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Clauses 2, 3 and 4 of the Bill provide no distinction in the minimum wage on the grounds of different areas, different sectors of employment, undertakings of different sizes, or different occupations for those aged over 26. I accept the broad principle. However, while I understand the reasons and thinking behind the propositions in Clauses 3 and 4, I wish to offer two caveats. First, I am puzzled by the reference to the age of 26. I am not sure why that age has been plucked out. In all the industries in which I have worked, the general ruling was that once that person had reached 21--in other words he or she was recognised as an adult--he or she then received the full rate for the job. Those below the age of 21 received a lesser amount. Secondly, if there were a differential at age 26, is there not a danger that some employers would be more inclined to employ those aged under 26 because they were cheaper than those just over 26 because they were more expensive? Can my noble friend give an undertaking that, if regulations are brought in under Clauses 3 and 4, they will be brought before Parliament for debate and a vote on whatever proposition the Secretary of State brings forward?
I congratulate my right honourable friend the President of the Board of Trade upon establishing the Low Pay Commission within a short period of taking office. It has been vitally important for the commission to be able to take evidence, and to start to do the necessary groundwork at this early stage. The commission will consider all the necessary factors, including the concerns of small businesses, and will produce a fair and justifiable minimum wage. While I understand employers' anxiety that the minimum wage should not be too high, I hope that they will understand our concerns that the minimum wage should not be too low. We shall be looking for a fair and adequate balance.
I strongly support the minimum wage enforcement clauses. As we have seen in so many other fields, it would be pointless to have minimum wage legislation if we have no means of enforcing it against the, it is to be hoped, very few cowboy employers who will undoubtedly do their utmost to get round the legislation. I believe that it is a fair, just and long overdue Bill. It will bring material benefits to millions of British people. There are almost 1 million people in full-time employment in Great Britain today, most of them with families, who earn less than £2.50 per hour. Many are mothers with children. Many are from ethnic minorities. All would benefit greatly from this legislation. I am proud that a Labour Government should at an early stage have introduced this Bill to combat poverty. I strongly support it.
Lord Dixon-Smith: My Lords, I declare an interest as a practising farmer. As such, those parts of the Bill dealing with the agricultural wages aspect of the question might conceivably directly affect me. From what I have heard so far, I hope that my employees will be well clear of any provision introduced by the Bill.
However, declaring that interest gives me the opportunity to make two pertinent points. First, agriculture, like many other industries today, is an area of rapidly declining employment. There are a number of reasons for that, most of which do not have to do with either the beastliness of employers or indeed the dreadful environment in which most agricultural workers live. By and large, they are extremely fortunate in that regard.
However, there is one basic temptation, or pressure, depending on how one looks at it, which every employer, not just in agriculture, goes through; namely, the higher wages go, the easier it becomes to employ a machine to do the work. If we examine the consistent trend over the years in my industry, we see bigger, better and quicker machines, and more sophisticated systems, with fewer and fewer people required to do the work. The higher wages climb, the more intense that pressure is.
The other point, for what it is worth--and I shall slightly turn it round--is that agriculture is a basic industry, working with basic commodities. At the present time, because of the strength of the economy, as everybody in this Chamber will undoubtedly be aware, it is rather a depressed industry. In many parts of the country--in Wales, up in the hills, in Scotland, in the north west and parts of the West Country, there will be farmers who are already achieving what might be called negative income. It is not a very happy situation to be in. Anyone who is in that situation for long will find himself in considerable difficulties if he happens to have employees.
The thought occurs to me, slightly wickedly, that if we set the national minimum wage at something like £5 an hour and there is an immediate battle for a restoration of differentials and we let inflation rip, then the pound might be rapidly devalued and those farmers would probably find themselves once again with a positive income. However, I am sure that the rest of the country would suffer so much in bringing that about that we had perhaps better put that wishful thought aside.
In considering my remarks about the Bill, I had a passing fancy that perhaps we should cast Sessions of Parliament as Shakespearian plays. I could not help but think that perhaps "The Tempest" was appropriate for this current Session, with the new Government determined on immense activity and sweeping all before them. With that in mind, it becomes quite easy to "cast" the Budget debate and the Finance Bill that is to follow in the part of Prospero, with wonderful spells being cast which we all hope will be of general benefit to the country at large.
In the whirlpool of taxes and benefits surrounding people at the bottom of the wages pool, it is not always easy to determine precisely what is going on. I have tried to measure the intentions of the Bill against some of the points outlined by the Chancellor of the Exchequer in another place last week, and also in the context of views expressed in various places as to what the appropriate level of a minimum wage might be.
Assuming a 40-hour week, that is just over £2 an hour; noble Lords do not need me to tell them that. Of course, one has to consider that there may be part-time workers, but anyone who can earn £81 per week, say, in one day, is not likely to be considered to be low paid or at the bottom of the wages pool. Since I cannot accept that the Chancellor would waste his breath on the matter without some reason--still less do I believe that he might spin some irrelevant spell--I hope that the Minister in his reply will assure me that the Chancellor's remarks are pertinent in the light of the implications of the Bill. I assume, therefore--and I hope to be assured that it is so--that where the Secretary of State has power, under Clause 3, to create exemptions for those under 26 years, those exemptions will be made.
At col. 1105 of Hansard for 16th March in the other place, in discussing the change from family benefit to tax credit, a guarantee was given that work would pay and that for a family with a child and someone working full-time, income would be at least £180 per week. I assume that that sum is arrived at for some people by adding a tax credit to the wages paid. That is an interesting concept and I wish it well and hope that it works. But once again it suggests real wages at a level that may be well below some of the figures that have been suggested as appropriate for the minimum wage.
The reality is this. The Bill, with its flowing legal prose, creates a procedural mechanism to do a specific job. In itself, apart from the estimated cost of over £0.5 million, it is innocuous. The conclusion of the job, however, is highly significant. In other countries where minimum wages apply, the effects seem to vary depending on the conclusion that is reached as to what is appropriate. There appears to be a correlation between the level of the minimum wage and the level of unemployment.
In the United States where the level of the minimum wage is relatively low, unemployment is also low. On mainland Europe, however, where various national minimum wages are relatively higher, unemployment is correspondingly much higher, certainly at levels which we would not wish to see here ever again; in many places at levels we have never seen here--thank heavens! It is on that decision that I shall finally have to decide how I cast the Bill. I think we must all hope that I do not have to cast it as Caliban.
Lord Thomas of Macclesfield: My Lords, the question before us today is one of principle, a principle already accepted by many industrial countries of the world and by most European countries. So it was a particular disappointment to me today to hear the opening speech of the noble Baroness, Lady Miller of Hendon. We could have spared the toilers in Hansard because it was exactly the speech, the sentiments and facts brought out in the first Factories Act at the beginning of the last century, the second Factories Act and the third Factories Act. These were not the end of the world as was forecast at that time.
I was a proud member, with Lady Howe, of Opportunity 2000. I heard from women who had succeeded in industry that in their view often the biggest enemies of women prospering, going up the ladder and getting to the top, were other women. I find it ironic, therefore, since I always dismissed that as folklore, that the noble Baroness, Lady Miller, should speak against a national minimum wage when by far the greater beneficiaries will be women.
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