HC Deb 27 January 2000 vol 343 cc562-4
4. Mr. Gordon Prentice (Pendle)

How many people have contacted the minimum wage hotline since it was inaugurated. [105752]

The Secretary of State for Trade and Industry (Mr. Stephen Byers)

There have been 150,000 calls to the national minimum wage hotline.

Mr. Prentice

I suspect that a good number of that 150,000 came from Pendle and north-east Lancashire which is a low-pay black spot. Is the Secretary of State aware that when the national minimum wage came in last April, 8 per cent. of all adults in employment in Pendle received a pay increase, as did no fewer than 30 per cent. of all part-time women employees? Not only did that have huge practical importance: for the Labour party and the Labour Government it had huge symbolic importance. Will the Secretary of State let us know whether there will be an annual uprating of the national minimum wage which people in my constituency and across the land fully expect?

Mr. Byers

I am delighted to hear that so many workers in my hon. Friend's constituency have benefited from the introduction of the national minimum wage. The important message that we can both put over to them is that they stand to lose that if the Conservative party is ever returned to office. In answer to his question, the Government have made it clear throughout that it is not their policy automatically to uprate the national minimum wage annually. Any increase will need to be considered in the light of the economic conditions at a particular time. I know that this cautious approach will be criticised in some quarters, but it is important that this radical change in the labour market is introduced successfully—as it has been. We must not take any steps which will disadvantage its successful introduction.

Dr. Vincent Cable (Twickenham)

Does the Secretary of State agree that despite reservations expressed about the national minimum wage, by me among other people, it has proved to be a success and has been accepted as such across industry? In the same spirit of consensus, will he agree that there needs to be a mechanism for increasing the minimum wage at least in line with inflation over the past two years and for removing discrimination against younger workers aged between 18 and 22?

Mr. Byers

I welcome the Liberal Democrats' decision on the minimum wage. They described their own policy as being economically illiterate and politically inept, and that was absolutely right. Their policy was exactly that, in line with many of the policies that they pursue. The hon. Gentleman, who opposed the national minimum wage and the way it was introduced, is now calling for an annual uprating. It is important to remember that the national minimum wage is not a state benefit. It is paying people for work. That means that an increase will be linked to the economic circumstances of the day. It has made a break with state benefits, which are annually uprated. The minimum wage is about making work pay for people. That is exactly what we are doing and what we will continue to do.

Mrs. Alice Mahon (Halifax)

While I congratulate the Government on introducing the minimum wage, does my right hon. Friend agree that £3.60 an hour is too low? In view of the profits of various companies and the fat-cat increases, does he accept that it is time to increase the minimum wage and link it into a mechanism where it is increased annually, at least in line with the rate of inflation? I suggest that it should go up to £5 an hour.

Mr. Byers

An increase from £3.60 to £5 an hour would be an increase rather in excess of the rate of inflation. I know that my hon. Friend has been a powerful advocate of the minimum wage for many years—and in the years when it may not have been so fashionable to support it. The Low Pay Commission was kept in being after it made its first recommendations partly to monitor continually the impact of the national minimum wage on the labour market, and levels of employment in particular. It has just reported to the Government and we are considering our response, which we hope to make in the next few weeks. We will undoubtedly need to consider the questions of uprating and the youth rate.

Mr. Nick St. Aubyn (Guildford)

We know from previous answers that thousands of people have gone from low pay to no pay as a result of the Government's policies. Does the Secretary of State regard the thousands of people who have lost their jobs as a result of the minimum wage legislation as a sign of the success or failure of his Government's policy?

Mr. Byers

As usual, the hon. Gentleman is allowing his prejudices to get in the way of the facts, which are that there is higher employment in this country than ever before and that our introduction of the national minimum wage has taken well over 1.5 million people out of poverty pay. All that would be put at risk by the policies that his party pursues.