§ Mr. RuaneTo ask the Chancellor of the Exchequer how many workers were being paid less than £3.70 per hour in real terms in each of the last 20 years. [141681]
770W
§ Miss Melanie Johnson[holding answer 11 February 2001]: The information requested falls within the responsibility of the National Statistician. I have asked him to reply.
Letter from Len Cook to Mr. Chris Ruane, dated 28 February 2001:
As National Statistician I have been asked to reply to your question about the number of workers being paid less than £3.70 per hour in real terms in the past 20 years (141681).The Office for National Statistics (ONS) has published estimates of the number of jobs paid at less than specific hourly low pay thresholds, in 10p bands, for all workers in the United Kingdom for 1998, 1999 and 2000. These estimates are based on an improved methodology using data from the New Earnings Survey (NES) and Labour Force Survey (LFS). This methodology provides the best estimates for the number of jobs in the UK paid below low hourly rate thresholds.The equivalent value of £3.70 in real terms has been calculated, using the all items Retail Price Index, as £3.50 for April 1998 and £3.60 for April 1999 to the nearest 10p pay band. The table below gives the number of jobs for workers aged 22 and over paid at less than £3.50, £3.60 and £3.70 for 1998, 1999 and 2000.
Table 1: Number of jobs in the United Kingdom for workers aged 22 and over paid at less than £3.50, £3.60 and £3.70 per hour Number of jobs (thousands) Hourly paid less than Spring 1998 Spring 1999 Spring 2000 £3.50 1,150 430 180 £3.60 1,400 540 250 £3.70 1.640 1,290 850 This improved methodology cannot be used to produce estimates before spring 1998 because it makes use of an LFS variable that is not available for earlier years. The introduction of the National Minimum Wage (NMW) has changed the distribution of pay rates across the lower pay bands. The NMW was introduced in April 1999 with an adult rate for workers aged 22 and over of £3.60 per hour. The rate was increased to £3.70 per hour in October 2000. The impact of this increase is not reflected in figures for spring 2000 as they relate to an earlier period.The estimates cannot be used as a measure of non-compliance with the NMW legislation because it is not possible from either the LFS or the NES to identify whether an individual is eligible for NMW rates. For example, it is not possible to identify people such as apprentices, those undergoing accredited training or those with accommodation supplied who are exempt from the NMW or are entitled to lower rates.