HL Deb 12 November 1981 vol 425 cc311-3

3.7 p.m.

Lord Boyd-Carpenter

My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

The Question was as follows:

To ask Her Majesty's Government what steps they are taking to ensure that the decisions of wages councils are consistent with the policy of Her Majesty's Government in respect of the appropriate level of wage increases.

The Minister of State, Ministry of Agriculture, Fisheries and Food (Earl Ferrers)

My Lords, the Government have made clear their view that all negotiators, including those on wages councils, should aim for realistic settlements which improve competitiveness and which do not discourage employment. However, we remain opposed to direct Government intervention in specific negotiations and consider that where wages councils are still necessary the minimum rates should continue to be set by representatives of the trade.

Lord Boyd-Carpenter

My Lords, while thanking my noble friend for that reply, may I ask him two questions? Where do the Government think wages councils are still necessary and, secondly, are the Government satisfied that the present wages councils' decisions are consistent with the Government's general policy on moderation in wage increases?

Earl Ferrers

My Lords, the wages councils are set up and are in operation only in conditions where there are no other recourses to collective bargaining or where pay is low. My noble friend asks whether we are satisfied with the results of the settlements. I can only tell him that Her Majesty's Government are not satisfied if the settlements of wages councils are such as to lead to an unacceptable increase in unemployment. That is why Her Majesty's Government are concerned to ensure that wages councils should take full account of the consequences of their decisions before they arrive at settlements.

Lord Boyd-Carpenter

My Lords, I am afraid my noble friend misunderstood my question. I asked him whether the Government were satisfied that wages councils did conduct themselves in that way, or whether they did not?

Earl Ferrers

My Lords, the wages councils can conduct themselves in whatever way they wish. If he is worried about that, all I would tell my noble friend is that during the 1980–81 pay round the manufacturing industries' wages councils settled at about a 9 per cent. increase, which was about the equivalent of the private sector; the non-manufacturing wages councils settled for about 12 per cent., which was about 3 per cent. higher than the private sector.

Lord Underhill

My Lords, may I ask the Minister whether it is not correct that it has been reported that a substantial number of employers do not pay the present rate set out by some of the wages councils and, if that is correct, what is the proportion and what will the Government do about it?

Earl Ferrers

My Lords, my information is that on the whole employers pay above the minimum rate set by the wages councils, and in fact sometimes in the nature of 20 per cent.

Lord Spens

My Lords, may I ask the Minister whether he has had time to consider the suggestion on the wages councils, which I put to him about three or four weeks ago, that the Government should declare an economic state of emergency and suspend minimum wage rates, particularly for the young people who are unemployed who are now being priced out of jobs?

Earl Ferrers

My Lords, argument can be made for the abolition of all wages councils—I accept that. What the Government have concluded is that the arguments for doing so have not yet been sufficiently persuasive to suggest that this should come about, simply because—I agree with the noble Lord in his thesis—if you abolish wages councils you will abolish minimum rates of pay. If that happens, you will encourage more employment. The reverse side of that is that employers of those people who already have employment may be encouraged to pay them less than at the moment, and this could in certain circumstances lead to undesirable practices.