HC Deb 07 July 1998 vol 315 c435W
Mr. Peter Bottomley

To ask the Chancellor of the Exchequer if he will estimate how many people in (i) the constituency of Worthing, West, (ii) the borough of Worthing, (iii) the district of Arun, (iv) West Sussex, (v) England, (vi) Wales, (vii) Scotland, (viii) Northern Ireland and (ix) the United Kingdom earn less than the proposed national minimum wage, broken down by(a) gender, (b) age and (c) full or part-time employment. [48687]

Mrs. Liddell

The information requested falls within the responsibility of the Chief Executive of the Office for National Statistics. I have asked him to reply.

Letter from Tim Holt to Mr. Peter Bottomley, dated 7 July 1998: As Director of the Office for National Statistics (ONS), I have been asked to reply to your parliamentary question on earnings. The national minimum wage (NMW) will become effective in April 1999 and has been set at £3.60 for those aged over 21. A development rate of £300 per hour will apply for workers aged 18 to 21. The proposals also include a provision for a rate of £3.20 which will apply to those over 21 years receiving accredited training during the first six months of a new job with a new employer, but we are unable to provide data on this. Workers aged 16 and 17 and all those on formal apprenticeships will be exempt. The Low Pay Commission, in arriving at their recommendations, had to adjust 1999 pay rates to 1997 values. Their methodology produces £3.40 and £2.80 as the 1997 values of the government's preferred rates and I have provided supplementary data for these levels. The attached tables present adjusted New Earnings Survey (NES) and Labour Force Survey (LFS) data for the number of employees earning less than the proposed NMW rates. I will arrange for a copy of the tables to be placed in the House of Commons Library. These estimates are based on our preferred method for assessing the coverage of the proposed NMW. This method adjusts for the fact that the NES is based on a one percent sample of employees in the PAYE system and is therefore likely to under-represent relatively low paid staff, earning below the tax-threshold, and in particular those who work part-time. It is not possible to use this method for small areas and where necessary data solely from the NES have been provided. The extent of the bias in the NES data may be estimated for the South East by using the adjusted NES and LFS data. This suggests that the estimate of the overall proportion of employees aged over 21 years earning below £3.60 could understate the true position by as much as 3 percentage points. However, it is unlikely that the occurrence of lower paid jobs is uniform across the region, and so it would be wise to treat this figure as broadly indicative rather than a precise estimate.