Skip to main content

South Africa: Minimum Wages

Volume 414: debated on Tuesday 11 November 1980

The text on this page has been created from Hansard archive content, it may contain typographical errors.

My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

The Question was as follows:

To ask Her Majesty's Government what action they propose to take to make sure that British firms in the Republic of South Africa conform to the British and EEC codes of conduct regarding minimum wages.

My Lords, the Government encourage British companies with interests in South Africa to report under the voluntary European code of conduct and to demonstrate that they are paying their black African employees not less than, at the very least, the minimum wages determined by the expert bodies producing subsistence data.

My Lords, the noble Lord said the Government "encourage" British companies. Would not the Government agree that the failure largely to apply these codes has been due to the fact that Governments have taken no action to implement them? Is it not the case that West Germany alone has even monitored the effectiveness of this code? Why do not the Government publish a list of the companies which are defaulting? I have a list of 10 prominent companies. Is it not unfair to those who do carry out the code that they should not be mentioned?

My Lords, the reason why we do not publish the list is because, as my right honourable friend the Secretary of State for Trade said in another place on 27th June, to produce any list of companies which are paying employees below the lower datum level is impossible without introducing subjective judgments or uncertainties in interpretation.

My Lords, would the Minister not agree that the very comprehensive work carried out by the Confederation of British Industries with regard to all its member firms which have subsidiaries in the republic merits a high tribute? Is it not a fact that British firms, of all alien firms which have subsidiaries in the republic, have done more about raising wages than have firms in any other country? Furthermore, is the Minister aware that the business notes of Barclays Bank, which must be authoritative, show that over the past 10 years the advance in wages for blacks has been continuous on the basis of nearly 16 per cent. per annum, whereas that for whites has been only 10 per cent. per annum?

My Lords, it is perhaps worth saying that British companies operating in South Africa have a not unsatisfactory record. The Department of Trade's summary of reports made under the codes by companies for the 12 months ended 30th June 1979 showed that only 2 per cent. of the black African workforce in British companies had been paid wages below the lower level of the subsistence data used. We very much hope that the next summary, which will be available before long, will reveal that the percentage is even smaller, or perhaps has even been eliminated.

My Lords, is the noble Lord aware that we give great credit to those companies which have done well in this respect? Is he further aware that it was the Labour Government who took the initiative over this and over bringing the EEC into it? Furthermore, is he aware that we should like the noble Lord to lend more strength to his elbow in obtaining perhaps more factual accounts—as, indeed, the German Government do?

My Lords, the next report will relate to the l2 months ended 30th June, 1980. I cannot say when that will be available, but I hope it will be before too long. However, I could perhaps help the noble Baroness by saying that up to the end of last month the Department of Trade had received 107 reports from category "A" companies—that is from British companies having 50 per cent. or more of the equity in a South African company employing 20 or more black workers—and 29 reports from companies having a less detailed responsibility.

My Lords, may I ask the Minister to consider two practical proposals to bring pressure upon companies which are continuing to pay wages under a living standard. First, could there not be a public inquiry, to which companies should be summoned, asking them to justify their conduct? Secondly, would it not be possible to stop investment in these companies, as proposed by the British Council of Churches?

My Lords, I am afraid that what the noble Lord proposes would produce a number of serious difficulties, but on the general point of taking power to enforce the code it is worth saying that delicate socio-economic matters of this kind do not readily lend themselves to legal regulation. There are serious difficulties about definitions—for example, of what is a subsistence wage in a particular place. Indeed, to import into the code sanctions for non-compliance would, apart from any other consideration, require the consent of all our partners in the Community.