Wages Councils (Hansard, 31 March 1983)

§ Mr. Michael Alison

Since 1979, there has been correspondence with the chairmen of the retail wages councils on two occasions. Texts of the correspondence are as follows.

General letters to all members of all wages councils about retrospective awards and the young workers scheme were sent in October 1980 and August 1981, respectively. A general letter about councils' proposals was sent to all members of both retail councils in February 1982. Letters about enforcement of wages orders have also been received from the secretary or chairmen of several councils.

(a) Text of letters of 29 July 1980 about small shopkeepers: (sent to Chairmen of both councils) As the Minister responsible for the administration of the Wages Councils Act 1979 I am writing to seek the views and the assistance of the Council on a matter which is frequently put to me in criticism of the operation of the wages council system. This concerns the position of the very small shopkeeper and the part-time workers he employs. It has been represented to me that the Council's awards are not designed with these people's needs sufficiently in mind and that the effect is to reduce opportunities for employment, especially, for young people and for women. I am sure the Council would be anxious to maximise employment opportunities in present economic circumstances. The typical case represented to me is the shopkeeper whose establishment is situated away from the competitive labour market of the High Street and who employs at most only a small handful of workers, usually female, who would not find employment elsewhere because they are only available for work close to their homes or for limited and often specific hours. The increases in wage rates agreed by the Council are, it is suggested, forcing many such employers to reduce the number of jobs they would otherwise be able to provide. And it is argued that such employees are themselves less concerned with earning the hourly equivalent of full-time workers than with having the opportunity of a job and retaining an earnings capacity. I have no doubt that the Council has considered this difficult issue and I would welcome the Council's views on the extent of the problem and whether any special provision could be made which might go some way towards meeting it, particularly in view of the present levels of unemployment. If, as I hope, you will seek the views of the Council at an early occasion, you might think it would be helpful if one of my officials attended to explain the problems further as they have been represented to me. We have a common interest in seeking to respond to criticisms of the operation of wages councils since I am firmly committed to the principle of wages councils. I look forward to the Council's advice as soon as possible.

(b) Text of reply to (a) dated 20 November 1980 from the Chairman of the Retail Trades (Non-Food) Wages Council: At its meeting on 14 November 1980 the Retail Trades (Non-Food) Wages Council (Great Britain) considered your letter of 22 August to the Chairman, Mr. R. S. Sim, in which you refer 242W to the problem of very small shopkeepers and the workers they employ. I was asked to convey to you members' thanks for your offer to send a representative to discuss the situation, which was however not taken up as some members had had the opportunity of hearing Mr. J. S. Brownsort on 7 October when he addressed the Retail Food and Allied Trades Wages Council (Great Britain) and were able to impart to other members the gist of what he had said. Members of both sides expressed their concern about the problems to which you referred, but were not able to arrive at any practical and equitable solutions. They have asked me to say therefore that they would be most interested to know of arty such solutions that you are able to suggest.

(c) Text of reply to (a) dated 20 January 1981 from the Chairman of the Retail Food and Allied Trades Wages Council: You wrote to me at the end of July regarding the functioning of Wages Councils with particular reference to the possible impact of Wages Councils Orders on the very small employer. I, in turn, asked Miss Simmons to place your letter on the agenda of the next meeting of the Retail Food Council which duly met on 7 October 1980. At that meeting Mr. Brownsort addressed the Council and answered a number of questios from members of the Council. Unfortunately I was unable to be present at this meeting. However I understand that despite a broad measure of sympathy with your objectives the Council was unable to agree on an answer which was acceptable to both sides. At the next meeting of the Council on 10 and 11 November 1980 I raised the question again but was unable to achieve any degree of consensus between the two sides. I am, accordingly, writing to inform you of the situation which can be put quite simply; i.e. whilst expressing a measure of sympathy with your aims, the two sides of the Retail Food Council find it impossible to agree on methods of achieving these objectives which would not be injurious to their respective aspirations.

(d) Text of letters of 25 February 1983 to the chairmen of both retail wages councils: I understand that your Council will be meeting soon to consider representations about the proposals which have been issued for increases in minimum rates from April 1983. I have received many letters from small and large businesses alike about these proposals. It is abundantly clear that, if not modified, the proposals will have damaging effects on employment in the retailing industry. I trust you will give the most serious consideration to the representations on this point that you will no doubt receive. Should the Council ignore the representations and confirm the proposed increases I would be driven to conclude either that the Council does not recognise any links between wages and jobs, or that it does not see it as part of its responsibilities to take this clear connection into acount when making proposals about minimum wage rates. In that event I would be glad to know which view the Council takes. I am asking the Secretary of the Council to circulate this letter to all members.

(e) Text of reply to (d) dated 11 March 1983 from the Secretary of the Retail Trades (Non-Food) Wages Council: I have been asked by Mr. Sim to thank you for your letter of 25 February in which you referred to the proposals recently published in NF 11 and to say, on behalf of the Council, that your letter was considered by the Council together with other representations at its meeting on Thursday 10 March.

(f) Text of reply to (d) dated 24 March 1983 from the Secretary of the Retail Food and Allied Trades Wages Council: I have been asked by Mr. Monaghan to thank you for your letter of 25 February in which you referred to the proposals recently published in RF(12) and to say, on behalf of the Council, that your letter was considered by the Council together with other representations at its meeting on Tuesday 22 March.