HC Deb 06 May 1999 vol 330 cc1082-3
14. Mr. Ben Chapman (Wirral, South)

What assessment he has made of the effect on the UK economy of the implementation of the national minimum wage and the working time directive. [82371]

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

The national minimum wage will ensure fair competition on the basis of quality of goods and services provided and not low pay. It will help to promote work incentives, encourage firms to invest in training and improve the morale and commitment of workers, bringing about reduced levels of staff turnover and absenteeism. Productivity will improve and employers, workers and the economy as a whole will benefit.

Our assessment of the costs and benefits resulting from the implementation of the working time directive are contained in the regulatory impact assessment relating to the directive, a copy of which is held in the Library of the House.

Adjusted data from official statistics, which will be available in October, will give some idea of the extent of the shift in workers' earnings resulting from those new legal protections.

Mr. Chapman

I welcome my right hon. Friend back to the Dispatch Box. It is good to see him in such fine fettle. Does he agree that, although the minimum wage has been operating for only a short time, its competitiveness has been well established during that time? Does he agree also that, taken alongside the working time directive, trade union recognition and other measures taken by the Government, the minimum wage has vastly improved not only the lot of the British worker, but the economy?

Will my right hon. Friend compare and contrast that with the policy of the Conservative party, which not only opposed those measures but, in government, viewed the way forward as a low-wage, low-cost, low-productivity, sweatshop economy? Does he agree that the national minimum wage and the working time directive are not over-regulation, but better regulation-better for the economy and better for the workers?

Mr. McCartney

My hon. Friend is absolutely right on several counts. Nine out of 10 companies in the United Kingdom support the concept and principle of the minimum wage because of the business case for it. Four out of 10 companies complied in advance of 1 April. In all the inquiries so far, only 50 companies that have had complaints made about them have refused to implement the minimum wage and, in those instances, our inquiry teams are following procedures to ensure that the workers in those companies get justice and receive the minimum wage.

My hon. Friend is absolutely right to say that the only people in Britain who still oppose the minimum wage are the party of Scrooges on the Conservative Benches and the handful of isolated employers who refuse to implement the minimum wage. Since 1 April, 2 million workers in Britain have received the minimum wage, including more than 180,000 in Scotland and 100,000 in Wales. It has been a tremendous success and the Conservatives are the only people who are still avoiding the question. At the next election, will they say that they will cut the minimum wage?

Mr. John Redwood (Wokingham)

On behalf of the Opposition, I welcome back the Minister. We are all delighted that he has made a good recovery and we have missed his own special brand of invective in our recent exchanges.

The Minister believes that the minimum wage must be seen to be fair and bear a fair relationship to what others can earn. Mr. Gavyn Davies, and his loadsamoney, has obviously made it much more difficult for the Minister to set out the case. As one of the leaders of the anti-fat cats campaign when the Conservatives were in government, will the Minister take action to detach Mr. Davies from some of his loadsamoney, or has the Minister come round to our view that it is quite wrong to interfere in money that people come by legally in a private marketplace? If he has changed his view and agrees with us, where does that leave him in presenting Labour's brand of different policy and fairness?

Mr. McCartney

The right hon. Gentleman has got it wrong again. We introduced the fat-cat tax—the windfall tax—which he opposed. That tax got 250,000 young people and long-term unemployed people back to work. We have halved youth unemployment and long-term unemployment. It was he and his party who were the supporters of fat cats, and this Government who introduced social justice. He still has not answered the question of why his party is committed at the next election to opposing the continuation of the minimum wage, when that would impose a wage cut on 2 million British workers.

Mr. Redwood

Will the Minister just answer? Does he approve of Mr. Davies's remuneration or will he do something about Labour fat cats?

Mr. McCartney

Fortunately for Mr. Davies, he does not qualify for the national minimum wage—but 2 million British workers do. The right hon. Gentleman still opposes that minimum wage. He is the Scrooge, not this Labour Government.

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