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National Minimum Wage

Volume 301: debated on Thursday 27 November 1997

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1.

If he will estimate at what level of national minimum wage the current departmental spending limits would be breached. [16595]

The level of the minimum wage has not yet, of course, been set. The hon. Gentleman will be aware that the National Minimum Wage Bill received its First Reading today. The level of the national minimum wage will not be decided until the Government have the benefit of advice from the Low Pay Commission, which has already started work.

I am grateful to the Chief Secretary for that answer. I am slightly surprised, however, that his officials have not been carrying out any studies of the impact of a minimum wage at different levels on the Government's spending targets. Will the right hon. Gentleman give a categorical assurance to the House that, if the level of a minimum wage, when it is set, has any impact on the wages bill of the national health service, patient care will not suffer and the Government will make up any shortfall?

It is a bit rich for Opposition Members to lecture us on patient care after their record for 18 years— [Interruption.]The hon. Gentleman does not like being reminded of what the Tories did to the NHS. The minimum wage will be set at a sensible level that is manageable, and we shall keep the promises to the health service that we made during the general election campaign. We are ready to be judged by that at the next election.

Are not the arguments against a minimum wage at a decent level, as put by Tories in business, exactly the same as the arguments advanced by the same people in the 1970s against equal pay for women, being based on the premise that a minimum wage will lose jobs? Just as equal pay for women did not lose jobs but did more to raise the living standards of working-class women than any other act of the Labour Government, will not the minimum wage have the same effect?

My hon. Friend is right. The Conservative party has always been against any economic or social progress. We were told that equal pay would spell the end of British industry, and the Tories say exactly the same about a national minimum wage. We believe that a national minimum wage is right in principle and that it will be good for the economy.

Is the Chief Secretary suggesting that it is possible that a minimum wage level, when set, will be at such a low level that it can have no impact on budgets or cash limits in the health service and other public services?

As I told the hon. Member for West Chelmsford (Mr. Burns), the Government will decide the level at which the national minimum wage will be set when they receive the benefit of the advice and evidence of the Low Pay Commission.

Is it not increasingly obvious that the public support the policy of a national minimum wage and oppose poverty pay, whether in the public or the private sector? They believe that the implementation of such a policy is long overdue. They obviously welcome the policy announced earlier this week by my right hon. Friend the Chancellor of the Exchequer, and believe that it will prevent those who go into work from losing out as a result of the present conflict between benefits and tax. It is a good policy, and it is overwhelmingly welcomed by the people.

I am grateful to my hon. Friend for his support. He is right to say that it is the Government's strategy to ensure that as many people as possible are encouraged to go into work. To that end, we want to remove some of the barriers that face people coming off benefit and going into work. Our strategy is geared to achieve that. As for the minimum wage, many people will wonder why the previous Government put up with a situation in which some employers paid wages so low that their employees were being subsidised by decent employers and by the public purse. That is an intolerable situation and one that we are determined to end.