HC Deb 14 May 1998 vol 312 cc502-4
5. Mr. David Hanson (Delyn)

If she will make a statement about the work of the Low Pay Commission. [40957]

The Minister of State, Department of Trade and Industry (Mr. Ian McCartney)

The Low Pay Commission has completed its comprehensive programme of consultation to obtain views of employers, employees, interested organisations and individuals on the national minimum wage and related issues. It also undertook a series of visits to seek local opinions throughout the UK, including Wales. I understand that it is on course to make its recommendations to the Government by the end of this month.

Mr. Hanson

Is my hon. Friend aware that the Low Pay Commission's recommendations will be particularly welcome in Wales, where 43,000 people still earn less than £2.50 an hour and where 2,000 of my constituents are condemned to family credit by low-pay employers? Can my hon. Friend confirm that, at the end of the Tory years, the inequality in pay levels was greater than it was in Victorian times? In view of that, will he take the opportunity to ask the right hon. Member for Wokingham (Mr. Redwood) about his views on the minimum wage, given his leader's support for it?

Mr. McCartney

I can confirm that the legacy of the previous Government was one of the highest ever levels of poverty and low pay in the United Kingdom. Whether in Wales, Scotland, England or Ireland, the levels of low pay were truly horrendous. The right hon. Member for Wokingham (Mr. Redwood) will have to answer for himself, but it is interesting to note that he has not yet given any support to his party leader, who has made a policy U-turn in that he is now willing to accept the introduction of a minimum wage. Perhaps the right hon. Member for Wokingham will say whether he will continue to oppose the introduction of a minimum wage following the recommendation of the Low Pay Commission.

Mr. Tony Baldry (Banbury)

Before the Minister disappears from the Dispatch Box, will he agree that the minimum wage can be summed up simply? If it is set at or below market levels it will be otiose; if it is set above market levels it will lead to a loss of jobs. Is not that the simple fact?

Mr. McCartney

When Conservatives talk about the minimum wage, they usually use the word odious rather than otiose. I shall give the hon. Gentleman a simple explanation: the minimum wage will be good for business and good for the workers. It will be equitable and its level will be set due to economic circumstances. Millions of people in Britain are ready and waiting for its introduction.

Mr. Chris Pond (Gravesham)

Can my hon. Friend confirm that 80 per cent. of the electorate, including two thirds of those who still admit to being Conservative supporters, believe that a national minimum wage is a good idea and support it firmly? They understand that it is not only a way of dealing with the major social injustice left by the previous Government, but good business sense. Will he also confirm for Conservative Members who still carry around their 0-level economics textbooks that the evidence shows that a minimum wage can help to enhance productivity, efficiency and, therefore, employment?

Mr. McCartney

My hon. Friend is absolutely right. The only people in Britain who oppose the introduction of a minimum wage are the Rag, Tag and Bobtail outfit in front of us—the shadow Department of Trade and Industry team. A majority of businesses and, overwhelmingly, the people of Britain want a national minimum wage to be introduced. International and national comparisons—I include the United States in that—show that a sensibly introduced minimum wage helps to create jobs, not to destroy them.

Mr. Tim Boswell (Daventry)

At least we now know from the Minister that the figure will be published in a fortnight. We can then start the fully informed debate on the subject.

Has the Minister noticed yesterday's news on inflation and the concern expressed by the Chancellor about increases in the private sector, especially in pay rates? Has he noticed the warnings in the Bank of England's inflation briefing about the fact that its computations could take no account of the recent decline in the exchange rate or the introduction of the minimum wage? What conclusions has he drawn about likely implications for pay differentials, for inflation and for the future course of interest rates?

Mr. McCartney

Why should there be surprise that the Bank of England seeks to have a view on any report published by the Low Pay Commission? The Government made it clear from the outset, when we established the LPC, that it would have to make recommendations based on economic circumstances, which include issues surrounding the economy, including inflation. There is nothing new in that.

There is also nothing new in the Government talking to people in the labour market about pay restraint, and that includes people at the top of the tree. Unlike the hon. Gentleman, we are prepared to be even about the matter and to say to people at the very top, including those who support the Conservative party and campaigned against the minimum wage, that it is about time they showed pay restraint and that there should be social justice at the bottom through the introduction of a minimum wage.

Mr. Michael Clapham (Barnsley, West and Penistone)

In the context of the minimum wage and the fairness at work package, has my hon. Friend had discussions with United Kingdom-based multinationals such as Rio Tinto about the need to promote human rights and to protect the environment in areas of the world where they practise?

Mr. McCartney

I thank my hon. Friend for asking such a good question. Through trade arrangements and arrangements in Europe, the Government regularly work nationally and internationally to ensure that agreements in trade organisations include human rights and employment and environment rights. We have been negotiating in the World Trade Organisation, in the multilateral agreement on investment and in other international agreements to ensure fair standards throughout the world, including in multinational companies working in third-world countries. The Government are clear about that commitment. We meet business all the time. Inward investors come to Britain for our skills and knowledge and, in the main, provide good business practice, which I welcome.