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Minimum Wage

Volume 927: debated on Tuesday 1 March 1977

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1.

asked the Secretary of State for Employment if he will communicate with the relevant interests with a view to introducing a national minimum wage; and if he will make a statement.

Since the Government took office, the most practical approach to the problem of low pay has been the special provision included in the TUC guidelines for negotiators. We have been glad to endorse these provisions and we are taking steps to improve enforcement of existing statutory minimum pay in wages council industries.

Is my hon. Friend aware that from time to time in the House there is criticism that some people are better off on social security than when they are working? Would he not agree that this is due not to the fact that the social security scales are too high but to the fact that many workers' wages are too low? Will he therefore take the initiative to ensure that a national minimum wage is fixed above the level of social security scales to correct this anomaly?

I think that there is widespread recognition of the problem to which my hon. Friend has referred. With respect to my hon. Friend, however, I suggest that perhaps the way he has proposed is not the right way to tackle it. Wages policy alone will not eliminate the problem; social security benefits and fiscal policies have their rĂ´le to play too.

Since the cost of raising a family is so much larger than the cost of a household with only one or two people, would it not be better to solve the problem of poverty in families where the breadwinner is in employment by raising family allowances?

I agree with the hon. Gentleman that blanket provision across the board, by its failure to discriminate, will not tackle the pockets of poverty which undeniably exist. It is better to have a discriminatory approach in the provision of social security benefits, perhaps supplemented by fiscal policies. The hon. Gentleman will recognise that social security benefit policies are not matters for me.

Can my hon. Friend say what additional and urgent steps are being taken to make sure that employers obey the law in respect of people who are subject to wages council orders?

The House will have seen the widespread publicity which has rightly been accorded to the blitzes, as they have been described, launched by my hon. Friend the Under-Secretary of State. These have exposed the extent of underpayment and have most beneficially concentrated the attention of those directly concerned on the need to comply with the statutory minima. My hon. Friend has now launched a series of talks with the TUC, the CBI and other interests to see how much further this can be carried out and made effective. In the meantime, proposals for further blitzes are, I understand, on the agenda.

Is it not a fact that if a national minimum wage was established at a high enough level to get over the problem that people with large families can in certain circumstances get a higher take-home income when they are out of work than when they are in work, the net effect of such a high minimum wage would be to destroy a large number of jobs?

I am not sure that I want to enter into a dialogue with the hon. Gentleman on that aspect. In countries where a national minimum wage has been introduced, there has been a speedy restoration of the differential that it set out to eliminate in the first place. An inter departmental committee was set up in the late 1960s to inquire into a national minimum wage and its possible effects. A report was published by the Department of Employment in 1969, and many of the areas which have been subject to questions are dealt with in that report. Perhaps we might usefully refresh our memories by looking at it again.