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Lord Monkswell: My Lords, is the noble Baroness aware of the edict in the Companion that points out that short points and questions about what is contained in the Statement is all that is allowed when a Statement has been made? We seem to be having a tirade of prepared points of view which have almost no relationship whatever to the Statement.
Is it not true that the leaks from Cabinet about the disagreement between the Treasury and the DTI are because the Chancellor wants a rate which will be less inflationary and which will lose fewer jobs? I commend him for that. Does that not look as though at least he agreed with our objections that it would have been inflationary and would cause the loss of jobs? If the recommendation of the Low Pay Commission was not to be accepted, why did the Chancellor not set the rate himself? Is it because, like the matter of interest rate rises being hived off to the Bank of England, this Government wish to hive off their responsibilities to make unpleasant decisions to someone else so that they can say, "not my fault, guv", or in this case, "not my fault, comrades"?
Lord Razzall: My Lords, I share the noble Baroness's welcome for the Statement. That is the only thing that she said with which I agree. When the Minister responds, I should be grateful if he would correct a point which he made at the end of the Statement when he indicated that the Opposition were against the proposals put forward. I hope that he will make it clear that he was looking opposite him and not obliquely to the Liberal Democrats, because, as he well knows, we stand four-square behind the Government in this regard. We believe that the slave rate wages which have been paid in many sectors of British industry are a scandal. That matter should have been rectified long ago and we entirely support the Government's determination to do that.
I admire the noble Baroness's ability, from a half hour study of the Statement, to produce 43, or perhaps 45, detailed questions on it. In fact, we should admire her skill in turning the speech which she and her colleagues made both on Second Reading and in Committee into that many questions. Of course, we have heard it all before.
The first point I make is that from reading the report, it is clear that the basic minimum wage has been fixed at a point at which the maximum advantage will accrue to the lowly paid with the least effect on jobs. When people have an opportunity to look at the detailed report, they will see that it demonstrates quite clearly that anything over £3.60 or £3.70 per hour starts to have a more significant effect on jobs than the recommended rate. It is demonstrated in the summary of recommendations at paragraph 23 that at the proposed level the national minimum wage will increase the nation's wage bill by a little over 0.5 per cent.
Our party does not wish to be critical of the Government in accepting that fundamental recommendation. Clearly, from what we read in the papers, we understand that there is significant opposition to the rate from sectors of the trade union movement. I await to hear with interest whether the Minister is prepared to comment on that. But having read the report, that seems to be a sensible figure for the Low Pay Commission to have recommended and for the Government to have adopted.
Clearly the significant issue that we ought to spend a little time on and ask the Minister to comment upon is the question of young workers. During the course of studying the Bill in this House, we considered long and hard whether the appropriate cut-off point was 26 years of age, which was the original suggestion by the Government, 21, 18 or indeed 16 years of age. Although there is disagreement between the Low Pay Commission and the Government, we are now moving towards an acceptance on the government side of a two-tier rate. But now is not the time to go into that aspect of the debate. However, when looking at the overall impact of not having the standard minimum rate for all young people, it would be worth while if the Government were to indicate whether they have looked into, and costed, the issue of housing benefit as regards not paying young people the full rate. I assume that that is a relevant factor for the Chancellor of the Exchequer in making his recommendations.
Perhaps I may now indicate where we part company with the Government. Rarely do I want to take a point that the Conservatives have taken because they often have a tendency to look at form rather than substance. However, I have two concerns about the way the Bill and these proposals have been dealt with. First, we have seen a most extraordinary series of events through newspaper reports relating to the fact that the rate and the proposals have been well known for at least a month, despite the fact that there has been no government statement to that effect. It is well known and has been well reported that there is a significant row in the Government over whether the recommendation of the Low Pay Commission should or should not be accepted. Secondly, having at last had the Statement, we find, contrary to every expectation held since the Low Pay Commission was established, that the Government are now saying that they basically agree with the proposals of the commission except in one very critical area where they have decided they will not adopt the recommendation. That is obviously significant.
We know that the Treasury normally likes to control all pay, but this is a classic example of the Treasury trying to pay the dog and bark itself. No one who has been involved in the proceedings on the Bill would ever have expected the Government simply to take the very detailed work of the Low Pay Commission and say, "We like that aspect of it. We like it overall, but we don't particularly want to accept one very key recommendation".
I do not want to say anything further at this stage on that point. However, it leads me to my final point. As the Minister will know, we argued strongly during the course of the Bill for the need to give the Low Pay Commission a much more permanent status. Quite honestly, we have been somewhat surprised in our discussions with the Government and in the debate which has ensued as to why they have not been prepared to make such a commitment. Can the Minister confirm that when we come to review the progress of the National Minimum Wage Bill we will now enshrine into the legislation the permanent status of the Low Pay Commission? There is a clear recommendation in the report that it would like to review exactly what is happening in two years' time. There is a demand in the context of the debate that has followed that that should happen. Otherwise, we are fearful that the sort of rather unseemly political row which has featured in our newspaper reports over the past few weeks will happen every year or every two years when such recommendations are put forward again.
I should like to press the Minister on that point. Is it now quite categoric that the Government will give permanent status to the Low Pay Commission and, dare I say it, in future, unlike this time, adopt its recommendations?
I turn, first, to the allegation of leaks, which I do not believe is of dramatic importance. To say the least, it is a little irksome for this Government to be lectured about leaks when, in the case of the previous government, it seemed to me that theirs was the only vessel in the world to leak from the top. There has been much speculation in press reports and in the media in that respect; indeed, I do not deny that fact. But four weeks from receipt of a document dealing with an innovative policy is not a very long time for the Government to take to consider all the implications involved. Of course discussions take place in Cabinet where different points of view are expressed. I thought that had also happened in previous governments, but perhaps I was wrong. It is possible that they were all in unison about the disaster that they were imposing upon us.
I turn now to the dire effects of this as suggested by the noble Baroness. I accept the noble Baroness has not yet had time to read the report, but when she does so she will see that they are expressly refuted by the Low Pay Commission. The commission considered in great detail a vast amount of evidence to which I have already referred. As regards the terribly serious impact on small businesses, job losses and all the other adverse speculations in which the noble Baroness indulged, I should point out to the House that the report of the Low Pay Commission has not confirmed any such prospects. I respectfully suggest that the commission considered the matter in rather more detail than the noble Baroness, the shadow Secretary of State or, indeed, the Conservative Party has done. No one has conducted an assessment of the position in such detail. Therefore, to predict all these dire effects is to dramatise the whole situation out of all proportion for a rather simple party political point.
We also had the allegation that there was pressure from the Treasury and the DTI to interfere with the conclusions of the Low Pay Commission. There is not a shred of evidence to suggest that; indeed, I vehemently deny it. The House would be here until next Christmas if I were to attempt to reply to all the points raised by the noble Baroness. It is as well to have all that on the record, but it could all be significantly reduced to one sentence: the Tory Party does not accept the minimum wage. All the rest is verbiage.
The noble Baroness referred to the fact that there was no representative of small businesses on the commission. That reflects a complete misunderstanding of the nature of the Low Pay Commission: there were no representatives of any interests. Those concerned were there because they are people with expertise covering a very wide field. Therefore, they contributed
My noble friend Lord Haskel was brought to book, but I could not quite understand why. He is sitting here calmly and is not in the least upset by the attack upon him. I understand that the matter he dealt with did not concern wages but rather investment. He does not accept the view that--
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