Previous Section Back to Table of Contents Lords Hansard Home Page


Lord Clinton-Davis: If two people employ someone to do a job simultaneously for them the position is clear; the person concerned should receive two wages, each underpinned by the minimum. It is inconceivable that in the circumstances described by the noble Baroness and the noble Lord, Lord Monson, a typist would have a worker's contract with all three. It does not happen that way.

We are dealing with hypothetical situations. In reality, when considering the legal liabilities of particular circumstances, one would have to examine the contractual relationship which exists. One could dream up all kinds of hypothetical situations which will not advance the interests of addressing the principle. The Bill reflects employment law, all of which assumes that a worker cannot have more than one employer in relation to one job. He or she can of course have two jobs at the same time, one in the morning and one in the afternoon, but cannot do them simultaneously.

Baroness Miller of Hendon: After that last remark, I am in a certain confusion. I would have thought--and the noble Lord, Lord Monson, made the point--that we could all join together and have a keep-fit class in the Royal Chamber. The question is whether each and every one of us would have to pay the minimum wage to the instructor for undertaking the same job at the same time. I have listened carefully to what the Minister said. Although I do not agree with him, I shall not press the matter to a Division tonight. We agreed not to do so because the Minister's colleagues were at a social gathering and it is not my intention to break such an agreement.

The Government need to look at the issue again and we wish to return to it. In no way does this simple amendment interfere with or alter any of the principles of the Bill. It clarifies the Bill and would get the Government out of certain trouble. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Miller of Hendon moved Amendment No. 3:


Page 1, line 14, at end insert (" or has reached the age of seventeen years, whichever is the later").

The noble Baroness said: In moving Amendment No. 3, I shall speak also to Amendments Nos. 4 and 5. Some parts of the Bill are defective because not all the effects of particular provisions have been fully considered. Clause 1(2)(c) is one such provision. As

11 Jun 1998 : Column 1211

drafted, the Bill provides for the start of an employee's entitlement to receive at least the national minimum wage to be when he or she reaches school-leaving age.

Perhaps I may say for the first time that, as the Minister knows, we on these Benches do not agree with the idea of a national minimum wage, although we certainly appreciate that it is a manifesto pledge. All we shall attempt to do is to make it a little easier and a little better for everyone to live with. I agree that if there has to be a national minimum wage there has to be a start-up date for it. However, basing it on something as flexible as the school-leaving age produces uncertainty and ambiguity.

The reason is simple. Within the United Kingdom there are three different school-leaving ages. England and Wales have a different age from Scotland, and Northern Ireland has yet a third. The differences are a matter of months, being based on how long after a child reaches his or her 16th birthday he or she is allowed to leave school. The details, even as set out in the normally helpful notes to the Bill, are extremely confusing. I have read them several times and, as the Minister will have done so, perhaps he can explain the differences. I found the matter extremely confusing, although in practically every other respect the notes on clauses were helpful·

No doubt they would be understood by an expert on education, which I certainly am not. But it is clear that children living within the four different areas will be able to leave school at ages different from others living in the same area. I agree that that problem cannot be avoided. However, as between the four areas, each using a different formula, there can be a difference of several months between the age at which a child is allowed to leave school. For example, as I understand the figures in the notes to the Bill, it means that a Scottish child may have to remain at school until he or she is about 16¾. According to this same note, in Northern Ireland a child may leave school in the same year as he or she attains the age of 16 on or before 1st July. Frankly, I am not sure what that means for Northern Irish children but it seems to me that a child born on 2nd July--which happens to be the birthday of one of my sons--would have to stay in school a whole year longer than one born on 1st July. If the proposed Scottish parliament has the power to do so, it could presumably alter the school leaving age north of the border to yet a different one, higher or lower, thus yet again introducing a different standard.

For the purpose of the present debate we do not have to concern ourselves with the precise effect of these arcane and convoluted regulations. It is sufficient to say that as between England and Wales on the one hand and Scotland on another hand and Northern Ireland on a third hand, children are treated differently. Using the term of art, "school-leaving age" means that distinctions will be made between children from different parts of the United Kingdom. That is, in effect, discrimination, not just on the grounds of age but also on the grounds of nationality. I believe that is totally unacceptable. I am amazed that the party opposite should continue to countenance it after it was drawn to their attention in the other place. But that is not the end of the anomaly.

11 Jun 1998 : Column 1212

In Committee in the other place, my honourable friend the Member for Daventry pointed out the situation of someone living on or close to the Scottish border; for example, in Berwick-on-Tweed. Would his entitlement to the national minimum wage depend on where he lived or where he took a job? Would a new school leaver from England be entitled to a different wage from a colleague working alongside him who lives in Scotland? That is not the end of the possible problems. What would happen if a young person from the EC came here from a country where, for example, the school leaving age is 18 or 15?

However, what I am addressing here is the differences in school-leaving ages between children living in different parts of the United Kingdom. The amendment we propose purely and simply provides a uniform base for all school-leavers irrespective of where they live or where they work. It is not designed to deprive them of any so-called benefit from an entitlement to a minimum wage, although I personally believe they will find themselves in severe competition with those still at school who are trying to secure the part-time and weekend jobs that so many young people are looking for.

The amendment removes the absurd geographical distinctions that I have drawn attention to. In the debate in the other place no satisfactory explanation was given by the Government for not agreeing to sort out this unnecessary problem. Now that they have time to reflect, I trust that they will agree to do so.

Before I speak to the next amendment I should like to mention a matter which comes back to our discussions much earlier on the Low Pay Commission. If rumour has it, and it is right, it may well be that young persons under 18 will not be entitled to the national minimum wage. Therefore, the whole of the argument which I have just proposed would be irrelevant. That is why I and my noble friend made the point that it is difficult for us to deal with all these matters in the dark because we do not actually know.

I turn to Amendment No. 4. This amendment does not seek to provide the facility to exploit with low wages senior citizens who have attained the age of 65 and who choose for whatever reason to remain at work full or part-time or even in some new occupation. I certainly would not wish to do that. I must declare an interest in that I will be joining that venerable group in just a few days' time, difficult as I find it to believe. Nevertheless, it is the truth.

The purpose of the amendment is to provide for the exclusion of those of pensionable age from what we believe may be the adverse effects of a national minimum wage. We believe that the effects of the Bill may be to harm many members of a particular group that the Government think it is intended to help. Elderly workers are indeed a vulnerable group. The same is true for those under the age of 26 where the Government have already taken permissive powers to make an exception. The amendment would not force pensioners to work for low wages; nor would the amendment to Clause 3, mirroring the exception for the under-26 year-olds.

11 Jun 1998 : Column 1213

The amendment recognises that they are a group who may have low productivity specifically related to their age or the lack of modern technological skills. I hasten to add that there will obviously be notable exceptions--myself included--who will continue to be able to work with undiminished vigour, as do many noble Lords in this House. Such persons should be allowed to price themselves into work if they choose to do so.

The Low Pay Commission should be empowered by the Secretary of State, after due consideration, to recommend a separate level of pay for pensioners. The Secretary of State has already given herself discretionary powers not to follow any recommendation of the commission if she chooses not to.

Pensioners are a large and growing proportion of our population. Out of 10 million pensioners in this country--almost 20 per cent. of the population--800,000 of them are economically active. Approximately 600,000 of those are employees. There was a dip in the number of employed pensioners during the economic downturn in the early 1990s. This emphatically proves the vulnerability of this group in times of economic and employment difficulty.

The Minister in the other place propounded the novel economic theory that higher wages result in higher employment. I shall not get into arguments about the reality of the so-called McCarthy curve. I am certainly not an economist but common sense makes it clear that some jobs will be lost if wages go up. Without special exemptions, jobs will be lost if wages are forced up. Those job losses will fall on the most marginal groups with the lowest productivity. At present, those liable to be low producers--those who want merely to work part-time and who may need more time off work for health, family or personal reasons--can price themselves back into the labour market by adjusting the price they charge for their labour.

Many of the over 65s are in possession of their state pension and occupational pensions. They may be happy to give a couple of hours a day for a nominal wage, possibly just to pass the time. They, as well as those who want to supplement their state pension, may make all the difference as to whether the village shop can stay open or have to close down. I well remember the example that my noble friend gave on Second Reading of such a case. They may be the means of enabling the local newsagent to continue with the delivery service and thus be able to compete with the big chains.

An unacceptable anomaly is created by the Government's refusal to exempt pensioners from the minimum wage. Pensioners do not pay employees' national insurance contributions. A pensioner will therefore be between 8 and 9 per cent. better off than a person below pensionable age doing the same work for the same wage. Is it not odd that a pensioner should have a higher take-home wage than his colleague working for the same employer? Similarly, in cases where an employer has a pension scheme, an employee over the age of 65 will not be able to join it. That will save the employer from making contributions, and also the employee, thus increasing his take-home pay still further.

11 Jun 1998 : Column 1214

The amendment will help to rescue from the margins of employment many of those who are currently unemployed solely on account of their age. The Government, albeit reluctantly, have given themselves flexibility to exempt the under-26 year-olds. I am at a complete loss to understand why they should be discriminating against older workers who are presumably old enough and wise enough to know whether it is worth their while taking a job or whether they are being exploited. The amendment seeks to end the inflexibility which has characterised the Government's approach to this Bill.

The last amendment in the group would exclude trainees on a recognised training programme from the national minimum wage. That is Amendment No. 5. There is a vast variety of training arrangements ranging from day release, instruction at the employee's place of work, study leave and so on. The Government have not only said that their priority is education, education and education, but in numerous policy statements and ministerial speeches, as well as those delivered before the election, they have stressed continually the need for a trained, skilled workforce. We entirely share that view.

What we find surprising in a party which also claims that it keeps its electoral promises is that it is placing a positive obstacle in the way of the unskilled improving their skills. It must be a disincentive, even to the most enthusiastic employer, not only to have to incur the disruption of giving a trainee time off work and/or to spend time giving him on-the-job-training but also to have to pay him a larger wage than his existing capabilities command.

The training of a new employee is not only an expense and a burden on the employer; it is a positive benefit to the employee and will later, one day, one hopes, result in enhanced earning capacity for the employee. In other words, paid training, albeit at a wage lower than the national minimum wage, is an investment being made by both sides. There must be a strong commitment to training on both sides and, indeed, by the unions as well. As my honourable friend the Member for Daventry pointed out in Committee in the other place, there are a number of cogent reasons why there should be an exemption in respect of trainees.

First, it is simply a matter of equity. There could be occasions when a skilled person and a trainee are working side by side. There is no reason why the skilled employee and the trainee should be subject to the same minimum wage. Of course, this is a matter of differentials which the party opposite fully understands.

But, secondly, there is the matter of incentives. Employers should be encouraged to provide training and the Government should be encouraged to live up to their rhetoric for training. Why should an employer take on a trainee with all the commitment that that entails when, for the same money, he may employ someone already possessing the necessary qualifications and experience? It must be economically better for an employer to take on someone who has already been trained, presumably at someone else's expense, rather than incur the commitment of training a raw recruit.

11 Jun 1998 : Column 1215

Then there is the matter of consistency. On the one hand, the Government are proposing, under their welfare to work scheme, to give employers incentives in the form of subsidies to take on new trainees. Yet here in this Bill they will impose disincentives by requiring those same employers to pay over the market rate for those same trainees.

In the other place on 28th July, the Secretary of State said:


    "The national minimum wage will be introduced sensibly and will take account of the needs of young trainees and not penalise occupational training activity".

It is not only the CBI which supports the idea of different rates of pay for trainees and escalating rates of pay as an incentive as that training progresses. The GMB also says that there is a case for a lower training rate. The TUC itself stated:


    "There is a case for trainees of any age to be entitled to a percentage of the full minimum wage while they attain the full level of competency required to undertake the full range of duties. However, this partial exemption must be properly regulated to prevent abuse".

We certainly agree with that.

We agree with the CBI, the GMB and the TUC on that point. We agree also with what the Secretary of State said in the other place. What is surprising is that the Government do not agree at least with the evidence of the unions and the TUC. What is even more surprising is that the Secretary of State no longer agrees with herself and what she said just 10 months ago. Why has she departed from her previous reasonable attitude and adopted the inflexible doctrine of universality?

There is then the aspect of ageism which I mentioned earlier. Why are the Government discriminating against older workers? They are giving themselves the option with no assurance at all that they will exercise it to provide exemptions for those under the age of 26. In view of the Secretary of State's apparent aversion to exemptions, I am by no means convinced that it is more than window dressing or that she will bring the provision into effect, at least in the foreseeable future. I say that because she could make it an immediate exemption, if she so wished, in the same way as share fishermen and the Armed Forces have already been exempted.

Be that as it may, older trainees need consideration as well and their potential employers need incentives. With many traditional jobs disappearing, the previous government encouraged retraining schemes. The mining and steel industries are cases in point. I do not suggest that the present Government are any less committed to the retraining of those who, for some reason or other, have become redundant--and what an ugly word "redundant" is. However, it is inconsistent and wrong for the Government to place that obstacle in their way simply for what appears to us to be nothing but the doctrinaire concept of universality. That doctrine is evidenced by the title that the Government have chosen to give the Bill; that is, the National Minimum Wage Bill.

11 Jun 1998 : Column 1216

In Committee in the other place, the Minister of State claimed that Clauses 3 and 4,


    "give the Government maximum flexibility to take into account the Low Pay Commission's recommendations".

With all due respect, they most certainly do not. Clauses 3(3) and 4(2) are hedged around with the most severe limitations. It so happens that I hope to assist the Government to simplify the whole matter with the amendment that I shall propose to Clause 2 later. Therefore, I shall not take up the time of the Committee any further at this stage.

The object of the amendment is to stop the Bill moving in the wrong direction by making it more difficult for employers to take on genuine trainees of whatever age. I beg to move.


Next Section Back to Table of Contents Lords Hansard Home Page