Minimum Wages: ILO Requirements (Hansard, 22 April 1985)

§ Lord Davies of Leek
My Lords, I beg leave to ask the Question standing in my name on the Order Paper.

§ The Minister of State, Ministry of Agriculture, Fisheries and Food (Lord Belstead)
My Lords, our adherence to International Labour Convention 26 limits the Government's ability to promote employment opportunities and we therefore propose to deratify the convention subject to the consultations required by ILO rules. In the event that we proceed with deratification, our obligations on minimum wage-fixing will in due course come to an end.

§ Lord Davies of Leek
My Lords, I thank the Minister for that Answer. Is he aware that modern Conservatism has moved many miles away from the old compassionate Conservatism of the past history of its great movement? Does he not realise that the labourer is worthy of his hire, and that the road that we are taking means that we shall have cheap labour which will not give us the best value for money?

§ Lord Belstead
My Lords, I do not agree with that. The Government do not agree with that. People need to price themselves into jobs, and wages councils almost certainly are not helping with that process at the present time.

§ Lord Dean of Beswick
My Lords, can the Minister tell the House why the Government continue with this fallacy of lowering wage rates at the bottom end of the scale, among the poorest paid section of our community, when in fact they are already lower-paid than most of their contemporaries in Europe?

§ Lord Belstead
My Lords, there are a lot of different surveys and views on this. Surveys by the Institute of Directors and Industrial Relations Review Report indicate that employment is jeopardised by wages council pay rates, particularly for young people. Indeed, the consultation paper which my right honourable friend the Secretary of State issued on 21st March referred to a growing body of evidence on this. What is certain is that youth rates in wages councils are higher in relation to adult rates than outside wages councils' settlements. This has an adverse effect on jobs.

§ Lord Boyd-Carpenter
My Lords, is my noble friend aware that the true compassion for the unemployed is 898 to take every measure possible to increase employment, and that the step which the Minister has announced will undoubtedly help this and is in the true tradition of Conservative compassion?

§ Lord Belstead
My Lords, may I make it clear that what the Government are saying is that they intend, after consultation, or subject to consultation, to deratify the convention. The consultation paper which my right honourable friend has put out has made clear that there are two main options after that. There could be abolition of the wages councils or there could be fairly fundamental reform. Either way I would guess that we would be going along a road which my noble friend Lord Boyd-Carpenter would approve, and the Government most certainly agree with my noble friend.

§ Lord Cledwyn of Penrhos
My Lords, is the noble Lord aware that the policy of pricing into jobs was the policy of successive Conservative Governments over a period of a century and more, and that the result was lower wages and poor conditions? Is he aware that that was the case, and is that what he means by "pricing into jobs"?

§ Lord Belstead
No, my Lords; we do not mean that, but we do mean that the rigidity and inflexibility of the wages councils' system is something which needs to be looked at fundamentally. That is why my right honourable friend has put out his consultation paper and now awaits reactions to that by 31st May.

Viscount St. Davids
My Lords, has the noble Lord any figures to show the percentage of apprentices' wages to adult wages in this country as compared to those of other countries? If he has, would it not be of great interest if he could tell the House? If he has not, can he put them somewhere where they will be obtainable to the House?

§ Lord Belstead
My Lords, I shall certainly see whether I can do that for the noble Viscount. I must apologise in that I do not have those figures with me.

Lord Wallace of Coslany
My Lords, is the noble Lord aware that he said that workers must price themselves into a job? Is it a fact then that the Government think that the workers should shop around on their bikes? Is he further aware that what he has said is a certain recipe for considerable industrial unrest?

§ Lord Belstead
My Lords, I would not accept for one moment the last assertion which the noble Lord has made. On the first part of his question, the Government believe that either the route of reform or possibly the route of abolition—and we genuinely are waiting to see what interested parties think about these in the consultation period—provides benefits in the creation of employment.

§ Baroness Seear
My Lords, does the noble Lord not agree that the rates for young people should be distinguished from rates for adults? A large number of wages councils are concerned with rates of pay for women, which are at an extremely low level already. Does he agree that in reviewing the question of wages 899 councils the two issues, including the appropriate rates for youngsters, especially if they are in the process of learning a job, and the rates that apply for adult women on unskilled and semi-skilled work, which are already at a low level, should be considered separately?

§ Lord Belstead
My Lords, that is precisely the sort of matter which the Government would wish to take into account during the consultation period.

§ The Earl of Onslow
My Lords, is my noble friend aware that there is an enormous difference between the cost of employing somebody and the cost of what that person receives? At certain low wage levels the cost of what that person receives in real take-home pay can go down with an increase in his monetary wage. This has a disastrous effect, first, on the inflationary costs of the company and, secondly, on labour relations. Is my noble friend not aware that it is vitally important that the review of tax and social security which is being undertaken at the moment by the Government should be expedited and should be as thorough as possible?

§ Lord Belstead
My Lords, we are getting a little wide of the original Question, but I agree with my noble friend.

§ Lord Gallacher
My Lords, can the Minister tell the House whether, if the Government decide to take the route of abolition, that will include the Agricultural Wages Council?

§ Lord Belstead
My Lords, a statement was made that the Agricultural Wages Council, which falls under a different convention, will be continuing for the next 10 years.

§ Lord Brockway
My Lords, in applying their policy of lower wages can the Government not have consideration for those who are on the lowest level? Would the Minister not agree that the wages councils have saved thousands of people from being driven below the hunger level?

§ Lord Belstead
My Lords, I am bound to say to the noble Lord that, as the consultative paper makes clear, the opposite appears to be happening at present. A great number of workers who fall within the scope of the wages board are apparently content with the minimum being offered statutorily. In other words, there is no competition, either from those who are employed or from those who are employers, to try to offer better wages in some cases than those that are being set down statutorily. This is yet another reason why the Government believe that the present situation is unsatisfactory. It needs to be looked at. We have not said definitely what we wish or think we ought to do. My right honourable friend has put out this consultative document. It came out on 21st March and I know that he genuinely wants views to be given on the paper.

§ Lord Elwyn-Jones
My Lords, was not the purpose of the wages councils to prevent exploitation of workers? If the councils are to go, what steps do the Government intend to take to prevent exploitation in the way that used to be prevented by wages councils?

§ Lord Belstead
My Lords, this is precisely the kind of point on which we wish to hear views during the period that I have mentioned.