§ (" .—(1) If it appears expedient to the Secretary of State, he may, by order made by statutory instrument, provide for the total or partial exemption from the provisions of this Act of—
- (a) any area, sector of employment, trade or industry;
- (b) undertakings of different sizes;
- (c) persons of different ages; or
- (d) occupations or categories of persons.
§ (2) The power conferred by subsection (1) includes power to make such incidental, supplemental or transitional provision as appears to the Secretary of State to be appropriate.
§ (3) The power of the Secretary of State to make an order under this section includes the power to vary or revoke its provisions or to limit its operation for a specified period of time by means of a further such order.").
§ The Commons disagreed to this amendment for the following reason—
§ 1A Because the Commons consider that the national minimum wage should, so far as reasonably practicable, be uniform for all workers in the United Kingdom and that it is not appropriate to make different provision for different areas, sectors of employment, trades or industries, sizes of undertaking, occupations, or ages over 26.1534
§ Lord Falconer of Thoroton
My Lords, I beg to move that the House do not insist on their Amendment No. 1 to which the Commons have disagreed for their reason numbered 1A. With the leave of the House I shall also speak to Amendments Nos. 5, 6 and 7.
The new Clause 2 amendment—the power to make total or partial exemption at the whim of the Secretary of State—has been described by the noble Baroness opposite in earlier debates as providing real flexibility, a discretionary power, even—in one of her more fantastic flights of fantasy—trying to save the Government from making an horrendous mistake. It is simply not the case that the clause provides a harmless or helpful bit of flexibility. The clause exposes a fundamental difference between this side of the House and Members on the other side. We want the national minimum wage; they do not, and they have never denied that fact.
Despite what the Liberal Democrats have argued, this clause is not about regional variations. It is about exemptions and exclusions, and about tearing an enormous hole in the Bill. We have made clear both here and in another place that we shall resist any attempts to destroy or weaken the Bill. We are told that it is only a discretionary power. But why is it needed? What would be the criteria? Who might benefit from its use? Certainly not the workers who would have the protection that we have fought so hard to provide removed from them because a Secretary of State thinks it expedient.
I suspect that the clause is a device which will allow the Opposition to promise to the electorate at some time in the future that they will not repeal the National Minimum Wage Act. Indeed, with this clause they will not need to do so. It will be killed by the death of a thousand cuts, sector by sector, region by region. Beginning with the smallest firms, the national minimum wage would disappear. Firms may even be tempted to play roulette with their payroll numbers to remain small enough, or to locate to different regions, in order to be exempted.
The power would allow for a fragmented complicated, unfair system where some people have protection; and others, no doubt those most in need of it because they would be in the lowest paying sectors, would be left with no protection. The noble Baroness, Lady Miller, will, I am sure, tell us that the clause is there as a "just in case" measure. Just in case of what, my Lords? In case workers, in some sectors and regions, are no longer entitled to a minimum standard of pay? We reject that argument entirely.
We have acknowledged before, and I do so again, that the Bill already contains certain powers to exempt or vary the rate. Those are contained in clauses currently numbered Clauses 4 and 5. However, those were drafted carefully and deliberately because of our concern to avoid creating dangerous loopholes. That is why they were limited and did not permit variations by region, sector, occupation or size of business.
The Opposition's consequential amendments remove those limitations. A general power to exempt will have one certain result: endless special pleading from employers who do not want to have to pay the minimum 1535 wage. Let me remind the House that the minimum wage will be set at £3.60 for the full rate. It is a floor to wages not a going rate; and it is not an enormous sum. For a 40-hour week it comes to £144 a week, and that is before tax. It is important to remember these realities. That is what the Bill is all about. We are talking about gross pay of less than £7,500 a year. I believe it is important that workers have the protection of a national minimum wage. The electorate agree. I urge that the House does not continue to press this amendment. I beg to move.
Moved, That the House do not insist on their Amendment No. 1 to which the Commons have disagreed for the reason numbered 1A.—(Lord Falconer of Thoroton.)
§ Baroness Miller of Hendon
My Lords, perhaps I, like other noble Lords who spoke in the previous debate, may congratulate the noble and learned Lord, Lord Falconer. I probably have to agree with what was said, namely that his promotion was due to the fact that he was involved in the Welsh Bill. Other Ministers who were involved in the National Minimum Wage Bill were not so fortunate and did not survive the reshuffle.
I am disappointed, but I have to confess not surprised, that the one amendment your Lordships made to this Bill, apart from the consequential ones, has been rejected by the other place. After all, we were told by the Minister of State there that it was a wrecking amendment when it was nothing of the sort. We were told that by a Minister who yesterday in the other place once again described the hereditary Peers as descendants of robber barons and cattle thieves and who chastised the Liberal Democrats for siding with what he described as sweatshop owners and backstreet exploiters. He suggested that those who came in to vote on that occasion came in leaving their Ferraris and Mercedes in the carpark with the engines running. I suggest that he has never looked in our carpark. It seems to be that the only new cars there are the government cars.
I am totally amazed that the right honourable gentleman the Prime Minister left that particular Minister in place while he dismissed the noble Lord, Lord Clinton-Davis, and his Whip, the noble Lord, Lord Haskel, both of whom so courteously and ably dealt with this matter in this House. Clearly, the Minister of State in the other place does not understand this place in using the words that he did. Nor do I believe that he understood my amendment. It was a purely permissive amendment that gave the Secretary of State reserve powers to modify the application of the Act which would never be used unless the Secretary of State chose to do so.
I heard with interest what the noble and learned Lord, Lord Falconer, said a few moments ago, that bit by bit, sector by sector—I am not sure whether he said area by area—but whatever he said, the Bill would be eaten away. It certainly would not. Unless there was a need for the Secretary of State to implement any of these sections, he certainly would not need to do so and the powers my amendment gave could quietly remain in 1536 their pigeon hole gathering dust. Only the Secretary of State could decide to exercise the powers, and nobody could force him to do so.
However, what the amendment did wreck was the excuse that the Secretary of State could make if he was faced with an overwhelming case to modify the national minimum wage, the excuse that "Yes, you are quite right, but unfortunately I cannot help you because the law does not permit me to do so".
The amendment, I admit, would have wrecked the cosy pre-election deal with the unions that in return for their giving up Clause 4 and the power of their block vote within the Labour Party, and in return for not requiring the Government to repeal all the trade union legislation passed by the previous government, they would get the national minimum wage as a consolation prize.
I should like to remind your Lordships, as I have done on several occasions in the various stages—
§ Lord Davies of Coity
My Lords, the noble Baroness is not correct in her history. Policy within the TUC and the Labour Party to introduce a national minimum wage was in 1986. Certainly the question of Clause 4 did not come about within the Labour Party until 1994.
§ 4.45 p.m.
§ Baroness Miller of Hendon
My Lords, it may well be that the noble Lord has more knowledge of these matters than I have. If I have said something that is incorrect, of course I apologise for that.
All other countries which have a minimum wage also have exemptions of various sorts to cover various local circumstances. The Government have consistently claimed one essential reason for refusing various amendments. They said that the Bill was sufficiently flexible as it was. This clause gave the Secretary of State the greatest degree of flexibility possible. The Government's refusal of my constructive amendment shows a degree of obstinacy and inflexibility that defies description.
On the occasion of Second Reading I said:we … fully respect and honour by virtue of the Salisbury convention, the Government have a mandate for introducing … a minimum wage, however misconceived we believe the idea to be. We are, however, entitled to invite the Government to think again on some of the details".—[Official Report, 23/3/98; col. 1035.]Well, we have invited the Government to think again on just one detail and they have adamantly refused to do so. Only yesterday I appealed to the new Secretary of State to think again, but I have received only a stony silence.
Your Lordships have the power to refuse to accept the Commons' rejection of our amendment, which would considerably delay the passage of this Bill. But I will certainly not invite you to do so. I would not do so over this particular issue; an issue where the Government, I believe, are making a grave mistake which I have no doubt they will come to regret at a later date. Certainly, I hope that I am wrong. I hope that young people in certain occupations or in certain parts of the country do not suffer and do not feel the pinch as the recession, 1537 which is undoubtedly coming, starts to hit home. I believe that is a mistake which will eventually force the Government to come back to Parliament with fresh primary legislation wasting valuable parliamentary time.
No, this is a case where most definitely we should allow an intransigent Government to stew in their own juice. I therefore advise your Lordships that we should, with every degree of reluctance, accept the decision of the other place.
§ Lord Razzall
My Lords, as your Lordships are aware, from these Benches we have taken a completely different approach to this Bill from the approach that has been taken by the noble Baroness, Lady Miller. We have consistently argued in support of the Government's position that the era of sweatshop wage rates should be over for ever. We support completely the principle of the minimum wage. It was in the Liberal Democrat manifesto in the same way as it was in the Labour Party manifesto at the last election.
The only area where we have parted company with the Government has been the area touched on by this amendment. We believe that the Government should enshrine permanently into the legislative structure the permanent status of the Low Pay Commission. We believe that the recommendations of the Low Pay Commission should in future years be virtually automatically accepted by the Government and that the Secretary of State should have the power by way of regulation to bring in its recommendations without having to go back to primary legislation.
That is where we have parted company with the Government. The Government's position has consistently been that they are in favour of one national minimum wage rate; that should apply to the whole country and if at any future stage there should be any variation of that, a government should need to come back to Parliament with primary legislation to change it.
We have argued consistently in the other place and here that the Government should have the power to look in the future at regional variation. We accept that the first rate will be on a consistent basis throughout the country. We accept that the report of the Low Pay Commission, when it touched on regional variation, did not make the case for regional variation. However, we think that when we get to future years, into the millennium, it may well be that the changing economic circumstances of this country, in particular following our entry into European monetary union, may require the Government to look again at that issue.
However, I am somewhat surprised by the arguments that were used yesterday in the other place against the Liberal Democrats. I have no knowledge of whether I am the descendant of a thief or a robber baron, as was suggested by the Minister in the other place. Whether I am or not, I know that it is not the basis of my attendance in your Lordships' House. I certainly did not arrive in a Ferrari or a Mercedes in order to vote on the amendment and I have never been regarded as naïve.
However, the fundamental point made by the Minister in the other place, and which I find difficult to cope with, is that the substantive reason why the Government 1538 are not prepared to accept the amendment—which, after all, only empowers a Secretary of State to take action and is not prescriptive—is that there appears to be a naïve belief on the part of the Government that at some future stage we shall have another Conservative government. They do not trust a future Secretary of State in a Conservative government not to emasculate the national minimum wage by the operation of this clause. That is where I part company with the Government. It is beyond my credibility that in my lifetime there will be another Conservative government. Therefore, I find naïve the Government's reluctance to agree the clause because of the fear of the power they might put into the hands of the noble Baroness when she becomes Secretary of State for Trade and Industry. However, having shared that view I shall not press the matter.
§ Lord Falconer of Thoroton
My Lords, I am grateful to the noble Baroness for her kind words of congratulations. Perhaps I may pay a genuinely felt personal tribute to my noble friends Lord Clinton-Davis and Lord Haskel for their considerable part in piloting the Bill through this House. I thank them for the great personal kindness that they have shown to me in guiding me on this complicated issue. The Bill owes its passage through this House much more to them than to me.
I shall not reiterate the arguments that have been put forward on many occasions as to why we object to this amendment. I say simply that we have made it clear that, save in relation to the limited circumstances put forward by the Government in their Bill, we do not believe in anything other than a national minimum wage. This amendment would permit such a principle to be breached and breached repeatedly. Moreover, it would give any other government a power to destroy the national minimum wage by a thousand cuts. We therefore believe that it is not right as a matter of principle and it goes against what we set out in our manifesto. I ask the House not to insist on their amendment to which the Commons have disagreed.
§ On Question, Motion agreed to.