been working on it for 20 years. It has been a long time coming. It was in February 1912–86 years ago—that the then leader of the Labour party moved on the Floor of the House an amendment to the Loyal Address to the then King's Speech, calling for the introduction of a national minimum wage. It is astonishing that it has taken 86 years for us to reach this stage, but, having got here, we intend to press on with the Bill.

The Bill is a straightforward and direct attack on the scandal of low pay. We shall introduce it and establish a principle of universality, clarity and simplicity. It will be truly a national minimum wage, just in time for the 21st century. This is a priority policy, on which Labour Members are proud to have won the general election. It is right, fair, just and sensible.

I thank all hon. Members who have spoken in support of the Bill on Report, on Second Reading, and during the magnificent effort in Committee. The time is right—indeed, overdue—for a minimum wage to be introduced, on both social and business grounds. Together with tax and benefit reform, it can promote work incentives and form part of a strategy to make work pay. It will ensure greater decency and fairness in the workplace and tackle the problems of in-work poverty.

Employees deserve good terms and conditions, and protection from exploitation. This measure reflects our determination to be a force for progress and social justice.

The Government are dedicated to fairness and decent minimum standards at work for all workers, and decent minimum standards include the right to a fair day's pay for a fair day's work. We have seen the results of the policies followed in the United Kingdom during the past 18 years by the Conservatives: the largest gap between rich and poor since the days of gas lamps and the Hansom cab. Conservative policies have led to a situation where a security guard can be expected to work between 85 and 100 hours a week, at an hourly rate of £1.80, and provide his or her own dog and van.

Nearly 1 million workers in Great Britain are currently paid less than £2.50 an hour. That is the Conservatives' legacy, and they should be ashamed of it.

That is why we established, in 90 days of the Labour Government, a Low Pay Commission made up of employers, employee representatives and specialists in the field, to make recommendations for a statutory rate for the minimum wage and on other issues. The Low Pay Commission will soon complete its work and make its proposals. As soon as it has done so, the Government will act and respond quickly, to ensure that we go forward and fully implement the minimum wage as soon as possible.

Throughout debates on the Bill in the House and in Committee, we have heard the familiar old parrot cry of the Conservatives: "Low pay or no pay." That is their strategy. They have argued that job losses will follow the introduction of a minimum wage, despite the fact that there is absolutely no evidence that a minimum wage, sensibly set to take into account economic circumstances, will lead to job losses. They have lost the argument in the country and in the House. We will move forward with some speed with the introduction of a national minimum wage.

The Conservatives have also lost the argument within business. Increasingly, business in Britain sees the economic case for the national minimum wage. Businesses are sick and tired of being undercut by cowboy employers paying £1.20 or £1.30 an hour, not competing on goods and services, but simply driving wages lower and lower. Britons cannot survive in a low-pay economy. We cannot compete overseas with Vietnam on the basis of 20 cents an hour. Our country deserves better—it deserves investing in our work force and in their employability and training and the commitment to minimum standards and the production of goods and services that are world beaters. One cannot do that if one simply wants to drive down wages to the lowest common denominator.

For those reasons, businesses increasingly see the business case for the national minimum wage. That is why business abandoned the Conservatives in Committee—not one business in Britain has been prepared to put its head above the parapet and support Conservative Members, because businesses do not want to be associated any more with the concept of poverty pay. Only those Conservative business people who are native to the Conservative party have stopped by the line of, "Low pay or no pay." We will not accept that from anyone, particularly from big backers of the Conservative party who earn millions of pounds a year in the City, while condemning millions of people in Britain to such low pay. It is rank hypocrisy and the Bill has revealed the hypocrisy of Conservative Members.

Conservative Members can no longer simply state that the Confederation of British Industry and other employer organisations do not want to participate in the early implementation of the minimum wage. The CBI and others want fair implementation of the legislation. Increasingly, employers are co-operating with the Government and the Low Pay Commission to ensure that that is the case.

The Tories are left abandoned, and rightly so. They cannot get out of the time warp they are in; for nearly 20 years they thought that Britain's success relied simply on driving down the pay and conditions of its work force, when it was crying out for investment in its work force, not damaging it and destroying it. They left us with a legacy of low pay, and of unemployment, which was twice the level that it was when the previous Labour Government left office. That is the legacy of the Tory's failed economic policies.

In closing, I want to consider what Alan Fisher and Bernard Dix of the National Union of Public Employees appreciated more than 20 years ago. In their book, "Low Pay and How to End It", they said: the first step in the construction of a policy to eliminate low pay must be the acceptance of the people that there is a level of wages below which nobody should be expected to work. This is an act of political commitment which has been dodged in most of the earlier discussion on low pay but which is essential if the problems of the low paid worker are to become a matter demanding an immediate practical solution rather than remaining the subject of detached academic curiosity. With public acceptance of this principle we can begin to fill out the arguments and some of the problems which confront us in the implementation of the principle in the full knowledge that we are committed to action rather than never-ending discussions. The three crucial factors that those eminent trade unionists identified were public acceptance, political commitment and a practical solution. We now have public acceptance of the principle as shown by the result of the general election. The Bill and the setting up of the Low Pay Commission are the confirmation of our political commitment and our arrival at a practical solution. Now is the time to end the academic discussion and transform the dream into a reality. I commend the Bill to the House.

6.38 am
Mr. Redwood

I pay tribute to my hon. Friend the Member for Daventry (Mr. Boswell) for the great leadership that he has shown in Committee and tonight to try to get proper examination of this problematic legislation and to my hon. Friends the Members for South Cambridgeshire (Mr. Lansley) and for Buckingham (Mr. Bercow), who made their first appearance at the Dispatch Box and spoke extremely eloquently on the amendments that they moved. I also pay tribute to all my hon. Friends who spent much time in Committee and who, during tonight's brief debates, have tried to make some sense of this rag-bag of a Bill, which splits the Labour party—[Laughter.] It splits the Labour party—some Labour Members, in speaking to an amendment tonight, said that they greatly disliked aspects of the Bill.

There have been wars between Ministers. Like most hon. Members, I know that the Minister of State is not at all happy that the armed forces are to be exempted from the Bill. He and his colleagues fought the Ministry of Defence for several weeks, but their resistance crumbled and he now has to defend a proposition that he does not like. That is why he always returns to grand principles and grand statements and reminds us, genuinely, of the campaigning work that he has done on this issue over many years.

It will not wash, however. When we see the final proposals, all the exempted groups and the low level at which the minimum wage will be set compared with what Labour Members wanted, we shall know that the damaged and divided Labour party is not happy about the Bill, and that it is still in trouble trying to find out how this country's economy works.

I shall describe the context of the Bill, which is another thing that the Labour party will not want to hear. Manufacturing industry is now in grave trouble thanks to the economic policies that have been pursued in recent months under the Chancellor of the Exchequer and his Labour colleagues. Every day, I receive another letter or telephone call from someone in manufacturing industry, telling me that it is impossible to compete when sterling and interest rates are so high. People tell me that costs are the problem. The last thing that they want is an enforced large wage increase that will have an impact not only on lower pay, but on differentials, which is the likely result of the Bill.

Dr. Desmond Turner (Brighton, Kemptown)

The right hon. Gentleman seems to be terribly concerned about the Bill's effect on manufacturing industry, but, to the best of my knowledge, no serious manufacturing company pays workers at a lower rate than even anywhere near what the minimum wage might offer. What is the relevance of his point? Low wages have no place in serious, modern business, so what is he talking about?

Mr. Redwood

The hon. Gentleman obviously knows more than the Minister about the level at which the minimum wage will be set—the Government have been absolutely quiet on that fundamental issue. The hon. Gentleman did not listen to what I was saying. I said that business is worried about the Bill's consequences for differentials. If, by law, the lowest levels of remuneration must be raised, the skilled and the semi-skilled who already receive more will, of course, want proportionate increases.

Even the Cabinet has worked that out. As we read in the papers the other day, Cabinet Ministers are depressed about the possibility that, in comparison with the pay of junior Ministers, their pay will increase rather modestly in percentage terms. Cabinet Ministers are saying that they need the differentials to be preserved—they want the same percentage increase as junior Ministers, even though that would mean that they would receive a much larger pay rise.

One of the big worries of Conservative Members is that the Bill could trigger a wage increase of some magnitude, which, according to the Chancellor of the Exchequer, would be deeply damaging to jobs and economic prospects.

Mr. Chris Pond (Gravesham)

Given that the right hon. Gentleman supported the previous Government's decision to abolish the minimum wage system that existed at the time, and given that he has so many reservations about the Bill, will he say categorically whether—at some time in the future, in circumstances which it is difficult for us to imagine, with his party again in government—he would repeal the Bill? May we have a straight answer?

Mr. Redwood

We expect the governing party to do a lot of damage in the next three years, before going to the country. When we get nearer the general election, my right hon. and hon. Friends and I will decide which of the many undesirable measures we intend to repeal. I may well then be able to answer the hon. Gentleman's question. We will examine the whole range of damage that the Government are doing and come to a considered judgment about our first legislative programme, which we will put to the country. We will then win that general election.

Labour Members should pay more attention to what the Chancellor says and does. He recently read the riot act to the British economy and British business. He told everyone that if wages go up at all quickly over the next year or two economic damage will be done, hinting that he might even take retaliatory action by raising taxes or reducing public spending. He said that jobs will be lost if pay increases accelerate.

The Chancellor clearly does not know what to do, because pay increases, especially in the service sector, are accelerating. We have two economies: the manufacturing economy, which is moving into recession, with output falling, and the much bigger service economy, which is extremely buoyant, with wages rising rapidly by the standards of the recent past.

The Bill, emanating from the Department of Trade and Industry, is in complete opposition to the Chancellor's view of what we need to do on wages. It is designed to increase wages by perhaps 20 or 25 per cent. at the lowest end of the spectrum—if we knew the rate of the minimum wage, it would be easier to do the sums—with proportionate increases for the skilled people in good bargaining positions who want to preserve differentials.

The Minister tells us that that will have no impact on unemployment, but the Chancellor tells us that any wage increase will affect unemployment. He is even worried that the relatively small increases of the past year or so could accelerate just a little and cause problems. [Interruption.] Labour Members are now quibbling with the Chancellor. I am expressing not my view, but his; it is a view about which he made many speeches and issued a press statement, because he was so worried about accelerating wages.

The essence of the welfare-to-work programme is to try to subsidise employment—to lower its costs—so as to create more jobs. We wish the programme well, but we believe that the best way of creating jobs is to have a low-tax economy, with less regulation and law, that is more competitive and allows more small businesses to be set up and to create the jobs that are needed.

The Chancellor's scheme of lowering the costs of employment through subsidies is about to be undermined—in a couple of years, when the full impact is felt—by legislation designed to raise industrial costs.

The Minister owes the House a proper explanation of what impact the Bill will have on inflation. He should by now have a clear idea in his own mind—even if he will not share it with the House—of the likely level of the minimum wage. From his many impassioned speeches, it is clear that he wants to increase wages. That is the purpose of the Bill. He understandably wants many people to be better paid, as would I, but the argument between us concerns whether that can be done by legislation and whether the Bill will have worse consequences than he is letting on for those hoping to benefit.

Conservative Members believe that higher pay must be achieved by economic success. Some Labour Members believe that they can achieve it by a stroke of the legislative pen. They are likely to trigger a big increase in differentials and, if we are to believe the Chancellor, unemployment problems.

The Government have also been unwilling to share with the House the true costs of the measure to the taxpayer and the Government accounts. One of their forecasts suggests that the cost will be £200 million on general public sector costs, if the minimum wage were set at £3.75 an hour. That is an underestimate in itself, but we must add the much bigger figures that will tumble through to the public sector wage bill if we assume some increase in differentials. The true cost is likely to be several times the estimate of £200 million.

We need a proper explanation from the Government of what the Bill will do to their public borrowing plans and their tax-raising plans, and how the Chancellor will find the additional money at a time when the Prime Minister is lecturing everybody on how they must not increase spending and must run a tight ship.

The Government must also consider the cost of the higher unemployment that is likely to result from the consequences that I have described. At some point, there will, unfortunately, be a turn for the worse in the favourable trends of unemployment that have resulted from the Conservative economic policies that have been followed since the end of 1992. The Bill could well be one of the factors that tip the balance the other way as it makes its job-destroying progress. To the effects of the Bill must be added the action that the Government will take on trade union reform and on implementing the social chapter, which we have warned is likely to lead to further job losses.

The lack of any indication of the level of the minimum wage—[Interruption.] I am glad that Labour Members are still awake. It is good to see that so many Labour Members have shown enough interest in the Bill to stay with us so far. That is good of them, as we have not had a Division since 10 o'clock. They are obviously fascinated by the debate and they will have heard many fine speeches by Conservative Members.

Mr. Ian Bruce

Given that the Government have been in power since May, could it be that Labour Members were expecting that the Minister, in his speech on Third Reading, would share with us his expectations about the level of the minimum wage? The Minister kept talking about terrible poverty pay, but he would not tell us what he believes that to be.

Mr. Redwood

My hon. Friend is right. What does the Minister consider to be poverty pay? He is impassioned about it, but he cannot name a figure or even give us a ball park idea.

Mr. Pond

Would you repeal the Bill?

Mr. Redwood

I do not have to answer that question because I am not recommending a minimum wage. [Interruption.] The Minister is recommending a minimum wage and he should tell us the figure at which it will be set.

In 1992, Labour said that the minimum wage had to be £3.40 an hour. If that figure were updated in relation to national earnings, it would reach £4.60 an hour▀×a figure well above any of those that have been leaked to the newspapers as the likely level of the minimum wage. Even if we only link the £3.40 figure to inflation, it would have to be nearly £4 an hour to validate the promise made in 1992. If we believe the trade unions and what we read in the newspapers, the level is likely to be £3.60 and, therefore, the Minister's ambition will be thwarted. The Labour party's ambitions of 1992 will have come horribly unstuck because the Treasury has had a go at them. [Interruption.]

Mr. Bercow

Does my right hon. Friend agree that, in addition to the absurdity of Ministers still failing to offer a view about the level of the minimum wage, it is absurd that—10 months into this Government—not one of the Labour Members who are making stupid and boisterous observations from sedentary positions has offered an independent view on the level of the minimum wage? Are not Labour Members just a bunch of tired and emotional wrecks?

Mr. Redwood

My explanation of Labour Members' conduct is that they are under the thumb of the Minister without Portfolio, who has told them not to name a figure for fear of embarrassing the Chancellor and the Government. We have Hamlet without the prince. We are invited to a meal with no food on offer, and we are not even sure how many people will be invited; there are still arguments about who should be covered by the legislation. We think that a retreat is under way on coverage and on the level of the minimum wage. The Chancellor is likely to fight on and demand a minimum wage much lower than many Labour Members would like.

As my hon. Friend the Member for Buckingham said, it is extraordinary that in a party that claims that this is a flagship measure in which it believes, not one Labour Member is prepared to name a figure for an acceptable minimum wage. I shall give way to anyone prepared to name a figure. It appears that no Labour Member will.

Mr. Pond

I was hoping to get an answer to my earlier intervention. Would the right hon. Gentleman repeal the legislation, yes or no?

Mr. Redwood

I made it clear what our answer was on that. There is no point in boring the House by going over it again. There is no answer from Labour Members on what would be an acceptable minimum wage. They cannot say that they live in fear of the bosses cutting them off. They know that the Chancellor is worried about a minimum wage that would raise anyone's pay anywhere in the country.

We have a similar problem with scope. We were told by the Minister and by the President of the Board of Trade that everyone would be covered. That was their proud boast when they first came to the House with the matter. We learn now that young people are likely to be left out, that anyone under 26 is deemed to be young for that purpose and that the promise will be broken for them. We learn that the armed forces will be left out, although the Minister was unable to explain why. He could not say why people who take such risks for our country on active service would not get the protection that he sees in this legislation; nor was he able to confirm that they would always be earning above it. [Interruption.] The Minister is kind to offer me his water but I have some of my own. I am sure that he will need his.

We need to see what will happen to young voters. In the run-up to the general election, I remember Labour Members telling people that they would be covered by the legislation. They said, "Vote Labour and we will legislate a pay rise for you." We objected. We doubted whether they would be able to do it and feared that some young people would be issued with a redundancy notice rather than a pay increase. Labour spokesmen reassured the electorate. They did not think that there would be redundancy notices. They were wrong about that. They carried on implying to the electors that every young person would get the full benefit of the minimum wage. Now the Minister looks grumpy, knowing that he cannot deliver. [Interruption.] Now he is trying to cheer up. He knows that he cannot deliver to the young people of Great Britain on that fundamental election promise.

The Minister should also think again about the position of small businesses. They are the main means by which new jobs are generated in Britain. Often, they start off with modest pay and limited hours for the job on offer and gradually build themselves up and can offer something better. He is in danger of destroying the opportunity for small businesses to get started. He is also destroying the opportunity for young people to start off in a modest job on modest pay—more modest than he or I would like—and going on to something better. The best way to get a job is to have a job. The best stepping stone to a better job is to have a not-so-good job. The Minister is in danger of removing some of those important stepping stones from the paths of many people to bigger opportunities and better jobs. Clearly, we are seeing a Government who are still divided over whether unemployment will be a serious problem. The Minister is fighting and losing a rearguard action over the question of the scope and coverage of the legislation.

We have also failed to get much out of the Minister on the question of regional variations. He must know that there are big regional variations around the country in the amount of pay offered to people; he must also know that there are big differences in the costs of living around the regions, depending on housing and transport costs and other important items in the family budget. The Bill proposes to treat everybody the same, wherever they are; it offers no recognition of the fact that different sums are needed to live to the same standard in different parts of the United Kingdom. The costs are simply not the same.

On Second Reading, I asked the President of the Board of Trade to explain to the House whether she thought a factory worker on £4.50 an hour in London was better or worse off than a waitress living outside London on £3 an hour who received free board and lodging. It is arguable that the waitress is getting more than the factory worker in London; it is certainly true that the factory worker faces high housing and other general living costs by virtue of living in the capital city. However, there has been no recognition in Committee or on Report of the regional problem. I have read all the Committee stage Hansards and know that the Minister failed to come up with a scheme for recognising the different costs of living and the fact that different amounts of pay are needed in order to handle those different costs. The Minister should think again about the regional issues his Bill opens up.

Mr. Forth

Following that line of argument, which I completely accept, would my right hon. Friend say that the likely or possible impact on employment levels will vary regionally and that, paradoxically, the regions that will be hardest hit and most adversely affected will be those where pay happens to be lower? Those are probably the sorts of region that, for as long as any of us can remember, Labour Members have been telling us have been disadvantaged. Will not this legislation further disadvantage those regions that are already struggling?

Mr. Redwood

That is the cruel irony of the Government's position: the regions that need most help in pricing people into jobs are the regions that will suffer most from the legislation, because they will have to accept a national average. In the regions that currently have the worst unemployment and the lowest pay, there will be the biggest problem and we are most likely to see job losses; whereas in the areas that are already overheating, the minimum wage will not present the same sort of problems in terms of unemployment, but it will offer no help to people because so many of them will already receive more than the minimum wage.

In an earlier exchange, I was asked whether there were jobs being offered in my constituency below the likely level of the minimum wage. I was able to confirm that, in my constituency, which has very low unemployment and a successful economy, people are not offering or accepting jobs at less than £4 an hour, because there is no need to. That shows how economic success can deliver higher pay and it shows how the minimum wage will be an irrelevance in the most successful parts of the economy, whereas it will be a hindrance or a disaster in those parts of the country that need the most help.

I was talking about the definition of pay. We have not heard a proper explanation from the Government of how tips, bonuses, share incentives, free accommodation, free meals and other forms of remuneration will be treated. Those are complicated matters and, so that we have a fair system, the Minister should set out—before the Bill is passed—how the calculations are going to be done to ensure comparable treatment between people remunerated in different ways.

I am not sure whether the Minister has thought through the issue of piece rates and what would happen in a factory where most workers were above the minimum wage on a piece rate system, but where a few workers—perhaps trainees or those fairly new to the job—fell below the minimum wage from time to time. Would it be fair for their pay to be made up? Would that not undermine the point of the piece rate system? Is this the Abolition of Piece Rate or Incentive Pay Bill? The Minister has not told us how he would handle that problem.

The Bill reflects another well-known new Labour trait. The Labour party campaigned against quangos and argued that they are not accountable and that matters should be dealt with by elected people. We now discover that a whole area of policy will be delegated to a quango under the Bill. The Low Pay Commission will have a continuing role reviewing the level of the minimum wage. The Minister implies that he does not have a clue about what the minimum wage should be, or how wages should be calculated. That task is being delegated to the quango that the Government have established.

The Minister says that he has devoted his political life to campaigning for better wages by Act of Parliament. It is extraordinary that, when he becomes the Minister and can announce such legislation after all these years, he is mute on the fundamental issue of what constitutes an acceptable level of pay. He is happy for a quango to take away from him the privilege of introducing what he believes is an acceptable level of pay: a measure in which he can take pride.

Mr. Bercow

Does my right hon. Friend agree that the absence from the Third Reading debate of the President of the Board of Trade suggests that, far from earning her wage, which is a great deal more than the national minimum wage is likely to be, she is slumbering in her grace and favour apartment?

Mr. Redwood

It is a great pity that the President of Board of Trade has taken no formal part in these proceedings during the night.

Mrs. Roche

The President of the Board of Trade was present during parts of these proceedings. Unlike others, my right hon. Friend believes that those who have done the work in Standing Committee should get the credit for it on the Floor of the House. That is why she is such a good boss to her Ministers.

Mr. Redwood

I presume that the hon. Lady's comment was meant to be a criticism, but it was wide of the mark. I ensured that my hon. Friend the Member for Daventry received full credit. He issued the press release today, and is available to do the media interviews. I have paid tribute to him during the proceedings. I am proud of my hon. Friend's work, and he should get credit in the press for the conduct of the Committee and the debate during this night. The legislation is important, so I asked him whether I could speak to some amendments, and we agreed that we would both contribute to the Third Reading debate.

The absence of the President of the Board of Trade is all the more intriguing because she knew that I was planning to speak. It is a great pity that, once again, she cannot face the music on a measure that she is supposed to believe in. I notice that she causes merriment among Labour Members: they must be embarrassed by her absence. Her fleeting visit at the beginning of the proceedings did not extend to making any comment or to offering any support, as the Hansard record will show.

The quango that the Government are establishing has too much power, and it takes responsibilities away from Ministers. It is a pity that Ministers have refused all opportunities to explain whether they will overrule the quango. We do not know whether the Minister has in his mind a level of pay that would be too low and would lead him to reject the conclusions of the Low Pay Commission. We do not know whether the Chancellor of the Exchequer may veto the level of pay that the Low Pay Commission recommends, perhaps with the Minister's blessing. Unless we know that, it is difficult to judge how much power the Bill will convey to the quango. I fear that it will have too much power. Ministers should have done the honest thing and worked out in their own minds what they believe is an acceptable level of pay. They have a huge civil service staff to help them, and they could have announced the level when they introduced the Bill.

Mr. Ian McCartney

In the past, my hon. Friends have called the right hon. Member for Wokingham (Mr. Redwood) the Vulcan. After his current performance, he can be called Mogadon man. The final minute of the right hon. Gentleman's speech shows why he is so out of touch with British business. The CBI, the Institute of Directors and every other British business organisation support the principle and the concept of the Low Pay Commission, and are working effectively with it. Only the right hon. Gentleman and his colleagues do not recognise that the commission is accepted by both sides of industry as the best way towards the establishment of a national minimum wage.

Mr. Redwood

The Minister said that my remarks just before he intervened showed that I was out of touch. They were that I wanted the Minister to make the decision, and it is interesting that he thinks that that final remark shows that I am out of touch. I would prefer the Minister to make the decision. The minimum wage began as a Labour party measure, and Labour is now trying to use the quango to cloak it with respectability. They are very worried that it will come up with either a figure that is too low, in which case the Minister will be deeply embarrassed, or one that is too high, which will worry the Chancellor because it will destroy jobs.

Business opinion is not as the Minister describes. I have heard many representations from business on the issue, and the CBI has warned that if the minimum wage is set too high, it will lead to a loss of jobs. Companies throughout the country would tell the Minister that if he sets it too high, too far above current remuneration in those companies, jobs will go. I do not know whether the Minister knows the seriousness of the problem in manufacturing. He and his colleagues seem to be doing nothing about the problems that have been created by the Government's independent monetary committee, by their taxation of savings, by their refusal to listen to the arguments against the abolition of PEPs and TESSAs, and against the taxation of pension funds and the £27,000 million tax hit on British business in the Budget. [Interruption.]

Mr. Deputy Speaker (Mr. Michael Lord)

Order. Far too many hon. Gentlemen and hon. Ladies are making sedentary remarks. I ask them to desist.

Mr. Redwood

I am grateful to you for that, Mr. Deputy Speaker.

I realise that we are running out of time. The Government did not allow enough time to debate the Bill, and my hon. Friends are frustrated that they have not been able to explore all the important matters in it in the depth that they warrant, given that it is such a lousy Bill.

The Opposition message is that the Government do not care about manufacturing or about savers. Taxing savers in the current economic situation is extremely dangerous and puts all the pressure on interest rates and sterling, and that undermines jobs and prospects in our manufacturing heartlands. The last thing that manufacturing wants is a load of moral lectures and laws from the Labour party on top of the terrible problems that are being created by high sterling and the Government's interest rate policy.

The Chancellor says that he is pursuing a policy of toughness. The Minister is about to unleash a big pay explosion as a result of the differential awards that will be needed as all the skilled groups try to have the same increase as people at the bottom of the scale. The result will be extremely damaging, and that is the opposite of what manufacturing and business needs. The Minister does not understand business opinion. He is not being open with the House and telling us the level of the minimum wage or who will be affected by the Bill. He has not even told us how wages and remuneration will be calculated for the purposes of the Bill.

The Bill is another death blow to manufacturing and it is bad news for the economy. The Government are throwing away a golden inheritance and they will destroy the job-creating machine that we left them.

7.13 am
Gillian Merron

It is 86 years since a national minimum wage was first brought before the House. The concept has been a long time in Parliament and our debate on Report has also taken a long time. Like many of my hon. Friends, I am happy to sit here for as long as it takes to pass the legislation because it is right for Britain, and that is why the electorate put us in government. The Opposition spoke throughout the early hours of the morning, but we have heard it all before. In the historic Committee on which some of my colleagues and I were privileged to serve, Opposition Members ducked and dived. The undermining of the Bill was dressed up in the form of amendments. We heard all about what we came to term the national minimum gratuities Bill, with Opposition Members believing that tips should be included in a national minimum wage. What on earth were they thinking about?

Mr. Hammond

Will the hon. Lady give way?

Gillian Merron

I believe that the hon. Gentleman has had enough time. I will not give way.

Let us be clear. It is the Opposition who have constantly opposed the national minimum wage. They have not given a direct answer as to whether they would repeal the legislation, but the absence of such an answer gives a clear message. They have been consistent. They are happy with low pay, but we are not.

On behalf of my Labour colleagues, I pay tribute to Ministers, who have shown passion and skill in dealing with the subject. Labour Members have grown accustomed to that and we expect and value that contribution, the like of which the Opposition have no experience of making.

For many years, I have been proud to represent people in the public services, first, in the National Union of Public Employees and, latterly, in Unison: people who cook, clean, care and carry for us, who do the invisible work and who are not regarded highly in our society. We are here today for them.

Mr. Gale

Will the hon. Lady give way?

Gillian Merron

I will not.

Mr. Gale

How much?

Gillian Merron

During the general election, one of my constituents, in deciding how he was going to vote, said to me that the line in the sand for him was decency, that the national minimum wage was all about decency and that that was why he would support Labour.

Mr. Gale

How much?

Gillian Merron

Let us remember that, at this stage in the debate, the constant barracking and constant questioning about how much the rate will be is a complete diversion. We all know that. The Low Pay Commission has been established so that we have a thoughtful, sensible and well-supported rate. We will have its report in a few short weeks and it does Opposition Members no credit that they criticise the action of a cautious and wise Government. Opposition Members seem to prefer rashness and policies that are irrelevant to the reality of the business world and people's working lives. We will not allow that.

Let us remember that this very construction will bring benefits all round. Businesses in my constituency and in the constituencies of hon. Members on both sides of the House welcome the national minimum wage because they know that it will—

Mr. Lansley

On a point of order, Mr. Deputy Speaker. The hon. Member for Lincoln (Gillian Merron) was at pains to refer to the need to declare interests. I wonder if she would care to declare an interest in relation to her entry in the Register of Members' Interests concerning the loan of a car for seven weeks from Unison, which she records as her former employer.

Mr. Deputy Speaker

That is not a matter for the occupant of the Chair. It is for hon. Members to decide what they need to declare.

Gillian Merron

It is no secret that I am very proud to be associated with Unison and its members.

Businesses welcome the national minimum wage because it will cut unfair competition, where a business undercuts the next business. That is why cleaning companies and private contractors will be pleased to have a national minimum wage. Taxpayers pay £100 a year more than they should to compensate for low-paying employers and to cover the cost of in-work benefits. Women, the majority of whom are low paid and work part time, will benefit. This country will benefit because the national minimum wage will give it a competitive edge. We will have a better trained, more stable and more productive work force. That is what we need to be able to compete.

If Opposition Members need any proof that we need a minimum wage and have not been to their jobcentre, they are welcome to come to the jobcentre in my constituency of Lincoln. They will see vacancies for night care assistants, where people are required to have experience and their own transport and to take full responsibility for £2.20 an hour. Tell me that that is acceptable. Perhaps they would like to see the advertisements for security guards, at less than £3 an hour£and they even have to supply their own dogs. Is that acceptable? I think not.

If ever I need convincing, I think back to when I was a local government worker advising on welfare benefits and debt. In one family a low-paid husband and a wife who was at home caring for the children were claiming in-work benefits. They were struggling, as many low-paid families do, with terrible debts, and I was trying to assist them. On the eve of an election—when, I regret, Labour lost—the wife said that she would be celebrating if Labour won because she would then have something to look forward to. When Labour lost, I felt that we had let her down. Today, we have not let her down; we have done something for her and for low-paid people who deserve so much better.

My hon. Friends and I were elected to this House to do the sort of work that we have done today. We came here to ensure that this Bill went through. That is what the people of this country want and we will not be diverted from that. Make no mistake—as the Opposition do—about what the people want. They want the first ever national minimum wage in this country, and it is a Labour Government who will give it to them.

7.21 am
Mr. Chidgey

I do not intend to delay the House for long, as I know that other hon. Members wish to speak.

We have come a long way since Second Reading. Dealing with this Bill has been an exhaustive and, for some of us, an exhausting experience. Throughout our debates, many hon. Members—certainly in my party as well as the Labour party—have shared a common aim: to put an end to cowboy employers undercutting their competitors by paying poverty wages which are then subsidised by social benefits paid for by the taxpayer. That has never been right and it has no place in the modern industrial economy to which we aspire and, indeed which we hope to lead in the coming century.

Ministers know that we have some concerns about certain elements of the Bill. Throughout our debates, we have made it clear that we are concerned about the mechanisms for introducing a single national minimum wage. We are concerned about the variation in the economic impact, the degree of which we do not know, that a single national minimum wage could and would have on different areas of the country.

During what has been a very long night, and I am grateful to the Minister—[Interruption.] It is interesting how hon. Members who have come into the Chamber only at this late stage in our proceedings should be so confident that they appreciate the finer points of the debates that have gone before.

Mr. Bercow

Will the hon. Gentleman give way?

Mr. Chidgey

I think not; we have had enough.

We have come some way during the night and I am grateful to the Minister for confirming that the issues on which I have pressed him on a number of occasions will be dealt with by the Low Pay Commission and will feature in its report. That report will precede the secondary legislation which, we are told, will set out the detailed proposals for a national minimum wage. We will grasp the opportunity to scrutinise those details.

We have come a long way in teasing out, in Committee, some of the less clear aspects of the Bill. It has been improved through an all-party contribution on new clause 1, relating to volunteers, for which we should all take credit.

The Bill will provide protection for the most abused sector of the working population—home workers. I am pleased that the Minister shares the concerns that I drew to his attention earlier about the exploitation of that particularly vulnerable employment sector.

Although we have reservations about the general application of a single national minimum wage, we shall not oppose the Bill's passage.

7.24 am
Mr. Pond

I am sad that I did not get a straight answer to my intervention in the speech of the right hon. Member for Wokingham (Mr. Redwood) about whether the Conservative party would plan, after all our debates, to repeal the National Minimum Wage Bill. I am even sadder that the right hon. Gentleman is no longer in the Chamber. However, the Leader of the Opposition is in the Chamber, and I should be happy to give way to him at any point in my speech if he would like to tell me whether the Conservatives plan to repeal the national minimum wage that we are introducing today.

Mr. Boswell

Will the hon. Gentleman give way?

Mr. Pond

No, I shall make a little progress—unless the hon. Gentleman will tell me whether the Conservatives would repeal the legislation, in which case I should be very happy to give way.

Mr. Boswell

Has it occurred to the hon. Gentleman that it will be reasonable to ask us whether we will repeal the Bill once the Government tell us what it is that we might or might not be invited to repeal? We do not know.

Mr. Pond

It was against my better judgment to give way.

In Committee, there was some confusion about whether Conservative Members had a hidden agenda in dealing with the Bill. The hon. Member for Daventry (Mr. Boswell) told us that there was no hidden agenda, but the hon. Member for Solihull (Mr. Taylor) told us that there was one—although he was not quite sure whose agenda it was. During the Committee stage, another hon. Member told us, very honestly, that the purpose of the Opposition's amendments to the Bill was to restrict the national minimum wage "as far as possible".

Conservative Members want to ensure—as their behaviour in the past few hours has been intended to ensure—that we do not have a national minimum wage in the United Kingdom. They still do not get it. do they? They do not understand that four out of five people in the United Kingdom are in favour of the national minimum wage, or that two out of three of those who still admit to being Conservative supporters—admittedly, numerically, there are not many of them—say that they favour a national minimum wage. Conservative Members continue to oppose the legislation. They do not understand that it is not only a matter of basic social justice but makes good business sense.

Opposition Members have told us in today's and yesterday's debates and in Committee that they are not in favour of sweated labour. In Committee, the hon. Member for Daventry told us that he had seen a sweatshop only in Romania. That might present a little challenge for his local press in Daventry—perhaps to discover whether they can uncover something that might look like a sweatshop. Every hon. Member will have to admit that, in the absence of a national minimum wage, we all have among our constituents people who are earning pitifully low pay.

While working at the Low Pay Unit, I saw at first hand, during 18 years of Conservative government, the effects of low pay. Although Conservative Members now tell us that they are not in favour of sweatshop economics, I saw at the sharp end the impact of their policies: abolition of wages councils; and sweatshop economics which led us to a situation in which—as the Minister told us earlier in the debate; I, too, commend Ministers for their work on this Bill—pay inequalities in the United Kingdom are now wider than they were in 1886, when figures were first collected, and have increased faster than in any other industrialised country. That is part of the reason why, shamefully, the numbers of those in poverty in the United Kingdom trebled under the previous Administration.

Despite the enormous economic and social costs of the previous Government's policies, those policies have had no benefit. One might have thought, listening to the right hon. Member for Wokingham, that the sweatshop economics that the previous Government pursued have provided a nirvana of job creation and competitiveness. In fact, those policies created far fewer jobs for the nation than were created for countries that provided a decent level of pay and a minimum wage. We slipped down the competitiveness league, and eventually, in terms of national income per head, we were 1 1 th out of 15 member states of the European Union. If that is economic success, I would hate to see economic failure. We must take Opposition Members' arguments with a pinch of salt—or more appropriately, perhaps, with a salt mine. Their aim is to continue the discredited policies that we saw when they were in government.

Let me remind the House why we have sat here throughout the night to make sure that there is a national minimum wage. Let me give some examples that have recently been encountered by the Low Pay Unit, the organisation for which I used to work. An economics graduate is working for a firm of London solicitors for £1.75 an hour. An 18-year-old with NVQ 2, working in a private nursing home for adults with special needs in Yorkshire, earns f1.50 an hour. A 20-year-old employed as a stablehand in the east midlands earns 66p an hour.

We have sat here throughout the night, and we sat through two Committee sittings for more than 20 hours, to ensure that those people receive the decent minimum wage that they deserve. Let me remind the House why Opposition Members have sat here throughout the night. They have gone through the theatre—the fiasco—of pretending to scrutinise legislation, while going round and round, intervening on each other, to make sure that those people do not have the national minimum wage to which they are entitled. Labour Members will not let it happen.

7.31 am
Mr. Gale

I will be brief, because the hour is late. [HON. MEMBERS: "Early!"] It is late in the evening.

What we heard from the Minister was an unreconstructed rant from the 1970s. It was a time warp, returning us to the Trades Union Congress that we all used to know and loathe. The Labour party has clearly learnt nothing from those days. It has not learnt that, if people are to be paid more money, that money must be earned by the company concerned before it can be paid.

The Minister for Small Firms, Trade and Industry said in a disparaging speech that it did not matter, but of course it matters how much the figure is. We have sat here all night asking over and over again what that figure will be, but not one clone—not one radio pager—is prepared to tell Labour Members what to say.

The hon. Member for Gravesham (Mr. Pond) is not prepared to tell us how many Kentish jobs the Bill will cost, although he has been working on it for years in the Low Pay Unit. We are told that we have been looking forward to this for 70 or 80 years, but no one is prepared to put a figure on it, and that is what matters.

I will vote against the Bill, because it will cost my constituents jobs. I came here to represent my constituents' interests, and I do not believe that it is in their interests to be put out of work by any meaningful figure. If the Minister tells us that it will not be a meaningful figure, I will say that we have wasted the entire night, and that some of my colleagues have wasted a great deal of time on the Bill. If it is to be a figure of the kind that has been bandied about in private on the Opposition Benches, industries and businesses in my constituency are very concerned indeed. As my right hon. Friend the Member for Wokingham (Mr. Redwood) said, there will be a ratchet effect. Wage costs will go up and up and up.

I represent a part of the south-east that has historically had high unemployment. I want my constituents to earn more: I want to see more money in their pockets, so that they can put more money into retail industries in my constituency. However, that money must be earned. I do not want an unrealistic wage, at whatever level, to be imposed on the seaside industries that I represent, on the agricultural workers and casual workers whom I represent or on those working in the toy industry7—a highly competitive industry, which is seeking to deal with overseas competition and costs that companies are already finding it very difficult to meet. If those people are to be put out of work by the Bill—as I believe they will—I would be doing them no favours by voting for it. If Labour Members are prepared to name a figure now, we shall know where we stand. If they are not, I fail to see how they can go into the Lobby in support of this nonsense.

Mr. Tam Dalyell (Linlithgow)

While the hon. Gentleman is on the question of naming, can he name the toy firms in his constituency?

Mr. Gale

I can and I am proud to do so. Hornby Hobbies is one of the most respected toy companies in the country. The managing director wishes to raise the wages of his employees. He is a new managing director who has turned the company round. It went into liquidation, it was bought out of liquidation and it recovered. It is a proud international name, but it is competing with assembly workers around the world. Good, part-time jobs employing my constituents are being sent overseas because British companies cannot compete with the wage costs.

If my constituents working for that firm will be placed out of work by the legislation, the Government and the legislation will be doing them no favours whatever. They, and Labour Members' constituents, will find that their jobs have gone and the small husband-and-wife businesses that were considering taking on a young person will work longer hours because they cannot afford to take on another employee. That is not creating work; it is destroying jobs and that is what the legislation and the Government will do.

7.36 am
Mr. Jim Murphy

It is good that the right hon. Member for Wokingham (Mr. Redwood) joined us this evening. It was good of him to set his alarm and wake from his slumber. It was good of him to slip his suit over his pyjamas, but it was very bad manners for him to nod off in the middle of his own speech. He has since sleep-walked back to his office, no doubt to prepare for the rest of his busy day. It is a shame that he is not in his place, but perhaps the hon. Member for Daventry (Mr. Boswell) will comment on what I have to say.

My hon. Friend the Member for Gravesham (Mr. Pond) asked the right hon. Member for Wokingham whether he would repeal the legislation, but the Opposition would not make a commitment three years in advance. I wonder whether that could be reconciled with other comments by the right hon. Member for Wokingham, who seemed perfectly eager and determined to comment in principle on opposing and repealing other legislation for a decade and beyond. I refer in particular to the European currency.

The Opposition lectured us on the impact on young people of a national minimum wage. That rhetoric does not fit well with an Opposition who objected to the single greatest job creation and opportunity enhancement project this century, in the shape of the new deal. We accept no lectures from them on opportunities for young people.

I have sat here throughout the debate this evening, and watched the Opposition pass the baton of filibustering from Back Bench to Front Bench and back again. It is now twenty minutes to 8 in the morning. It says something strange about the Chamber that this is the largest number of hon. Members that I have ever addressed, and that we are all gathered here at twenty minutes to 8 in the morning.

Although I feel a little jaded after listening to Opposition speeches throughout the night, I feel most sorry for my hon. Friend the Member for Eltham (Mr. Efford), who has been sitting here all evening waiting for the Adjournment debate on his local fire service. I feel equally sorry for the Minister who is waiting to reply to that debate. I wish my hon. Friend every success with his Adjournment debate.

I have a couple of quick comments, because I know that time is not an ally this morning. The hon. Member for Aldershot (Mr. Howarth) said that his town was the home of the armed forces, and that the Bill would bode ill for the people of Aldershot. Every constituency is the home of the armed forces, because we all have constituents in the forces. They will all be affected by the findings of the pay review body.

Like many hon. Members, I would have been affected by a national minimum wage in the past 18 years. I was affected by the Conservatives' repeal of the wages councils in 1993. Since then, I have worked night shifts, I have worked in shops and I have worked for very low wages. I bore the brunt of the previous Government's policies.

I do not accept the claim of Conservative Members that a minimum wage will lead to a reduction in the number of jobs, and will create unemployment. Again, I cite the Conservatives' record in government. In 1993, they abolished the wages councils, claiming that that would create jobs. The facts do not bear that out. Of course various economic circumstances have an impact on jobs, but let us examine one important fact: in the year before the abolition of the wages councils, nearly 18,000 new jobs were created in this country; in the year after the abolition, that number went down to 5,000. The abolition of the wages councils did not have a positive impact on the level of unemployment.

Mr. Lansley

Does the hon. Gentleman accept that unemployment has gone down every month since 1993? Does he not attribute that to the economic policies of the previous Government, including labour market flexibility?

Mr. Murphy

No, I do not agree with the hon. Gentleman. There was a sharp reduction in job creation after the abolition of the wages councils. The Conservatives doubled the number of unemployed when they were in government. We shall not accept any lessons from the Conservatives on unemployment, because they failed to implement any programmes for change for the young unemployed, and failed to bring in a minimum wage—indeed, they did the opposite.

I welcome the comments of my hon. Friend the Minister earlier this morning, or late yesterday evening, on unfair dismissal. It is crucial that no one should be sacked or victimised for exercising their legal right to demand the national minimum wage. That right must be protected in law.

Much was said in Committee about benefits. One of the main reasons why I support the Bill is that we shall no longer have to subsidise low pay. Crucially, no longer will taxpayers have to subsidise employers who pay poverty wages to people who work long hours. No longer will we have to subsidise families who have the dignity of going to work, but then have to suffer the indignity of signing on to make up for their poverty wages.

Many of us sat up all evening listening to the debate, some of us participating in it. Many of the lowest-paid workers throughout the country work night shifts. One night shift in the House is an evening and morning well spent if, at the end, the scourge of poverty pay is ended for hundreds of thousands of people in every town and city throughout the country.

7.44 am
Mr. Hammond

One issue with which Ministers would have no difficulty in agreeing is that we have had an extensive debate on the Bill over the past few weeks. My right hon. Friend the Member for Wokingham (Mr. Redwood) summed up very eloquently the concerns we still have at the end of that debate.

The Government will, of course, get their Bill through; there has never been any doubt about that. That ought to be the end of story, but, because of the unusual structure of the Bill, there will be yet another chapter in the saga when the Low Pay Commission reports and Ministers come back to the House with the regulations, which, for the first time, will allow us to understand what the Bill means in substance. Those regulations will put flesh on the skeleton that is all we have before us at the moment.

The debate has been quite extraordinary. Although it has been extensive, the key piece of information has been missing—the piece that we all need to make any sense of the Bill. It is only when we obtain that vital piece of information—what the rate is to be—that we will be able to understand at last what the national minimum wage legislation really means.

Despite the Minister's uncharacteristically churlish opening remarks, the debate in Committee and on Report has, to a large extent, been good natured. Often, it has been constructive, and there has been a good deal of consensus across the Committee and the Floor of the House. Given that we stated on Second Reading our principled objection to the legislation, our objective in Committee was to try to improve the Bill. I hope that the Minister will accept that, if we have not always agreed, we have at least attempted to be constructive, and to suggest areas of concern as we have seen them in the practical operation of Bill.

The issues of principled objection remain, as well as many practical concerns about the detailed operation of the Act. We are convinced that the Bill will cost jobs, fuel inflation and damage public services. The degree of damage can be assessed and debated only when we have the vital missing pieces of information. Assuming that the Secretary of State accepts the Low Pay Commission's recommendations and puts them before the House in the form of regulations, we will finally have a chance to debate the issue on a fully informed basis. That debate may be more substantive than the debate that we have had over the past 100 or so hours, including proceedings in Committee and on Report.

I have been very brief, as is my wont. If I may, I would like to steal one of the Minister's favourite expressions. I do not feel that I am about to be parted from the National Minimum Wage Bill. It is more a case of au revoir, because I am sure that we will be visiting it again when the regulations come before us.

7.47 am
Mr. Healey

This Bill was badly needed, and is long overdue. It brings Britain into line—finally—with other modern economies, and gives us for the first time a national minimum wage. To borrow a well-worn phrase, the Bill is tough on low pay, and tough on the causes of low pay. The Bill will stop cowboy companies driving down wages and driving down standards in other workplaces. There is a strong correlation between low pay and low staff morale and motivation. There is a strong correlation between low pay and high rates of staff turnover. There is a strong correlation between low pay and low levels of training. Moreover, there is no future for this country in competing with the world's worst economies, when we must compete with the best.

For my constituents, the Bill may well be the most important piece of legislation we pass this Parliament. In Rotherham, between 1981 and 1991, we lost 12,000 coal and steel jobs, and gained 9,000 service sector jobs. Our employment structure and pay structure changed. Our economy is increasingly characterised by low-paid, part-time and temporary work.

Last year's jobcentre survey showed that half of all full-time vacancies paid less than £4 an hour, and that one in 10 paid less than £3 an hour. One man was so incensed by what he saw at the jobcentre that he ripped away one of the jobcentre cards and brought it to my surgery. It gave details of a £1.85-an-hour, six-day-week job for a security guard. [HON. MEMBERS: "Shame."] Those trends are mirrored throughout the country and the economy.

The aim of the Bill is simple: to achieve a universal national minimum wage. That principle was reiterated throughout the time in Committee, in the face of a stream of amendments tabled by Conservative and Liberal Democrat Members, seeking to punch holes in that principle. They wanted variations by region, by sector and by occupation. They wanted variations by size of firm. The principle of a universal national minimum wage was reinforced tonight on Report, not least by the amendments we passed to prevent employers from penalising or dismissing employees as they move toward eligibility for minimum wage protection.

Many of my hon. Friends have worked in the employment field. We are familiar with those hire-and-fire employers who have been given freer and freer rein throughout the 1980s and early 1990s. We are familiar with their practice of firing people, days or weeks before they complete two years of employment and become entitled to protection from unfair dismissal. That is why the amendments on which we voted tonight were so important: they reinforced the basic principle of the Bill.

I look forward to the publication of the Low Pay Commission report in May. I am disappointed by the grudging recognition that Conservative Members have given to the work of the commission, which has done a thorough job, and will produce an authoritative set of recommendations. Conservative Members miss the point: the Low Pay Commission is part of an important policy and political process, which they fail to understand.

The Bill is a tribute to the Minister—and his work in opposition and in government—because he, and the Government, have moved employers to accept the principle of the national minimum wage, and then to become involved in helping to prepare plans to implement it, preparing the consensus on which the Bill and legislation relating to it must be based. That is why, in Committee, Conservative Members were bereft of the critical briefings and draft amendments that they might have expected, especially from employers' organisations.

Unions, too, have moved. They have moved to accept that a fixed formula is not the way ahead. They have moved to accept that they also must become involved in helping to prepare plans and achieve a consensus for the Bill's implementation. [Interruption.]

Mr. Deputy Speaker (Sir Alan Haselhurst)

Order.

Mr. Healey

Those Conservative Members are the last of Britain's pressure groups that are unable to come to terms with the principle of the national minimum wage. They cannot come to terms with the fact that public opinion has left them behind. After 86 hours—

Mrs. Laing

rose—

Mr. Healey

After 86 hours in Committee and 15 hours on Report, I want to see the end of the national minimum wage being kicked around as a political football. I want to see the beginning of the national minimum wage as a permanent feature of the British economy as we move into the next millennium.

7.54 am
Mr. Lansley

After participating in the lengthy Standing Committee and the Report stage, I am grateful for the opportunity to say a few words on Third Reading.

I am glad that the Minister of State is here, because I suspect that he is a little like Queen Mary Tudor: that, when he departs—I pray many years hence—and they open him up, instead of "Calais", they will find "national minimum wage" written on his heart, so profound has been his commitment to it. I fear that, in the long run, like Queen Mary Tudor, he is committed to a lost cause. He may fight over it for generations, but in the long run he will lose it.

I did not get a chance to speak on Second Reading. Way back then, I thought that I would put my points in the debate, but would be willing to listen. The points that I intended to make were, first, that the academic evidence suggests that the minimum wage costs jobs, and, secondly, that it hits the unskilled and those without training and skills the hardest. The minimum wage does not merely set a floor—it is a floor with edges, and people fall off it. Some people are lifted up by it, but others fall off.

All those arguments came up in Committee, but time and again, rather than an attempt to respond with evidence and argument, all we had from Labour Members were assertions and bluster. They voted for the minimum wage, and they must have it. The terracotta army has been given its orders. It will march in the direction of the national minimum wage and do what it has to by the mandate presented to it, but not on the basis of evidence.

What deeply depressed me was that, from the point of view of the Government, the heart of the matter was that they wanted to lift people out of poverty by introducing the national minimum wage, yet the evidence from the Institute for Fiscal Studies and others was clear—that the minimum wage is a bad device to alleviate poverty. Often, it is directed not towards those in the lowest income groups, but towards the thousands of working partners, who are in households that are not particularly poor. The benefit of the minimum wage is greatest for the middle deciles by income, not the lowest. The beneficial effects that Ministers have suggested the national minimum wage would have on poverty simply are not there.

Ministers could have accepted that in Committee, and said that they wanted to make the minimum wage work better. They could have seriously debated the rate and, for example, home and agency workers, where there are abuses. Conservative Members recognise that abuses are committed by certain employers which have to be dealt with, and we engaged in that debate. However, Ministers would not provide information on which a serious debate could take place. Throughout, it was suggested that the minimum wage could be set at £3.50, £4 or £4.50. Who was to know where it was to be set? We introduced amendments designed to set a ceiling on the level, but the Government would not accept them.

Now the Government argue that business organisations accept the national minimum wage. I have represented business organisations, and I can tell the House that they accept that the Government are going to have their Bill—just as Conservative Members know they will. At the risk of repeating myself from another debate—it applies here just the same—

Mr. Jim Fitzpatrick (Poplar and Canning Town)

Will the hon. Gentleman give way?

Mr. Lansley

No, because time is short—[Laughter.] As the hon. Gentleman knows, in 100 hours I gave way every time anyone asked me. In Committee, his colleagues were told never to give way. I remember the number of times that I stood up and had to sit down again because they would not give way.

I must tell the Minister that, just because Labour Members kow-tow to the emperor, that does not mean that he is wearing any clothes. When the time comes, he will see. It will not be a pretty sight—we will find that the Minister wears no clothes.

7.59 am
Mr. Boswell

I may have spent 100 hours in Committee and on Report closely associated with the Minister, but he leads me irresistibly to think of Lenin, who asked the essential question, "Who, whom?" Even given the time that we have spent in our deliberations, some very important questions have not been answered—Ministers have fallen over backwards to avoid answering them. We have been told no national minimum wage rate, no details of the coverage of remuneration, no specification of pay reference periods and no details of the mechanism of uprating. At the end of 100 hours, we simply do not know the answers.

Every time that there has been a difficulty—for example, as recently as the one in the debate on honoraria—the matter is referred magically to the Low Pay Commission. The Government have been a blend of Lenin and the fairy godmother.

Mr. Fitzpatrick

Will the hon. Gentleman give way?

Mr. Boswell

No, I shall not give way, as I have a number of points to make and I have been giving way for 100 hours.

The Government have not been able to run away from the overall economic difficulties that will arise because of the Bill. The Confederation of British Industry has continued to point out that, even if the rate was set as low as —3 an hour, there would be problems if differentials were not compressed. It is also concerned about record keeping and the reversal of the burden of proof.

Such concerns are echoed especially in the more vulnerable parts of the private sector—hospitalities, charities, horticulture and remote businesses and industries. Less explicitly, concerns have also been expressed about the impact on the public sector, particularly caring.

At the end of this amazing process we are left, as others have said, with Hamlet without the prince—we still have not elicited that elusive rate. We have at least secured the publication of the Government's advice to the Low Pay Commission, although not until 600 other bodies and individuals had given it evidence. We do not have Hamlet, but we do have the first grave-digger.

It would have been much better if the Low Pay Commission—given that the Government were going to create it anyway—had been invited to take evidence, deliberate and report. Ministers could have decided at what rate they wanted the minimum wage to be set and the other details—which will eventually have to be put into regulations—and then brought them to the House as the full monty, for a proper set of debates.

Instead, the Bill has been conducted most extraordinarily. In Committee, we debated the sittings motion on the first day, but we did not sit on the following Thursday afternoon. The week after that, one debate was curtailed when Labour Members moved the closure, which the Opposition voted against, as we wanted to debate the Bill. Then the Afrika Korps rolled into town and tried to steamroll the Bill overnight. Labour Members should have known that my hon. Friends were made of sterner stuff. They had many points of substance to raise and, my goodness, they raised them.

Given that the Bill seemed only to be an enabling Bill, it is amazing that it has had to be so heavily amended—by both the Opposition and the Government. It would have been much wiser to have allowed more time for the remaining stages.

I have learnt in Committee and on Report that, in addition to the general economic case against the Bill, which has been so well deployed by my right hon. Friend the Member for Wokingham (Mr. Redwood), we have been left with enhanced worries about the way in which the Bill will operate in practice. My hon. Friends and I are still extremely unhappy about how it will affect charities, although the provisions are now considerably better than those that were first proposed. We are deeply disappointed about therapeutic earnings. We remain concerned about record keeping, enforcement and penalties. The Agricultural Wages Board is left with a gross untidiness, and there is real anxiety about double employments, well exemplified by Mr. McSporran of Gigha, who had 14 jobs at once.

There is real concern about spouse employments. Governments are ill advised to start regulating the economic or any other relations between spouses. There is uncertainty about the commission. Above all, there is uncertainty about whether the under-26s will have a lower rate or a training rate and whether others will join them.

All that uncertainty arises because of the complexity of a modern economy, to which the Government have not alerted themselves. There are more things in heaven and earth than are dreamt of in their philosophy. The Government have tried to fit a modern economy into a narrow and constricting mould.

Of course there is a political attraction for Ministers in choosing one rate. If only the real world were so simple. The Government are learning. First, they had to exempt the armed forces. There has been no explicit information, but it is clear that they have completely filleted the Bill. By destroying its universality, they have destroyed its integrity.

The essential moral equivocation of the Bill, which we pointed out in the very first Committee sitting, remains and will remain at least until the rate is stated and any exemptions or lower rates for the under-26s are revealed.

The choice is simple. If the national minimum wage is set at a safe rate dictated by the Chancellor of the Exchequer, it will not make much difference. The result will be political disillusionment among Labour Members. It would have been far better to adopt the Opposition's approach of a minimum income.

If, alternatively, the minimum wage is set at a high rate—say £4 an hour or more, which would still be well below the £4.60 that would be consistent with Labour's previous election pledge—it will damage significant sectors of the economy, including, for example, the care sector and tourism, which are great generators of jobs. Through the effect on differentials, it will run the risk of cranking up wage-cost inflation. The evidence from Incomes Data Services only this week is that it is already doing so. All that is the natural result of a Government whose policies are driven by soundbites: the louder they sound, the more their policies turn out to bite. Ministers have, throughout this extraordinary consideration of the Bill, been strong on rhetoric and weak on answers. The damage to jobs comes later.

We have been implacably opposed to the Bill all along. We sought, and modestly achieved, certain improvements in Committee, but we remain implacably opposed to the Bill and will shortly have the pleasure of voting to decline it a Third Reading. There it is.

8.7 am

Mrs. Roche

As I said consistently in Committee and throughout this evening, we have had a full and interesting debate. It is good that we can do so. 1 must, however, say to the hon. Member for Daventry (Mr. Boswell), for whom I have some regard, that his last gesture, in throwing down a copy of the Bill, was petulant.

The Conservative party has learnt nothing and forgotten nothing. It has not learnt the lessons of 1 May. It has not learnt that the policy of a national minimum wage is deeply popular. The Conservatives say that they want no minimum wage—yet. They say that they want a high-wage economy—but not yet. They say that they want economic efficiency and partnership—but not yet.

I am extremely and eternally grateful to the team who have worked with us in Committee to bring about the national minimum wage. I know that my hon. Friend the Minister of State will agree that it has been one of the great experiences of our parliamentary lives to work with such a wonderful and dedicated team and to have the support of our right hon. and hon. Friends this evening.

Conservative Members may sneer but, for all Labour Members, this Bill is why we came into politics, why we joined the Labour party and why we are proud to be part of this Government.

Mr. John Home Robertson (East Lothian)

I join other hon. Members in congratulating my hon. Friend and her team on the work they have done on this important Bill. She mentioned teamwork, but has she received any information about the attitude of the Scottish and Welsh nationalists to the Bill? I have not seen them tonight. Do they support the Bill?

Mrs. Roche

I am deeply disappointed that the Scottish and Welsh nationalists are not here, because the Bill will introduce a national minimum wage that will bring great benefits throughout the United Kingdom.

I wish to emphasise the intention behind the Bill, in case anybody is still mystified. The Bill is part of the Government's overall employment relations strategy, which aims to encourage greater adaptability at work, a greater sense of partnership in the workplace and decent minimum standards of fairness at work for all, enforceable in law. In our Third Reading debate this evening, we have heard passionate contributions—I make no apology for describing them as passionate—from my hon. Friends the Members for Lincoln (Gillian Merron), for Gravesham (Mr. Pond), for Eastwood (Mr. Murphy) and for Wentworth (Mr. Healey), who all talked from their experience about what poverty wages mean to the men and women whom they represent.

What have we heard from the Conservatives? We have heard the same old stories. They made the same arguments that they made when equal pay for women was debated. They claimed that equal pay legislation would mean a reduction in jobs for women. In reality, women's employment increased overall. The Conservative party has learnt nothing and forgotten nothing, and that is typical.

The Conservatives have told us that small firms will suffer. They are so unambitious for the small firms in our country which do so much work for our economic wealth. The Conservatives deem small firms second class, but the small firms will not forget what they have done. The Conservatives were rejected by the small firms. Indeed, the hon. Member for Chesham and Amersham (Mrs. Gillan), who speaks on small firms for the Opposition, has said that her party had failed to make the arguments. She also said, with admirable honesty, that the Conservatives would produce no policy on small firms in the future because they had got it so wrong in the run-up to the election. Why should we listen to them?

The minimum wage has both a business and a social justification. If I may borrow a phrase from my hon. Friend the Minister of State, it is an idea whose time has come. The Bill has the simple aim of providing a wage floor, set by the Government, below which workers cannot be paid. That is a simple idea, but it has thrown up a vast number of issues—as the length of our debates bears witness.

Mr. Fitzpatrick

I am grateful to my hon. Friend for giving way, especially as two Conservative Members had opportunities to give way but declined them. I can only imagine that that is a measure of their last-ditch efforts to defend the previous Administration's policy of creating a low-skill, low-wage economy in this country. Does my hon. Friend agree that this policy is central to our new Government's social exclusion policy which will treat British workers with dignity? The creation of a national minimum wage is long overdue. It is testimony to the difference between Conservative Members, who treated the British people with contempt—

Mr. Deputy Speaker

Order. The hon. Gentleman must not attempt to make a speech on an intervention.

Mrs. Roche

I understand well the points that my hon. Friend made. What Aunt Sallies the Conservative party has put up. The hon. Member for Daventry—this was not worthy of him—was worried that there were terrible enforcement measures. Where did they come from? They are, of course, based on previous enforcement provisions enacted by the Government in which he served as a Minister, as did the right hon. Member for Wokingham (Mr. Redwood). They said nothing about draconian enforcement then. The Conservative party has learnt nothing and forgotten nothing.

I look forward to the progress of the Bill in another place. We will watch its deliberations. I remain confident that there will be a good debate there, despite the confusion and complications spread by the Opposition. The minimum wage is above all a practical measure designed to deliver to the people we represent. It is about people who are held down and treated unfairly. It is about company managers who need, and wish, to be free from the fear that a competitor will undercut them by recruiting a desperate labour force. The Conservative party's opposition to the Bill shows how out of touch it is with business. The Bill is a practical, hard-headed business measure, but it is practicality and hard-headedness with justice and fairness thrown in.

When the Bill becomes an Act, as it surely will, it will take its proper place alongside the other landmark legislation introduced by previous Labour Administrations. When my political life and awareness began, I looked at those past Labour Administrations with great admiration. They influenced my young life. This will take second place only to the setting up by a Labour Government of the national health service, whose anniversary we will celebrate this year. What more fitting tribute than to wish the Bill's passage well. I commend it to the House.

Question put, That the Bill be now read the Third time:—

The House divided: Ayes 214, Noes 124.

Division No. 194] [8.16 am
AYES
Ainger, Nick Davies, Rt Hon Ron (Caerphilly)
Ainsworth, Robert (Cov'try NE) Davis, Terry (B'ham Hodge H)
Allen, Graham Dawson, Hilton
Ashdown, Rt Hon Paddy Dismore, Andrew
Atkins, Charlotte Dobbin, Jim
Austin, John Donohoe, Brian H
Barnes, Harry Doran, Frank
Beard, Nigel Drew, David
Benn, Rt Hon Tony Eagle, Angela (Wallasey)
Benton, Joe Eagle, Maria (L'pool Garston)
Berry, Roger Efford, Clive
Best, Harold Ennis, Jeff
Blears, Ms Hazel Etherington, Bill
Bradshaw, Ben Field, Rt Hon Frank
Brown, Rt Hon Nick (Newcastle E) Fitzpatrick, Jim
Browne, Desmond Fitzsimons, Lorna
Burden, Richard Flynn, Paul
Burgon, Colin Follett, Barbara
Campbell, Ronnie (Blyth V) Foster, Michael Jabez (Hastings)
Canavan, Dennis Foster, Michael J (Worcester)
Casale, Roger Foulkes, George
Caton, Martin Gardiner, Barry
Cawsey, Ian Gerrard, Neil
Chapman, Ben (Wirral S) Gilroy, Mrs Linda
Chaytor, David Godsiff, Roger
Chidgey, David Goggins, Paul
Clapham, Michael Gordon, Mrs Eileen
Clark, Paul (Gillingham) Griffiths, Jane (Reading E)
Clarke, Eric (Midlothian) Grocott, Bruce
Clelland, David Hain, Peter
Coaker, Vernon Hall, Mike (Weaver Vale)
Coffey, Ms Ann Hamilton, Fabian (Leeds NE)
Coleman, Iain Hancock, Mike
Colman, Tony Hanson, David
Corbett, Robin Healey, John
Corbyn, Jeremy Hepburn, Stephen
Cox, Tom Heppell, John
Crausby, David Hesford, Stephen
Cryer, John (Hornchurch) Hill, Keith
Cunningham, Jim (Cov'try S) Hinchliffe, David
Dalyell, Tam Hoey, Kate
Davey, Valerie (Bristol W) Home Robertson, John
Davidson, Ian Hoon, Geoffrey
Davies, Rt Hon Denzil (Llanelli) Hope, Phil
Davies, Geraint (Croydon C) Hopkins, Kelvin
Howarth, George (Knowsley N) Pickthall, Colin
Hoyle, Lindsay Pike, Peter L
Hughes, Ms Beverley (Stretford) Plaskitt, James
Humble, Mrs Joan Pollard, Kerry
Hutton, John Pond, Chris
Iddon, Dr Brian Prentice, Gordon (Pendle)
Jackson, Ms Glenda (Hampstead) Primarolo, Dawn
Jamieson, David Prosser, Gwyn
Jenkins, Brian Purchase, Ken
Jones, Helen (Warrington N) Quinn, Lawrie
Jones, Jon Owen (Cardiff C) Rammell, Bill
Kennedy, Jane (Wavertree) Rapson, Syd
Khabra, Piara S Reed, Andrew (Loughborough)
King, Andy (Rugby & Kenilworth) Reid, Dr John (Hamilton N)
King, Ms Oona (Bethnal Green) Roche, Mrs Barbara
Lawrence, Ms Jackie Rooney, Terry
Laxton, Bob Rowlands, Ted
Leslie, Christopher Ruane, Chris
Levitt, Tom Russell, Ms Christine (Chester)
Lewis, Ivan (Bury S) Savidge, Malcolm
Liddell, Mrs Helen Sawford, Phil
Linton, Martin Sedgemore, Brian
Livingstone, Ken Sheerman, Barry
Livsey, Richard Singh, Marsha
Lock, David Skinner, Dennis
Love, Andrew Smith, Angela (Basildon)
McAllion, John Smith, Miss Geraldine (Morecambe & Lunesdale)
McAvoy, Thomas Smith, John (Glamorgan)
McCabe, Steve Soley, Clive
McCafferty, Ms Chris Southworth, Ms Helen
McCartney, Ian (Makerfield) Spellar, John
McDonnell, John Squire, Ms Rachel
McFall, John Steinberg, Gerry
McNulty, Tony Stewart, David (Inverness E)
McWalter, Tony Stewart, Ian (Eccles)
Mallaber, Judy Stoate, Dr Howard
Mandelson, Peter Stringer, Graham
Marek, Dr John Stuart, Ms Gisela
Marsden, Paul (Shrewsbury) Sutcliffe, Gerry
Marshall, David (Shettleston) Taylor, Rt Hon Mrs Ann (Dewsbury)
Marshall—Andrews, Robert Thomas, Gareth (Clwyd W)
Merron, Gillian Todd, Mark
Michael, Alun Touhig, Don
Michie, Bill (Shef'ld Heeley) Truswell, Paul
Milburn, Alan Turner, Dennis (Wolverh'ton SE)
Miller, Andrew Turner, Dr Desmond (Kemptown)
Mitchell, Austin Tyler, Paul
Moran, Ms Margaret Vis, Dr Rudi
Morgan, Rhodri (Cardiff W) Walley, Ms Joan
Morris, Ms Estelle (B'ham Yardley) Wareing, Robert N
Mountford, Kali White, Brian
Mudie, George Wicks, Malcolm
Mullin, Chris Williams, Alan W (E Carmarthen)
Murphy, Denis (Wansbeck) Williams, Mrs Betty (Conwy)
Murphy, Jim (Eastwood) Winnick, David
Naysmith, Dr Doug Wise, Audrey
Norris, Dan Wood, Mike
O'Brien, Bill (Normanton) Woolas, Phil
O'Hara, Eddie Wright, Anthony D (Gt Yarmouth)
O'Neill, Martin
Organ, Mrs Diana Tellers for the Ayes:
Osborne, Ms Sandra Mr. Clive Betts and
Pearson, Ian Mr. Kevin Hughes.
Pendry, Tom
Perham, Ms Linda
NOES
Ainsworth, Peter (E Surrey) Bottomley, Peter (Worthing W)
Amess, David Brady, Graham
Ancram, Rt Hon Michael Brazier, Julian
Arbuthnot, James Brooke, Rt Hon Peter
Atkinson, David (Bour'mth E) Bruce, Ian (S Dorset)
Baldry, Tony Burns, Simon
Bercow, John Cash, William
Beresford, Sir Paul Chapman, Sir Sydney (Chipping Barnet)
Boswell, Tim
Chope, Christopher Maples, John
Clappison, James Maude, Rt Hon Francis
Clark, Rt Hon Alan (Kensington) Mawhinney, Rt Hon Sir Brian
Clark, Dr Michael (Rayleigh) May, Mrs Theresa
Clarke, Rt Hon Kenneth (Rushcliffe) Moss, Malcolm
Clifton—Brown, Geoffrey Nicholls, Patrick
Collins, Tim Norman, Archie
Cormack, Sir Patrick Ottaway, Richard
Cran, James Page, Richard
Curry, Rt Hon David Paice, James
Davies, Quentin (Grantham) Pickles, Eric
Davis, Rt Hon David (Haltemprice) Prior, David
Duncan, Alan Randall, John
Duncan Smith, Iain Redwood, Rt Hon John
Evans, Nigel Robathan, Andrew
Faber, David Robertson, Laurence (Tewk'b'ry)
Fallon, Michael Roe, Mrs Marion (Broxbourne)
Flight, Howard Rowe, Andrew (Faversham)
Forth, Rt Hon Eric Ruffley, David
Fowler, Rt Hon Sir Norman St Aubyn, Nick
Gale, Roger Sayeed, Jonathan
Garnier, Edward Shephard, Rt Hon Mrs Gillian
Gibb, Nick Shepherd, Richard
Gill, Christopher Simpson, Keith (Mid-Norfolk)
Gorman, Mrs Teresa Soames, Nicholas
Gray, James Spelman, Mrs Caroline
Greenway, John Spicer, Sir Michael
Grieve, Dominic Spring, Richard
Gummer, Rt Hon John Steen, Anthony
Hamilton, Rt Hon Sir Archie Streeter, Gary
Hammond, Philip Swayne, Desmond
Heald, Oliver Syms, Robert
Heathcoat—Amory, Rt Hon David Tapsell, Sir Peter
Hogg, Rt Hon Douglas Taylor, Ian (Esher & Walton)
Horam, John Taylor, John M (Solihull)
Howarth, Gerald (Aldershot) Taylor, Sir Teddy
Jack, Rt Hon Michael Townend, John
Jenkin, Bernard Trend, Michael
Johnson Smith, Rt Hon Sir Geoffrey Tyrie, Andrew
Key, Robert Viggers, Peter
Kirkbride, Miss Julie Walter, Robert
Laing, Mrs Eleanor Wardle, Charles
Lait, Mrs Jacqui Waterson, Nigel
Lansley, Andrew Wells, Bowen
Letwin, Oliver Whitney, Sir Raymond
Lewis, Dr Julian (New Forest E) Whittingdale, John
Lidington, David Widdecombe, Rt Hon Miss Ann
Lloyd, Rt Hon Sir Peter (Fareham) Willetts, David
Luff, Peter Winterton, Mrs Ann (Congleton)
MacGregor, Rt Hon John Winterton, Nicholas (Macclesfield)
MacKay, Andrew Woodward, Shaun
Maclean, Rt Hon David Yeo, Tim
McLoughlin, Patrick Young, Rt Hon Sir George
Malins, Humfrey Tellers for the Noes:
Sir David Madel and
Mr. Stephen Day.

Question accordingly agreed to.

Bill read the Third time, and passed.