HL Deb 28 October 1997 vol 582 cc977-9

3.7 p.m.

Lord Dormand of Easingtonasked Her Majesty's Government:

What forms of consultation the Low Pay Commission has undertaken and what plans it has in connection with the consultations.

The Minister of State, Department of Trade and Industry (Lord Clinton-Davis)

My Lords, the Low Pay Commission has invited a large number of organisations and individuals to submit written evidence to it. It is also taking oral evidence. Last week it visited Scotland to hear evidence there and it will be visiting Wales, Northern Ireland and the regions of England. Evidence gathered will be used during the formulation of the commission's recommendations to government about the statutory national minimum wage.

Lord Dormand of Easington

My Lords, is my noble friend aware that it is a cause of widespread satisfaction that the Government have entrusted the role of providing advice to an independent body? Will he give an assurance that there will be no change in that principle for the rest of the investigation? I am grateful for my noble friend's remarks on consultation. However, will he say whether there have been any problems with the forms of consultation that have taken place so far? Is he aware—I am sure he is—that there is often disagreement on what constitutes real consultation?

Lord Clinton-Davis

My Lords, I am grateful to my noble friend for the way in which he posed the first two questions, and indeed the third. The commission is an independent body. Its chairman has been widely applauded, even by supporters—few though they may be—of the party opposite. I can give my noble friend an assurance that we do not envisage any change in the principles that have been adumbrated.

Regarding the progress that has been made, the commission got down to work within 90 days of the election. It has approached over 600 organisations and individuals and invited them to give written evidence. Over 300 items of evidence have been received. On any account, that is a good response, given that the first invitations were issued in late August, with flexible return-by dates. I have heard no complaints about the procedures that have been adopted.

Baroness Blatch

My Lords, in the light of the comments by the Minister without Portfolio in another place, who said: I think there will be a differential. That is the view of the Government and the right course of action to take", and the request made by the President of the Board of Trade that the commission should consider differentials, is it the Government's wish that the commission should consider exemptions from the minimum wage for 16 to 25 year-olds, and perhaps even for young people on Welfare to Work programmes?

Lord Clinton-Davis

My Lords, the position that has been applied as far as the Low Pay Commission is concerned is set out very clearly in its terms of reference, which have been put before Parliament and clearly explained. They are, in essence, to recommend the initial level at which the national minimum wage might be introduced; to make recommendations on lower rates or exemptions for those aged 16 to 25; and to consider and report on any matters referred to it by Ministers. The commission has to have regard to the wider economic and social implications, the likely effect on the level of employment and inflation, the impact on the competitiveness of business, particularly the small firms sector, and the potential impact on the cost to industry and the Exchequer. I believe that that sets out the position very clearly and I do not think that my right honourable friend the President of the Board of Trade has departed from it in any way.

Lord Barnett

My Lords, can my noble friend tell us clearly whether the Government will necessarily feel obliged to accept every dot and comma that the commission recommends?

Lord Clinton-Davis

My Lords, of course they will not. The commission is considering the evidence. It will weigh the evidence in making its recommendations and then the Government will embark upon a full and comprehensive consideration of those recommendations. It is for the Government eventually to decide on the policy.

Lord Evans of Parkside

My Lords, can my noble friend give the House an indication of when he expects the commission to produce its report and make a recommendation to Her Majesty's Government? Is he aware that there have been some suggestions that it could be up to three years before such a report could be produced? Will he take this opportunity to make it clear that he expects a report to be produced far more quickly than that?

Lord Clinton-Davis

My Lords, I gladly respond to that question. There is no question of three years. The commission has been asked to report to the Prime Minister by the end of May 1998 at the latest.

Lord Acton

My Lords, is my noble friend aware that the United States of America raised its minimum wage to $5.15 last month? Is he aware that those of us who shop in both places know that $5.15 buys rather more in the supermarkets of Cedar Rapids, Iowa, than does £4 in Tesco's, Covent Garden? Are not fears of the minimum wage somewhat exaggerated?

Lord Clinton-Davis

My Lords, first, perhaps I may welcome my noble friend to these Benches.

Noble Lords

Hear, hear!

Lord Clinton-Davis

I have to confess immediately that his knowledge of Cedar Rapids, Iowa, exceeds mine. Having said that, I think the point he makes is well taken, although I do not wish to embark upon a discussion of the actual level. That is initially a matter for the Low Pay Commission to recommend.

Baroness Blatch

My Lords, in the light of the answer which the Minister gave to my question, did he agree or disagree with the honourable Member in another place, the Minister without Portfolio, when he said that that was the Government's view about differentials being applied to the minimum wage?

Lord Clinton-Davis

My Lords, if in fact my honourable friend made that assertion, I dare not disagree with him!

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