Draft National Minimum Wage Regulations 1999 (Amendment) Regulations 2002

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Mr. Hammond: I am listening with great interest to the hon. Gentleman. He might be aware that during the debates on the National Minimum Wage Bill and

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other Bills, Opposition Members sought to impose powers to require Secretaries of State to accept advice from bodies that they had set up. The Low Pay Commission is called an independent body but in fact it is a creature of the Secretary of State, appointed by the Secretary of State to do what is asked of it by the Secretary of State, who has the ability at the end of the process to ignore its advice.

Mr. Connarty: I do not know whether to weep or be sick at the idea that Conservatives can pretend that they have compassion for people in such situations. I do accept that the Government have made mistakes in the matter. They rule organisations in different ways. They treat some of the regulators as gods who must command them to do whatever they wish, but in other cases—such as the Low Pay Commission—they ignore them. I am disappointed at that. Nobody can tell me that suddenly the Conservative heart is beating for the working class. I do not believe it, and neither do the people of this country.

Mr. Hammond: Will the hon. Gentleman give way?

Mr. Connarty: I am going to move on to the rural economy. There is no doubt that the measure will be fundamental to many people involved in it. My hon. Friend the Member for Dumfries (Mr. Brown) has used several times the example of forestry workers in the borders—industrial workers cutting timber in dangerous and inclement conditions. They were earning £2 an hour until the minimum wage was introduced, then they were paid £3.60 an hour, and now they will be paid £4.20—a doubling of their wage. It is the same in many parts of rural Scotland, where people were paid extremely low wages. When I hear people pleading for regional differences, I wonder whether it is not the Conservatives who are once again claiming their rightful position and working on behalf of the landed classes, who use the excuse of regional disparities to pay rural workers poor wages. In reality, those in charge of the land and the industry want to keep as much for themselves as they can and to pay their workers as little as they can get away with. I think that the words that would echo throughout the rural economy would be ''exploited, exploited, exploited''.

I was leader of the council in Stirling district, which, at more than 800 square miles, is bigger than Luxembourg. People in the rural economy told me about their appalling wages, and the £4.20 an hour that the regulations will give them will be a massive increase. Do we not remember the £2 an hour and the £1.50 an hour that the Conservatives sometimes forced skilled men and women to take for their work as security guards? That was a product of the economy that the Conservatives created. People working in private sector care homes were paid £1.50 an hour. I live right beside a care home for people with learning difficulties, and the staff were paid £1.50 an hour before we introduced the minimum wage. The £4.20 an hour that we are giving them will be very welcome, although I believe that it should be more.

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Dr. Murrison: I was interested in the hon. Gentleman's thesis about the landed interest, particularly in connection with his reference to pay going up from £2 to £3.60 when the national minimum wage was introduced. I was wondering whether that landed interest was the Forestry Commission.

Mr. Connarty: I believe that Forestry Commission wages were not £2 an hour, although they were not £3.60 an hour either. It was not the Forestry Commission men, but mostly the private contractors working in the forests who made the killing.

The hon. Member for Runnymede and Weybridge mentioned the public sector, but I do not think that public sector organisations that were funded by local or national Government were allowed to pay less than £4 an hour even before the minimum wage came in. I know of no one who earned less than that in any local authority in the 10 years in which I was a council leader.

Mr. Hammond: The hon. Gentleman may be right, and I shall not dispute the point with him. However, much local government purchasing, particularly in the care sector, is done at arm's length. Many people who worked in care homes financed entirely by local authorities were paid at below those levels.

Mr. Connarty: I will return to the social care sector, although it is interesting that the hon. Gentleman mentions it. He is obviously letting his bosses know that he listened to last night's debate on care homes, even though it is not a Department of Trade and Industry issue.

It is interesting to see what happens when the Opposition are challenged on issues such as public authorities. Hansard will clearly show that the hon. Gentleman said that it was the public sector that paid below the minimum wage, but he could not substantiate that when challenged. That is often the way with the new—or what attempts to be the new—Conservative party.

The hon. Gentleman referred to the black economy, although I believe that the modern terminology is the ''grey economy''. The analysis that I have shows that London has the largest grey economy, and the London Development Agency has been trying to analyse its cost to London. Professor Tom Cannon, who was director of the business school at Stirling university and then director of Manchester business school, is working with Respect London and the LDA. He suggested that 600,000 people were working in London's grey economy, and, if we include dependants, we see that London is housing about 1 million people for whom it gets no Government support.

People in the grey economy in London are not working for the minimum wage or less. London's economy is so bloated and under pressure that they work for much higher rates than those in the regulations. None the less, they still work in the grey economy, where people can avoid tax. Companies will take someone on and let him work without paying tax

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because it suits them to do so. However, that is a matter for the regulatory and policing authorities; it is not a minimum wage issue.

I have no doubt that those who take on sweatshop workers throughout the country vote Tory in the hope of getting rid of this Government so that there will be no regulation and no support for workers. Workers are being exploited by people who probably support the Conservative philosophy of sweating labour. That has nothing do with the minimum wage, so let us not throw in that red herring.

Dr. Murrison: Will the hon. Gentleman give way?

Mr. Connarty: No, I shall continue. I have dealt with the public sector.

I turn to social care. The point being made was that the uprating might be damaging to employment levels, but the hon. Member for Runnymede and Weybridge accepted that the employment level is static in the care sector. In fact, there is money to be made in the care sector. The regulations that we have introduced are intended to make the accommodation worth living in, not to decrease the wages of those who work in the sector. It is only fair that they should get at least £4.20 an hour.

I have watched people working in the care home next to me. They work with adults who have learning difficulties and have come from institutions. Those carers work hard, are very caring and work very long hours because, even with the minimum wage, it is difficult to earn a decent amount of money on which to keep a family. They deserve no less than £4.20 an hour.

Mr. Mole: Does my hon. Friend agree that some care homes supply services entirely to individuals who are self-funded private payers and not dependent on the public at all, and that there is no significant difference between the wages paid to employers in that sector and those paid in homes with a mixed economy of private customers and local authority contracts?

Mr. Connarty: I believe that that analysis is correct, and I thank my hon. Friend for his intervention.

A substantial contribution is made to many people's care through the social security system—at least, that is the case in Scotland and I would be amazed if the situation were different in England and Wales. The cost is shared between the local authority, the individuals' funds, should they exist, and social security contributions.

I hope that no one is arguing that we should in some way allow the care sector to pay less than the minimum wage to its staff. That is what the Conservative spokesman seemed to be saying. The underlying thrust of his argument was that he did not want the minimum wage; he wants people to be able to make the worker take less whenever the financial institution or production unit decides that it is not making a large enough profit. All the major strikes in history, including the national strike, were caused when that happened. Employers in the coal industry attempted to make coal workers take less per hour than they had been getting up to that time.

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The hon. Member for Runnymede and Weybridge will also find from the history of America, which has a capitalist-based economy, that when the same attempt was made to deprive workers in the run-up to the Depression, it caused major unrest. We shall not return to those days, because our Government believe in underpinning people's rights and quality of life—even at the level of £4.20—and safeguarding people from poverty. When people cannot earn enough, our Government give them working families tax credit and other tax credits, and make decent contributions to families through child support. They do that because they do not believe that we should return to the position that the Conservatives might generate, if they should ever gain power again. The Conservatives want to create strife between those who work and those who make profits by investment of capital.

Although the uprating is small and I am disappointed that it is not larger, I shall support the regulations when we come to vote.

11.43 am

 
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