§ 2. Mr. Robert Hughes
asked the Secretary of State for Employment what representations he has now received in response to the consultative paper on wages councils.
§ 4. Mr. Thurnham
asked the Secretary of State for Employment what recent representations he has had about the possible abolition of wages councils.
§ The Secretary of State for Employment (Mr. Tom King)
I have received a number of representations this year on the future of the wages councils system, the majority advocating either abolition or major reform.
§ Mr. Hughes
Has the Secretary of State seen the survey published yesterday in Manchester, which shows that 43 per cent. of companies visited by wages inspectors were illegally underpaying some or all of their workers? Does the right hon. Gentleman recollect the statement by Winston Churchill when wages councils were first set up, pointing out the benefits of a wages protection system, and saying:without such a system the good employer would be undercut by the bad and the bad employer would be undercut by the worst"?Does not that statement still hold good today? In view of the evidence about the need to strengthen wages councils, will the Secretary of State therefore abandon all plans to abolish them?
§ Mr. Thurnham
Does my right hon. Friend agree that when people are put out of work by the activities of wages councils, that is difficult to defend?
§ Mr. King
There is evidence of jobs being lost through the operation of wages councils, but the other important point is that is it generally agreed that the abolition of wages councils could lead to the creation of a significant number of jobs. That is the advice of the economic adviser to the Leader of the Opposition. He puts a lower figure on it than some, but concedes that it is likely to lead to more jobs.
§ Mr. Meadowcroft
Are not the conditions for the low paid even more difficult now than they were 70 years ago when the regulations were first introduced? Surely, where there is a large amount of unemployment, the pressures on people at the lower end of the market will be ever more difficult to cope with. Is it not important to maintain some protection to make sure that people are not exploited by the high amount of unemployment?
§ Mr. Colvin
Does my right hon. Friend agree that it could be most unwise to abolish wages councils if the unemployed could draw more money on the dole than they were likely to earn if pay were deregulated? Will he therefore give an undertaking to the House, before abolishing wages councils, that he will do something about the so-called "Why work?" syndrome, which at the moment detracts discourages people from trying to earn low pay?
§ Mr. King
I accept my hon. Friend's point that in certain circumstances the present system acts as a disincentive to employment. It is precisely for that reason that we sought, for example, to tackle the problem of national insurance contributions and make changes in that respect, as well as in tax thresholds, which can help in those areas. However, my hon. Friend will know that that is one other illustration of the way in which the circumstances are substantially different from what they were in 1909.
§ Mr. Leighton
As the Secretary of State knows, his Department has commissioned some major research from a group of Cambridge economists and researchers. One of its main conclusions was that the wages councils had had no significant effect on employment. Why has the Department not published that major report? When will it be published to inform the present public debate?
§ Mr. Brandon-Bravo
In considering this most important matter, will my right hon. Friend pay particular attention to redefining the term "adult skill", to open up the market to young adults?
§ Mr. King
I understand my hon. Friend's point. One of the distinctions that is it interesting to draw is between the more simple form in which the wages councils were set up under the initial concept and the more complex way in which they are formed now. That is one of the many reasons why so many people support reform.
Is not aiming their guns at the poorest paid in the country a sign of the abject poverty of the Government's approach to reducing the total of 4 million unemployed?
§ Mr. John Townend
I draw the attention of my right hon. Friend to early-day motion 580 calling for the abolition of the wages councils. Is he aware that it is sponsored by the chairmen of the major Back Bench committees on finance, employment, trade and industry, small businesses and European affairs?
§ Mr. Evans
Will the Secretary of State acknowledge that the attitude of most Tory Members who call for the abolition of wages councils, particularly those such as his hon. Friend the Member for Bridlington (Mr. Townend), results from the expectation that wages in those sectors will fall, even though the people covered by wages councils' awards are among the lowest paid in the country? Does that not sum up the present mean and savage attitude of the Tory party towards ordinary hard-working people?
§ Mr. King
There is a much more fundamental problem, which the hon. Gentleman must be prepared to address. In certain instances it can be demonstrated that wages councils keep down rather than put up wages, and I shall be happy to explain that point to the hon. Gentleman. In other sectors there is no doubt that it has led to the loss of jobs and job opportunities. The House must consider carefully whether it can stand aside from reform or abolition if that would lead to a substantial increase in jobs.