§ 2. 53 p.m.
§ Lord Orr-Ewing asked Her Majesty's Government:
§ How the United Kingdom compares with other European countries in the amount of take-home pay, after tax, of industrial workers earning the average industrial wage.
§ Lord HeskethMy Lords, international comparisons should be interpreted with care. Figures produced by the OECD for 1989 show a comparison for 17 European countries. The take-home pay after tax and national insurance contributions of a single industrial worker in the United Kingdom on the average industrial wage was £8,414. That figure was exceeded only in Luxembourg and Switzerland.
§ Lord Orr-EwingMy Lords, is my noble friend aware that these are surprising figures? Does he agree that they need to be more widely known than just through this Question? Does the Minister agree that they underline the need to keep wages relatively steady if we are to increase our exports, reduce our imports and, above all, reduce unemployment?
§ Lord HeskethMy Lords, my noble friend is correct. We are at the top of the earnings league within those 17 countries. It is important to remember that the actual burden of tax in the United Kingdom for a single person is about 27. 4 per cent. compared with about 46 per cent. in Denmark and 37 per cent. in Sweden.
§ Lord PestonMy Lords, perhaps I may say that both the noble Lord and his noble friend are technically wrong. It is not the net pay after tax that is relevant to our industrial costs; it is the grossed-up pay. What has been said is quite misleading. I am not sure which way round the Government wish us to read these figures. Does the noble Lord wish us to read them as high, which is good because our workers are doing so well; or does he want us to read the figures as being high, which is bad because our workers are too greedy? Can the noble Lord tell us the Government' s position on that matter?
§ Lord HeskethMy Lords, I assume that the noble Lord, Lord Peston, wishes to see them as poor and the figures to be low. The reality is that the figures reveal a fact which is often hidden that is to say, that there is good news in terms of the rewards which the British working man receives today for his endeavours in this country.
§ Lord PestonMy Lords, so I am right. The noble Lord does not wish to attack the labour force in this country or those who lead it, for being too greedy. I am right in saying that the Government approve of these high wages?
§ Lord HeskethMy Lords, successful Government depends on avoiding simplicity. There is a happy balance which depends on those who work in the United Kingdom receiving a proper reward and the successful progress of the country's economy.
§ Baroness SeearMy Lords, the noble Lord referred to the wages of the average industrial worker. Do the figures refer to the male and female combined or only the male? If they refer to the male and female combined what will the result be?
§ Lord HeskethMy Lords, I know that the noble Baroness, Lady Seear, is very interested in the family. I have the figure for the take-home pay for a family with two children. The figure is £9, 566 which is exceeded by Luxembourg, Norway and Switzerland.
§ Baroness SeearMy Lords, that is no answer at all. I asked whether the figures given were the combined figures for both male and female. At this moment I am interested not in the family but in knowing what men and women are earning together or whether the figures given relate just to the male?
§ Lord HeskethMy Lords, I do not have a separate figure for females. I have the figure for the number of females working in the economy and I am sure that the noble Baroness also has that. One has to remember that the combined figure is an accurate across-the-board statistic to give an indicator.
§ Lord Taylor of GryfeMy Lords, does the Minister agree that the important figures are the unit costs of production and not those that he is quoting at the moment? Does he also agree that some of the figures quoted for increases in boardroom payments make it extremely difficult to restrict working-class claims for some degree of equity?
§ Lord HeskethMy Lords, the noble Lord, Lord Taylor, asks a question which in a way tries to avoid the first Answer that I gave. The reality is that the average worker in the United Kingdom is doing exceptionally well within a competitive Europe. Companies will reward all their employees from the lowest to the highest on the basis of what they feel they can contribute. I am sure that on the Benches opposite there is a desire to resist returns being given to those who have made a contribution. That is a difference in philosophy and it is one which will be reflected by a falling economy if the party opposite ever comes to power.
§ Lord GisboroughMy Lords, can my noble friend say where Sweden comes in the batting league with its long history of socialism?
§ Lord HeskethMy Lords, it is very expensive. Interestingly, the figures are these. In terms of net value take-home pay for a two-child family in Sweden—which we are often told is a paradise—the figure is £6, 800 compared to £9, 500 in this country.
§ Lord Dean of BeswickMy Lords, is the Minister aware that during an exchange which took place a short time ago in this House on the rates of pay for industrial workers in this country and those of our competitors in the rest of Europe, it was stated that our rates of pay were considerably lower certainly in engineering and manufacturing? Is the Minister also aware that our hourly rates of pay are well below those of our German and French competitors? Can 616 the Minister say how he arrives at the figures which indicate that we are better off? What is happening in between? I believe that the figures are still the same.
§ Lord HeskethMy Lords, if the noble Lord, Lord Dean, takes issue with the OECD figures, I am sure that he will take the matter up. I feel that it is perfectly reasonable for the Government to present those before the House today.
§ Lord RochesterMy Lords, does the noble Lord acknowledge that these figures are meaningless unless they take into account also the factor of productivity?
§ Lord HeskethMy Lords, they would be meaningless if the Question revolved around productivity. The Question on the Order Paper does not revolve around productivity. It deals with real pay in comparable states in Europe.