Wages Councils (Hansard, 2 November 1989)

§ The Parliamentary Under-Secretary of State, Department of Employment (Lord Strathclyde)
My Lords, no final decision on the councils' future has yet been taken.

§ Lord Jenkins of Putney
My Lords, is the noble Lord aware that at least one is relieved that a negative decision has not been taken? Is he aware also that there is a widespread feeling not only among employees and their representatives but also among employers that the wages councils perform an essential role? The conclusion that it is hoped the Government will come to is that the councils should be maintained in force. I am not saying that the councils are incapable of improvement, but in principle I and many other people hope that the Government will decide they must remain in being.

§ Lord Strathclyde
My Lords, the noble Lord's views will obviously be taken into account before a final decision is taken.

§ Lord Mellish
My Lords, will the Minister note that those of us who have experience of wages councils have found that the wages that they set, which are the minimum wages permitted, are then adopted by many employers as the maximum?

§ Lord Strathclyde
Yes, my Lords. Perhaps I should point out that two-thirds of the workers who come under wages council schemes are paid more than the minimum.

§ Baroness Turner of Camden
My Lords, does the Minister not agree that in the main the wages councils which are still in existence cover relatively poorly paid and poorly qualified people, often from ethnic minority groups, who are the most exploitable people in the workforce? Does he further agree that it would be in the public interest to ensure that those people have some continuing form of protection?

§ Lord Strathclyde
My Lords, I am not sure that I agree entirely with the premise of the noble Baroness. Regarding training, as she knows well, the Government have made great changes in the way in which workers are trained in order to improve the situation across the board.

§ Lord Thorneycroft
My Lords, will the noble Lord remember that wages councils tend to restrain wages among the most successful and cause unemployment among the weakest members of society? Will the Government therefore consider very carefully before developing the system?

§ Lord Strathclyde
My Lords, there is a certain amount of evidence to support what my noble friend has said.

§ Lord Hatch of Lusby
My Lords, is the noble Lord aware that in many parts of the country in jobs covered by wages councils wages are paid which are well below the minimum wage set by those councils? He shakes his head; I can give him instances from my own experience in the Norfolk area. Is that not the result of cuts in the number of inspectors, who can no longer enforce the decisions made by the wages councils —cuts which have been made by this Government? Is it not the case that there are fewer wages inspectors than there were when this Government came into office?

§ Lord Strathclyde
No, my Lords. Compliance in that area works out at a rate of between 96 per cent. and 97 per cent. I am sure that the noble Lord will agree that that is an extremely high rate. There are 71 inspectors who visit annually 30,000 establishments and continue to do a very good job. There has been a slight increase in the number of prosecutions. However, as I said, the level of compliance is very high indeed.

§ Lord Boyd-Carpenter
My Lords, can my noble friend say when the decision will be announced as to whether those relics of the economics of the 1960s and 1970s are to continue?

§ Lord Strathclyde
Yes, my Lords: before the end of the year.

§ Lord Rochester
My Lords, can the noble Lord assure the House that in reaching their decision the Government will take full account of the views of bodies which are well able to give them advice; for example, the Institute of Personnel Management?

§ Lord Strathclyde
Yes, my Lords. There has already been a major consultation exercise.

§ Lord Hatch of Lusby
My Lords, the noble Lord gave figures relating to the number of inspectors but he did not answer my question. Is it the case that the number of inspectors has been reduced? If so, does that not cast doubt on the figures for compliance which he gave, since there are insufficient inspectors to do the inspecting?

§ Lord Strathclyde
My Lords, the number of inspectors is adequate given the high rate of compliance, and that is what counts.

§ Lord Hailsham of Saint Marylebone
My Lords, would it not be better to await the result of the government decision and then debate the matter properly when the facts can be fully explored?

§ Lord Tordoff
My Lords, would it not be better if the noble Lord were to answer the question which the noble Lord, Lord Hatch, has put? He was asked a specific question. If he does not have the answer, should he not admit that and offer to write to the noble Lord later in accordance with normal procedure?

§ Lord Strathclyde
My Lords, the number of wages inspectors has been cut twice since 1979. In 1980 an increase made by the previous Labour Government was slightly curtailed, reducing the level of inspection which had obtained immediately prior to 1978. However, I must point out that the important point regarding the number of inspectors is the compliance rate. The compliance rate is extremely high and therefore the number of inspectors is adequate.

§ Baroness Turner of Camden
My Lords, will the Minister please tell the House what evidence there is to support the statement that wages councils keep wages down?

§ Lord Strathclyde
My Lords, there is a substantial amount of evidence, which I shall not read out. Perhaps I could write to the noble Baroness with a list of eight publications issued over the past six or seven years. She will find that the evidence is adequate to back up the various claims that have been made.

§ Lord Jenkins of Putney
My Lords, I agree with the noble Lord that there is a difference of opinion on some aspects of the matter. There is a large body of opinion which takes a different view from that which he has just expressed. Is it not the case, indisputably, that if wages councils were abolished we should be the only member of the EC without any legislative protection for the low paid? Does the Minister agree that the Government will not want to be in a minority of one yet again?

§ Lord Strathclyde
My Lords, some other countries have a token minimum wage. This Government do not believe in token gestures.