Christopher Chope
Main Page: Christopher Chope (Conservative - Christchurch)Employment Opportunities Bill
Christopher Chope Excerpts
Mr Christopher Chope (Christchurch) (Con)
I beg to move, That the Bill be now read a Second time.
I am delighted that my hon. Friend the Member for Worthing West (Sir Peter Bottomley) is here, because the Bill incorporates the Training Wage Bill, which he has expressed support for, and he has expressed concern in the House that on a previous Friday I chose not to put that Bill forward for debate, which I did because I was anticipating this occasion today. I am grateful for his presence and support, as I am grateful for the presence and support of other hon. Members. I know that my hon. Friend the Member for North East Somerset (Jacob Rees-Mogg) is particularly enthusiastic about clause 1, if not about the whole of the Bill. Obviously, the message to all those who like parts of it but not the whole is that the Bill should be given a Second Reading so that it can be filleted as appropriate in Committee.
Sir Peter Bottomley
My hon. Friend refers to clause 3, which I am sure he will get to, but as I have to leave the Chamber to meet some young people, I hope he will allow me to make a point now. I do not think that the clause is broad enough. Clearly a training wage matters, but when I was a teenager and often taking casual work, it was not the training I was after, it was the work experience, being with people and earning money instead of spending money. I hope he will think of broadening the Bill in Committee so that it allows people to take worthwhile work, whether or not there is training, with a wage. That work should also be worthwhile to the employer and the customer.
Mr Chope
My hon. Friend makes a brilliant point, and I hope very much that he will be willing to serve on the Committee when that occasion arises. I am sorry that he will not be able to participate fully in the debate, but I understand that he is seeing constituents. His long-standing interest in common sense applies particularly to work opportunities for young people and is well known and respected across the House.
Members of the House are so conditioned to the advances of state socialism by stealth that the Bill may come as a bit of a shock.
Mr Denis MacShane (Rotherham) (Lab)
Perhaps later on the hon. Gentleman could give us an example of socialism in Britain. Some Opposition Members might be interested to find out more about this new invention. Should not the Bill properly be called the increase in working poverty Bill, because the assault on the minimum wage—that thin line that protects the poorest workers from employer exploitation—which is the thrust of the Bill, is the meanest most miserable act from a mean and miserable party that hates the working people of this country?
Mr Chope
The right hon. Gentleman once again demonstrates his bitterness and his socialist credentials. When I introduced the Employment Opportunities Bill in the 2009 Session, I had, by this stage on the Friday morning, been inundated by hostile e-mails from various vested interests in the trade unions. The fact that that has not happened on this occasion shows that there is now a completely different climate of opinion out there, and that the trade unions realise that the minimum wage is of less significance than the fact that too many of their potential fellow workers and, particularly, too many young people do not have jobs. The right hon. Gentleman has failed to catch up with that change in the climate of opinion and the desire of most of us to ensure that we have increased international competitiveness and, as a result, higher standards of living and greater employment.
Mr Thomas
I meant, “I am very grateful to the hon. Gentleman for giving way.” I am sure his time will come again.
Does the hon. Member for Christchurch (Mr Chope) think the climate of opinion has changed among his Front Benchers? Does he think that they will be tempted to support his Bill this morning?
Mr Chope
I doubt it, frankly. I am delighted to see the Minister of State on the Front Bench, but we do not have a Conservative Government, we have a coalition Government, and that is the Achilles heel. In due course we will see that my hon. Friend speaks not from a Conservative party brief but from a coalition Government brief. None the less, I and, I hope, some of my colleagues will be able to speak freely on behalf of the Conservative party.
The hon. Member for Harrow West (Mr Thomas) will recall that back in 1997-98, when his party introduced the minimum wage legislation, the Conservative party strongly opposed it on principle and on the basis that it would prove to be counter-productive and not in the long-term interests of Britain’s competitiveness or, indeed, of people wanting to get into work.
The initial level at which the minimum wage was brought in was so relatively low that it did not bite as acutely as some people had feared it might, but since then the level has risen by the best part of 70%, far ahead of average earnings and of inflation, and as a result it bites a lot more than it used to. That is why I hope that my hon. Friend the Minister and, certainly, my party will look again at the issue and see what is happening in the real world as a result of the minimum wage legislation that we have.
Philip Davies (Shipley) (Con)
Does my hon. Friend also recall that it was not only the Conservative party that opposed the minimum wage when it was first introduced, but the Liberal Democrats?
Mr Chope
My hon. Friend is second to nobody in his knowledge of parliamentary history and, in particular, of the Liberal Democrats, and I am grateful to him for reminding us of that and for putting it fairly and squarely on the record. I saw that at the same time as he was doing so the Deputy Leader of the House moved from his place to chat to Mr Deputy Speaker—perhaps so that he might feel absolved from the requirement to intervene.
Sir Peter Bottomley
We recognise that the Deputy Leader of the House is still here as an invigilator and monitor, but has my hon. Friend noticed that the hon. Gentleman’s Liberal Democrat Back Benchers—our allies—have kindly trusted my hon. Friend to do what he wants? He should do what he wants and not hold back.
Tony Lloyd (Manchester Central) (Lab)
I appreciate that the hon. Gentleman is only in the foothills of his speech, and I am sure that we will enjoy every moment of it—at least its comedy, if not in reality. On a serious point, however, he notes correctly—as far as I am aware—that both the Lib Dems and the Conservative Front Benchers have never formally stood up in Parliament and said that they recognise the validity of the minimum wage. Does he believe that his Front Benchers have now changed their minds, or are they, like him, waiting for the right time? How does he square that with the position of Boris Johnson, who is not simply in favour of the minimum wage but wants to go higher and put people on the living wage?
Mr Chope
The hon. Gentleman makes a good point, but I think that the Mayor of London would be very supportive of clauses 4 to 6, which basically call on the Low Pay Commission to look at the impact of different wage levels on regions and travel-to-work areas, because the Mayor recognises that the cost of living in London is much higher than in other parts of the country. In order to afford that cost of living, people on the whole in London need to have higher levels of minimum wage, or higher levels of wages, than people in other parts of the country. At the moment, the rigidities of the national minimum wage legislation and the regulations made thereunder exclude that flexibility.
Tony Lloyd
That is very helpful, because the hon. Gentleman says that in London people need to have a minimum wage, so I think he is buying into the concept of the necessity of the minimum wage. We may be debating this rather unhappy idea of a regional differential, but it is interesting that he is making progress in his support for the minimum wage.
Mr Chope
The hon. Gentleman will know that my Bill does not actually abolish the minimum wage; it enables freely consenting adults to opt out of it and calls on the Low Pay Commission to look at the market for labour throughout the country, having regard to the differences in individual travel-to-work areas. I hope therefore that, if he wants to oppose the Bill, he will do so on its merits, but following his intervention I am bound to observe that on today’s Order Paper he has his own maximum wage Bill.
I do not know whether that Bill is designed to curb the excesses of footballers or what, but as always he seems keen to intervene in the market rather than to allow the market to dictate what should happen and to allow people to make free agreements. I am as much in favour of allowing footballers to agree with their clubs terms that to most of us seem incredibly generous. Why should they not be able to do so if those terms are agreed freely? In the same way, why should not people who are willing to work for less than the minimum wage be allowed to do so freely?
Tony Lloyd
Has the hon. Gentleman read his own Bill? He said that the Mayor of London might want a minimum wage in London set higher than the national minimum wage, but that is not what clause 4 states. It allows for a recommendation
“that the minimum wage in any…area should be set at a level below the national minimum wage,”
but it does not mention “above the national minimum wage”. Seriously, if the hon. Gentleman promises to read his own Bill, perhaps we can debate its real merits.
Mr Chope
If we have a national minimum wage, we should be able to opt out of it. If the hon. Gentleman is arguing that there should be not a national minimum wage but a regional minimum wage, that is a completely different proposition, and it would need a different Bill, but I suppose that my Bill might be amended to reflect his wishes, were that the wish of the House.
Mr David Nuttall (Bury North) (Con)
Is there not some confusion between the “national minimum wage” and what is described in London as the “London living wage”? That is something entirely different and, as I understand it, something set annually here in London, not by the Low Pay Commission.
Mr Chope
My hon. Friend is absolutely right, and I do not know, because I have not inquired, how many hon. Friends of the hon. Member for Manchester Central (Tony Lloyd) employ people as interns for well below what my hon. Friend and the Mayor of London would describe as the London living wage, but perhaps we will hear about that in due course.
I do not want this Bill to go forward without some focus on clause 1, because under current law we deny those foreigners seeking refugee status the right to work in this country.
Clause 2 deals with the problems that the current law restricts British citizens from selling their labour at a price of their own choosing; discriminates against those who are young, inexperienced or seeking on-the-job training; prevents people from agreeing to cut their wages to save their jobs; and imposes nationally uniform rules on the labour market, ignoring regional and local variations. All those shortcomings are tackled in the Bill, which effectively recognises the right to work.
The context for that can be found in article 23(1) of the universal declaration of human rights:
“Everyone has the right to work, to free choice of employment, to just and favourable conditions of work and to protection against unemployment.”
Article 6 of the international covenant on economic, social and cultural rights, to which the UK is a party, states:
“The States Parties to the present Covenant recognize the right to work, which includes the right of everyone to the opportunity to gain his living by work which he freely chooses or accepts, and will take appropriate steps to safeguard this right.”
I think it will come as a shock to many Members to know that currently many people are not given the right to work enshrined in those important United Nations articles. The Bill is designed to address that problem.
To make it clear to the hon. Member for Manchester Central that I have read my own Bill, I have noticed that there is a typographical error in clause 1. As a consequence, it would enable only foreigners who are in detention to work, rather than the reverse, which was the intention. I put that firmly on the record and apologise to the House. I will address my remarks to clause 1 as it should be, rather than as it is.
Clause 1 refers directly to those unlucky enough to be seeking asylum in this country as a result of persecution, and obviously to their families. Why are we depriving people who are seeking asylum of the ability to earn money while in this country, so that they can make ends meet and not be wholly dependent on the state? The shock of seeking refugee status should not be exacerbated by the humiliation of not being able to take employment and contribute to the society that is acting as their host while their application is considered.
Mr Peter Bone (Wellingborough) (Con)
Speaking as the chairman of the all-party group on human trafficking, one problem for victims who have been trafficked into this country is that if they are rescued by the police and start to recover, they are not allowed to work because they are treated as asylum seekers.
Philip Davies
As my hon. Friend knows, he and I agree on virtually everything. However, as I reflect on the delicious irony of the Labour party stacking up to oppose a Bill that would allow asylum seekers to work, I wonder whether he thinks that his measure would be a further magnet for vexatious attempts to claim asylum in this country.
Mr Chope
If it would be, I certainly would not put it forward. In fact, I want it to be the complete reverse. I want the Bill to put pressure on the Home Office to deal with asylum applications a lot more quickly than it does. If asylum applications were regularly dealt with within a few weeks, the issue of asylum seekers being unable to work and support themselves would not be as serious. However, I have had constituents come to me—I am sure my hon. Friend has had similar experiences—and say that they have been waiting for seven or eight years to have their asylum cases dealt with. That goes back to the days when the Government of the hon. Member for Harrow West were trying to run the country. That puts asylum seekers in an impossible position. They want to work, but they are prevented from doing so by the law of the land.
Tony Lloyd
Or it may not. The hon. Gentleman might be interested to know that I have long held the view that he is putting forward. It is ludicrous that there are Zimbabweans whom we will not return to Zimbabwe—quite rightly because of the situation in that country—but who are prevented from working for themselves, their families and, frankly, the rest of the country. That makes no sense. He might be surprised to learn that there is a lot of support for that view among Opposition Members.
Mr Chope
I am delighted to learn that that was a useful intervention, and I am glad that I gave way. When I gave the example of my constituents, I had a Zimbabwean in such a position in mind.
Obviously, in putting forward a proposal such as clause 1, one needs a statistical basis to show how many people would be affected. It seems as though all the statistics produced by the Home Office in this regard are completely unreliable. The Daily Telegraph reported on 26 April that 25,345 new asylum cases submitted since 2008 still awaited a conclusion. The Home Affairs Committee reported on 24 May that the independent chief inspector of the UK Border Agency agreed that there was a new backlog, but did not know its extent. He advised that he might find out what the extent of it was in due course. We know that the Government were going to achieve the target of completing 90% of asylum cases within six months by December 2011. My understanding is that that target has been abandoned in favour of what is described as a “basket” of 11 alternative indicators. The National Audit Office report of 15 March indicates that up to 181,000 people might have overstayed their work, student or family reunion visas in the past four years. We also know that migrants are arriving in this country at a rate of between 500,000 and 600,000 a year. That is more than 10,000 a week.
There is a problem here. I think that the most deserving people who come in as migrants are genuine asylum seekers and refugees. However, the UK Border Agency makes it quite clear on its website, under the heading “Employment”, that asylum seekers are not allowed to work:
“You will not normally be allowed to work while we consider your asylum application, except in very limited circumstances.”
It continues:
“Currently, most new asylum applications receive a decision within 30 days.”
That is what the website says, but it is not borne out by the statistics to which I have referred. So what actually happens? Instead of allowing asylum seekers to obtain employment, we, as national taxpayers, give them support. We provide them with cash, housing, access to the health service and access to our schools when children are involved. We are paying out a lot of extra money to support people while denying them the opportunity to support themselves.
Does that make sense? In my book, it does not make any sense whatever. I therefore hope that the Government will look carefully at my proposition.
We know that in Sweden, for example, asylum seekers are given the right to work. We can contrast the situation there with that in Greece, about which I have recently received a lot of evidence in my capacity as this year’s chairman of the Committee on Migration, Refugees and Population of the Parliamentary Assembly of the Council of Europe. The situation in Greece is desperate, because the Greek authorities will not allow the tens of thousands of asylum seekers in the country to work. As a result they cannot get their cases dealt with quickly, and some have been waiting there for many years. Now there is a outbreak of lawlessness, including murder and a lot of robberies, in Athens and surrounding areas, committed by desperate asylum seekers who do not have the means or ability to lawfully seek jobs. They are locked into Greece because they cannot get into any other country. They cannot go back to Turkey, through which most of them arrived. The situation for asylum seekers there is chaotic and desperate. I do not want to see that replicated in this country.
Mr Bone
The problem in this country, at least from my experience in Wellingborough, is that although people are trying to deal quickly with new asylum cases, the backlog includes people who have been here for years and years. Their cases are not being decided because of the concentration on new applicants. That means that they have to live on benefits for years, when they want to go out and work. Often, they have married and had a family. That situation cannot be right.
Mr Brian Binley (Northampton South) (Con)
My hon. Friend is as eloquent as ever, although I hope he will speed up a little in order to allow me to deal with my Bill
Is my hon. Friend going to talk about the black economy? One problem with the employment law he is talking about is that it enlarges the black economy. There is certainly evidence of that in Greece, and from my experience there is evidence of it in Northampton, too.
Mr Chope
My hon. Friend is absolutely right about the black economy, and indeed I will refer to it in due course. The Low Pay Commission itself accepts that there are more than 1 million operating in the black economy at below the national minimum wage. That demonstrates that the minimum wage legislation is not working anyway and is widely ignored.
Jacob Rees-Mogg (North East Somerset) (Con)
It occurs to me that one advantage of what my hon. Friend proposes is that the mood towards asylum seekers in this country would improve dramatically. Many people feel that if asylum seekers are coming here and claiming benefits, claiming benefits was their reason for coming here. If asylum seekers were working and contributing, the British people would regard them more sympathetically
Mr Chope
My hon. Friend makes a really good point. This month we are celebrating 60 years of the UN refugee convention. One of the problems of public perception is that although everybody supports refugees—I think almost everybody would say that we are happy to look after refugees—they do not regard all asylum seekers as genuine refugees. They now think of asylum seekers as what are called illegal or irregular migrants. If we were able to give the genuine asylum seeker enhanced status, as he says, that would raise the esteem in which they are held in this country and their own self-esteem.
I turn now to clause 2. You will know, Mr Deputy Speaker, that the minimum wage is currently £5.93 an hour for an adult over 21, but this October it will rise to £6.08 an hour for such an adult, to £4.98 for those aged 18 to 20 and to £3.68 for those aged 16 or 17. In addition, for apprentices who are within a particular age range there will be a minimum wage of £2.60 from this October. To illustrate the consequences of my Bill, I will use the October figures rather than the current ones.
Defenders of the minimum wage argue that it represents the minimum living wage, but if so, why do hundreds of thousands of self-employed people work for far less, and why does the state tax the minimum living wage? I am enthusiastic about the coalition Government’s tax policy, which recognises that the minimum wage is so basic that it should not be taxed, but we are a long way from that at the moment. From October, the minimum wage for a 40-hour week will amount to £12,646 a year, whereas even the enhanced tax-free allowance for a single person will be £7,475. That means that even somebody on the minimum wage is paying tax on more than £5,000 of their income. In consequence, far from actually receiving a minimum wage of £6.08, the amount that people who are working full-time can take home is more like £5.
Mr Chope
My own view is that the Government got it wrong—I will be blunt about it. There is no point in beating about the bush. I know that I am supported in that opinion by a lot of other commentators. I will discuss later one comment on the increase of 2.5% for adults and an even smaller percentage for young people, which is that it will be disastrous for young people. If that modest increase in the minimum wage is going to make an enormous difference to young people, what would be the consequences of introducing the flexibility in my Bill? It would be nirvana for young people who do not currently have work and are seeking it. We need to consider the matter in context, and I think there is a much bigger issue than whether the minimum wage should be raised by 2.5%, as it has been this year.
Raising the personal allowance will do a lot more to help people on the minimum wage than the 2.5% increase. The effect of the interaction between the minimum wage and income tax is that about 8% of the income of somebody working on the minimum wage will be taken in tax, plus what is taken in national insurance contributions.
If a single adult is out of work, he is entitled to an out-of-work benefit payment of between £60 and £70 a week—well below £2 an hour, even for a 35-hour week. However, the minimum that he can be paid if he works for 35 hours is more than £200 a week. That is a big gap. If he is offered, and willing to take, 35 hours’ work for, say, £140 a week, which is twice what he can get on the dole, the state does not allow him to take it despite the fact that it would save the state a significant amount of money. I put this to the House and to the Government: how ludicrous, mad and silly is that situation? Why can we not allow somebody who would otherwise try to exist on benefits of between £60 and £70 a week to go out and obtain gainful employment and double his remuneration? Currently, we do not allow that.
The freedom to work for less than the minimum wage would not be attractive to everyone, which is why the Bill does not seek to abolish the minimum wage but to facilitate an opt-out by mutual consent. That freedom would not be attractive to everybody. Some might choose to invest some of their time looking for much better paid work rather than undertaking work below the minimum wage.
Jacob Rees-Mogg
It just occurred to me that somebody who refused a job who had not opted out of the minimum wage could exclude themselves from receiving jobseeker’s allowance. Would that be the case, or could the Bill make provision for that?
Mr Chope
The Bill could make provision for that—I certainly intended to make provision for that, but it is not expressed in the current wording. My hon. Friend makes a good point, because we do not want to introduce more disincentives to opting out of the minimum wage, such as putting people in a position in which they are not entitled to any benefits should their circumstances change.
Another reason why people may not want to opt out of the minimum wage is that unemployment benefit or jobseeker’s allowance provide access to passported benefits—meaning that they bring with them money for dependents and help towards housing costs and so on—so people could be worse off working for less than the minimum wage than if they were on benefits. My question is why should these people not have the freedom to decide for themselves whether or not they wish to work for the minimum wage?
Many self-employed people earn far less than the annualised minimum wage for full-time work, thereby avoiding the constraints of the national minimum wage legislation and fixed penalties. There are fixed penalties, which can run into thousands of pounds, for employers who take people on at below the minimum wage, even if that person wants to work for less than the minimum wage.
Of course, not everybody wants to become self-employed. Another argument that I expressed when the minimum wage legislation was originally before the House in the late 1990s was that it discriminates unfairly and disproportionately against people who are not classified as fully disabled—for the purposes of this argument, I shall describe such people as conscientious plodders. It might take such people a bit longer to do a given bit of work than it would take the average person, but by having a national minimum wage we are putting them at a significant disadvantage, because they might otherwise be able to work longer hours for less money per hour to achieve the same objective. If they did that, they would take pride in being able to work and contribute to our society. I do not have the figures with me, but I believe that the proportion of disabled people who are unable to get a job is rising rapidly. That might well be linked with the advent of the national minimum wage.
What would be the consequences of enabling people to opt out? There are many examples of people who offer work to others, such as window cleaning, gardening and car washing, that is not worth as much as the minimum wage. I am not talking only about what we used to know as boy scouts’ bob-a-job week jobs—it is probably more than a bob a job these days. Many people would be willing to offer something less than the minimum wage for a job, but they are currently not allowed to do so. If the price is right, a potential employer will be willing to provide work. I am sure that there is a lot of opportunity out there in the marketplace. People would offer work to people if the wage demanded were not as high as it is currently under the minimum wage. That is particularly true in the more remote regions of the country.
Mr Thomas
I am grateful to the hon. Gentleman for being so generous in giving way. As part of his preparations for today’s debate, has he had the opportunity to study a paper published by the National Institute of Economic and Social Research that suggests that the minimum wage has helped to increase rather than reduce employment?
Mr Chope
I did come across a document that seemed to say just that, but I am not sure whether it was the one to which the hon. Gentleman refers. I read it, but I was not convinced. Indeed, I shall refer in due course to an article that I believe is much more in tune with my views on this matter. It is interesting that he refers to documents from that body, which includes in its title the words “social research”. If anybody should examine this issue, I would have thought it should be the Low Pay Commission and objective, independent commentators.
Philip Davies
On that point, is it not bizarre that the previous Labour Government used to believe that if we put the price of something up, we would get less of it? Hence they fervently increased the price of tobacco, because they thought that would mean that fewer people would smoke, and increased the price of alcohol on the basis that fewer would drink. Surely by the same logic, if we increase the cost of employment, there will be less employment.
Mr Chope
My hon. Friend is absolutely right. It is certainly true that we would get less official employment, which goes back to the point made by my hon. Friend the Member for Northampton South (Mr Binley) on the black economy. If the minimum wage results in higher numbers of people in work, why are more than 1 million people working in the black economy below the minimum wage, as the Low Pay Commission assesses?
Mr Nuttall
So if we continued to increase the minimum wage, would we get rid of all unemployment? That seems to be the logic.
Mr David Hamilton (Midlothian) (Lab)
What would the hon. Gentleman say to the many employers in my area in small and micro companies who want to pay a fair wage, and indeed do so, if they were undercut by an unscrupulous employer down the road who did the same work? In the latter’s profit margins, one factor would be the lowest wage possible. What would he say to the good employer who wants to pay a fair wage because he knows his employees personally?
Mr Chope
That is happening in the real world anyway. Employers in the black economy do not pay tax or national insurance, or offer basic health and safety protection, but they compete with employers such as the ones to which the hon. Gentleman refers.
Let us consider my situation. In the House of Commons, I happen to employ a researcher/intern and pay them more than the national minimum wage, but I do not feel that I am at a competitive disadvantage compared with those colleagues who pay interns nothing or significantly less than the national minimum wage. If employers in the hon. Gentleman’s constituency have good quality employees and look after them well and reward them appropriately, all other things being equal, they can prosper in the marketplace. Currently, many jobs go to countries in the third world that do not have minimum wages or wages anything like as high as we have. However, if we are to provide good-quality jobs in this country, we need the freedom to allow people to compete, and we need to allow people the freedom to work and reach an arrangement with their employer, if they want to.
Let us imagine that one of the constituency firms to which the hon. Member for Midlothian (Mr Hamilton) referred was up against it, had had a big drop in its order book, was facing problems with the bank and all the rest of it. If these people were on the minimum wage and the employer went to them and said, “Look chaps, we’ve got this financial crisis in the company, so we need to come to an agreement whereby we all reduce our wages and salaries if we are to get through this crisis”, that would not be allowed to happen. How inflexible and absurd is that? I hope that the hon. Gentleman will consider this issue in a different light following this debate, and discuss these important issues with employers in his constituency and, more importantly perhaps, people in his constituency who are currently not working but willing to work for less than the minimum wage, if allowed to do so.
The right to work covers not only remuneration, but how many hours are worked. I will not go into this, but obviously there are considerable worries about restrictions on the ability to opt out of the 48-hour working week. That brings me on to clause 3, which incorporates the training wage into the Bill. I am sure that I speak for many colleagues in saying that I could fill my office with unpaid volunteers and interns. Large numbers of organisations now rely on getting young people into their workplaces for no remuneration at all, even when they have to work in London. That is grossly unfair, but one of the reasons it is happening is that there is no flexibility for such people to be paid something between zero and a national minimum wage. If a person is inexperienced and lacking in qualifications, they will obviously be at a disadvantage in the labour market compared with somebody who has got experience and better qualifications. We should be encouraging, facilitating, enabling these people to join the labour market, rather than acting to exclude them.
That is particularly the case for young people. Record and rising numbers of young people are out of work. There was a blip in the figures published this week, but the trend is unmistakable—the number of people between 18 and 24 who are out of work is rising exponentially. Figures for my constituency show that in the period up to May the number of under-24s out of work was rising, whereas the numbers for those in the older age groups were falling.
Mr Thomas
I rise to enable the hon. Gentleman to find the figures from Christchurch, and gently to make the point that perhaps abolition of the future jobs fund, which I think he supported, might not have been such a good idea after all. May I draw his attention to clause 3(2), in which he talks about an
“entitlement to training from the employer in skills relevant to the employment”?
There is no sense in the clause of a quality threshold for that training. Is that not a further reason for the scepticism of those in the House and outside who worry that this part of the Bill would also undercut the minimum wage and allow, as my hon. Friend the Member for Midlothian (Mr Hamilton) hinted at just now, rogue employers to undercut the quality jobs offered by the many, many good businesses in this country?
Mr Chope
I am grateful to the hon. Gentleman for intervening, and I will return shortly to the figures I have now been able to find as a result of his intervention. On the training wage, I am disappointed by his intervention because it shows that he is trying to be pedantic. He is not sure whether under the contract of employment entered into voluntarily between the employer and the trainee—for want of a better expression—the training would be of a sufficient quality. However, that would be a matter between the person being trained and the employer. If that is the hon. Gentleman's only objection, I would be happy to see what could be done in Committee, but I suspect that his objection is much more fundamental, because he is on the side of producer interests backed up by the trade unions. He is not really interested in having a genuine training wage, which is what I suggest we should promote through the Bill. I do not want to appear too sceptical or cynical about what his interventions are really motivated by.
According to statistics from the House of Commons Library, in my constituency in April 2011, there were 205 jobseeker’s allowance claimants under the age of 24, which was an increase of 2.5% over the year. For those between 25 and 49, there was a reduction of 375, which was a 22.7% reduction, and for those aged 50 and over, the numbers were 150 and a 30% reduction. Those figures speak for themselves—they show that we have a real problem. While the numbers of people receiving jobseeker’s allowance in the older age groups are declining—certainly in my constituency—the same is far from true for those in the younger age range. A rational body deciding on policy would say, “There’s a problem here. We have to try and address it.” I hope, therefore, that my hon. Friend the Minister will tell us when he winds up the debate what the Government are going to do to get more young people trained and back into work, if they are not going to adopt my suggestion in clause 3.
Mr Bone
Before my hon. Friend moves on, may I use the word “scandal” about the situation with interns? People come to me asking to be interns—people with university degrees—but I cannot pay them anything because of rules set by the Independent Parliamentary Standards Authority, which means effectively that the only people whom I take on as interns are people from wealthy backgrounds. That cannot help social mobility and is wrong. IPSA needs to reconsider that specific point.
Mr Chope
I am sure that the powers that be in IPSA will be listening to every word my hon. Friend says. I agree with him. This, again, is one of the problems with having centralised bureaucracy intervening in the marketplace. Perhaps if clause 3 was on the statute book, it would provide a complete answer to the problem he has identified.
I was talking to a colleague yesterday who said that his son, a recent university graduate, was out of work. At the moment, about 20% of graduates are unemployed. That does not mean that they are unemployable—most of them want to get a leg up into the workplace, but at the moment they are being deprived of that. I had a case in my constituency of a graduate, aged about 24 or 25, who said that he would be happy to work for the so-called apprenticeships minimum wage—it will be £2.60 from October—but he is not allowed to do so because it applies only to people aged 18 or 19. That, too, is a real issue.
I promised earlier that I would refer to Mr David Frost of the British Chambers of Commerce, who said:
“The change to the national minimum wage rate is the wrong increase at the wrong time and will risk pricing young people out of work when youth unemployment is at a record high”.
As I pointed out earlier, if he thinks that a 6p an hour increase in the minimum wage for young people will break the bank, would not completely removing the constraints of the national minimum wage from young people undertaking training have an even greater impact? That is not always the case, but I do not go as far as Eamonn Butler from the Adam Smith Institute, a good friend of mine, who on 17 February called for the minimum wage for young people to be totally scrapped. He set out some cogent arguments and said that the minimum wage
“prices them out of jobs, so does them no good at all. For them, low-paid work is a way of building up some human capital that will make it easier to find a better job. But we stop them even getting that work at all—and all in the name of protecting workers.”
I very much agree with those sentiments.
The last part of my Bill deals with the need to ensure flexibility in the labour market in different parts of the country and sets out a method by which the Low Pay Commission will be required to address those problems.
I hope that this Bill will command the support of the House. However, I hope also that it will trigger a much more serious debate than we have had so far across the Chamber, among my political party, the coalition Government and the Opposition, because this issue is far too serious to be the subject of yah-boo politics—“Are you in favour of the minimum wage or are you against it?” We need to examine the issues in a rational, non-prejudiced and hard-headed way, so that we can get more people back into jobs and enable our economy to prosper.
Mr Thomas
I am grateful to the hon. Gentleman for giving way, as he is clearly winding up to his summary and peroration. With all due respect to him, he has a tendency to march his troops up the hill on a Friday, only to march them straight back down just a little bit later. If those on the Government Front Bench do not share his analysis, will he force a vote on the Bill, or will he once again march his troops back down the hill?
Mr Chope
The hon. Gentleman is uncharacteristically disparaging, if not insulting. First, I am not aware of having any troops. Secondly, if he is referring to the fact that I withdrew my two earlier Bills—the Training Wage Bill and the Minimum Wage (Amendment) Bill—he makes a fair point. However, I withdrew those Bills from the Order Paper because their provisions are incorporated in the Employment Opportunities Bill word for word. Having the good fortune to have secured a debate that could go on for five hours, I thought it better to have one, proper debate, rather than three separate debates. If it is the hon. Gentleman’s accusation that I withdrew those two Bills so that they could be incorporated into this Bill, I plead guilty.
So far as forecasting what will happen after the Minister has spoken, I cannot do that. When the Whips ask, “How will you be voting?”, I always say, “I’m going to wait and hear what the Minister says,” because I have an open mind on these issues. The Minister may well announce that he will support my Bill. Indeed, I had the wind taken out of my sails last Friday when a Minister said just that, and my Bill was unopposed on Second Reading.
Mr Chope
I am disappointed about that, because it sounds as though my hon. Friend may have come to the Chamber with his hands tied—perhaps by the coalition strings—and unable to address the arguments that have been deployed. Perhaps he will tell us a little more about that in due course.
Mr Bone
I hope that my hon. Friend is not missing the point. The shadow Minister—the hon. Member for Harrow West (Mr Thomas)—has been really helpful, because clearly the Opposition are fully behind the Bill and want to have a Division to help us. My hon. Friend should please not miss that point.
Mr Chope
A Division puts people’s positions on the record. For example, the hon. Member for Manchester Central (Tony Lloyd), who says that he supports the Bill—certainly clause 1, if not all of it—might be forced into the position of voting against it, but that would then be on the record. If he wants to vote against the Bill, I hope that he will have the opportunity to do so. I cannot remember how many Bills of mine have gone to a Division this Session—my hon. Friend might know the exact number—but quite a lot of them have. I assure the hon. Member for Harrow West that there is no deal between me and the Government to discuss the Bill and for me then tamely to withdraw it, but obviously I am conscious of the fact that we can have a Division on the Bill only if it is not talked out beyond 2.30 pm. We would also need to take into account the other, equally meritorious Bills seeking debate this morning.
Nick Smith (Blaenau Gwent) (Lab)
I would encourage the hon. Gentleman to have a Division on his Bill, which I see as a bob-a-job wages plan. In Blaenau Gwent we would definitely be against his plans to allow, as he put it previously,
“freely consenting adults”
to
“opt out of the minimum wage”.—[Official Report, 10 February 2009; Vol. 487, c. 1258-59.]
I see this Bill as a miserable attempt to gouge down the wages of workers across our country. We should have a Division, and we should vote against this miserable Bill.
Mr Chope
I do not have time to look up the unemployment figures in the hon. Gentleman’s constituency, but I am sure that all those without jobs who are seeking them will be really pleased to know that they have his full-hearted support for opening up the labour market and giving them better employment prospects.
This Bill is about the fundamental freedom, liberty and right to work. It also has consequential benefits for the competitiveness of our economy. Clause 1 would save quite a lot of money for the taxpayer, and the other clauses would generate more employment and less dependency on benefits. This is a really good Bill, and I commend it to the House.
Philip Davies
Mr Deputy Speaker, you would not want me to start talking about the national health service in this debate, so I shall resist my hon. Friend’s tempting offer, but he is absolutely right that it is considered unacceptable in politics to argue for certain unpopular causes. I always ask people to celebrate anybody in politics who will stand up and say something controversial or unpopular, because I think they are doing a great service to our democracy, even though they may be insulted by Labour Members. I therefore commend my hon. Friend the Member for Christchurch on bringing this important issue before the House, and for trying to generate a grown-up debate about the benefits, or otherwise, of a fixed national minimum wage that people are not allowed to get out of.
I have always believed that a political consensus is usually a precursor to a disaster. Every party in this House supported joining the exchange rate mechanism, yet it turned out to be a complete disaster. The setting up of the Child Support Agency had cross-party support and it was seen as a great thing, but it has been a complete fiasco. Everyone across the political divide has had to support the setting up of tax credits, too, yet anybody who has had any dealings with the system knows that it has been a complete fiasco as well. The fact that there is political consensus in support of a measure does not mean to say it is good, therefore; it just means to say the measure is likely to be politically expedient.
Mr Chope
My hon. Friend makes a good case. Does he agree that that problem is not confined to our Parliament? The political consensus getting it wrong is precisely what happened in Greece: there was cross-party consensus that the country should join the euro, and what a mess they have made of it!
Philip Davies
My hon. Friend is absolutely right. We should never allow political expediency to prevent a serious debate about what is right, which is why I particularly commend my hon. Friend for raising this issue.
I apologise for not having been present in the Chamber for the beginning of my hon. Friend’s speech. He may well have said then what I am about to say now, but if he did not, I certainly wish to do so. We must acknowledge that the introduction of the national minimum wage has been a huge benefit to a lot of people in employment. As a result of the national minimum wage, the pay of a lot of people who were being paid a low wage went up, so it has been a great success for them. It would be churlish to argue otherwise. I certainly would not pretend that the national minimum wage has been a total disaster for everybody, because it clearly has not. However, just as I would not argue that, I think it would be churlish for Labour Members to put on their political blinkers and just see the benefits that have been accrued by certain people, without being open-minded enough to look at the potential downside of a national minimum wage in its current form. If Labour Members do not think there are any downsides whatever from having a national minimum wage, they are either totally blinkered in their view or they do not live in the real world.
Philip Davies
I will tell the hon. Gentleman what is an outrage. It is an outage that in 1997, 47,000 people had been on incapacity benefit for five years or more, but by the time his party had ruined the country that figure had risen to 1.5 million. That is an outrage that he should be reflecting upon. He should think about the fact that so many people were either priced out of the jobs market or were just out of that market as a result of his Government’s policies. That happened either because of the national minimum wage or because the benefits system penalised people for going out to work. That is the real outrage, rather than what he is pointing out.
Mr Chope
My hon. Friend is making a brilliant contribution. Does he accept that one of the tragedies is that this situation was forecast? Back in 1998, the Low Pay Commission said that
“minimum wages may cause a transfer of jobs between groups such as the substitution of more skilled for less skilled workers”.
The less skilled workers are the ones who have lost out as a result of the minimum wage.
Philip Davies
My hon. Friend is absolutely right. Of course, it is very easy for everyone to try to sweep such matters under the carpet, but we would be doing this place a great disservice if we did. I am appalled that Labour Members, who supposedly—as they claim—represent the most vulnerable in society, are perfectly happy for those people never to be given the opportunity to get a job as a consequence of Labour’s policies either on this matter or on benefits.
Philip Davies
My hon. Friend might think that such choices should be available only to people who are highly paid, but a firm in which all the staff are paid the minimum wage might be faced with the same predicament. Why does he think that the only people who should have the choice are highly paid people? Why should more lowly paid people not have the same option to take a pay cut or to be made redundant? Why does he want to deprive them of that choice? Why does he think that only highly paid people are capable of making that decision? Why are not more lowly paid people capable of doing so, if they feel it is in their best interests? To force those people to be made redundant in such circumstances is, I think, an outrage. It is an outrage that we would not allow them to make the choice themselves. The whole principle is that the Government and state know best and know what is best for everybody, so they will not even allow anybody to make the choice for themselves.
Mr Chope
My hon. Friend knows that our hon. Friend the Member for Gainsborough (Mr Leigh) can be a bit paternal at times, but I wonder what he would think of what happened in Ireland? Owing to the centralised situation to which my hon. Friend the Member for Shipley (Philip Davies) refers, the Government decided to reduce the minimum wage in order to get out of a financial hole.
Philip Davies
My hon. Friend raises an interesting point. As I have said, I have lost the philosophical argument and so I think some of the practical arguments should be explored. He pre-empts my speech—I am not sure whether he has been looking over my shoulder—because I was about to make the point that, although a national minimum wage might well be sustainable during periods of economic growth, the Government ought to consider introducing some flexibility to the system during an economic downturn. For example, during a recession they could consider suspending the minimum wage or reducing it. If we are to try to help people into employment during difficult economic times, it is obvious to everybody—bar Labour Members, it seems—that it will be easier without a national minimum wage.
Let me return to the point I made in an intervention. The Opposition have based their whole policy on a number of things on the argument that if we increase the cost of something as much as possible, we will reduce its consumption. For example, the argument goes that if we increase the tax on tobacco and alcohol, we will have fewer people smoking and drinking alcohol to excess. The same principle must apply to employment: if we increase the costs of employment, we will see a reduction in it. That follows the same logic. If the Opposition have decided that if we tax something more, we will not see less of it, I would welcome their conversion, but they cannot have it both ways. They cannot say one thing about tobacco and alcohol and think that the principles are somehow completely different as regards employment.
I want to return to the point made by my hon. Friend the Member for Christchurch about the tax and benefits system, because he was on to something. He powerfully made the point that many people who are self-employed in this country do not earn anything like the minimum wage, particularly when their business faces financial problems or uncertainty. I never hear Labour Members speaking up for those people and arguing that they are being underpaid. It is usually those people who are criticised by Labour Members for trying to reduce the wages of their staff, glossing over the fact that the person who runs and owns the business may well not be making any money at all at that time. It comes back to a point made by my hon. Friend the Member for Northampton South (Mr Binley) about the attitude of Labour Members. I will be charitable and put it down to a simple lack of understanding of what it is like to run a business. I am sure that they are not really nasty people; they are just misguided. They do not understand, because so few of them have ever employed anyone, run a business or faced the pressures of that. They simply do not understand what it is like.
Mr Thomas
I am grateful to my hon. Friend for adding further light to the debate.
The enthusiasm of the hon. Member for Shipley for figures encourages me to set out that in London, some 80,000 people benefit from the minimum wage. I have given a series of examples that give a sense of the sheer scale of the benefit that it has brought our country.
Mr Chope
The hon. Gentleman talks about people who benefit from the national minimum wage, but I presume that what he means is that they are being paid no more than the national minimum wage. That is not to suggest that they would be any worse off without it. He is not suggesting that, is he?
Mr Thomas
I am simply setting out how many people receive the minimum wage. I will explain later the previous low rates of pay and the significance of the minimum wage.
I understand that there remains a significant problem of underpayment of the national minimum wage. The hon. Gentleman and the hon. Member for Northampton South alluded to that in their reference to the black economy. There is a real need for a continued effort to ensure proper enforcement of the minimum wage legislation. I hope that the Minister will explain how the Government intend to tackle that.
I worry that allowing employers to drop the requirement to adopt completely the minimum wage will begin to have another impact on the public purse, because the Government and the taxpayer will have to help, through the benefit and tax credits system, even more than they currently do those on poverty wages. One must ask why the taxpayer or indeed parents, as my hon. Friend the Member for Manchester Central alluded to in a sedentary intervention, must pick up the tab more than they do for the actions of rogue employers, as egged on by Government Members.
Where is the evidence that there would be a significant increase in employment if the Bill became law? In its most recent report, the Low Pay Commission says, and I paraphrase, that the evidence suggests that the minimum wage has not cut employment to any significant degree. The commission also argues that although the number of jobs overall in the economy has continued to fall, the number of jobs in low-paying sectors has increased since the end of the recession. There is therefore no significant evidence to suggest either that the minimum wage has led to job cuts or that economic recovery is being held back by the continued existence of the national minimum wage.
Undermining the national minimum wage would also have an impact on inequality in this country. We face continuing challenges to reducing inequality, and reducing the pay for the very poorest would only exacerbate inequality. Surely nobody in the House wants that.
In preparation for this debate, I read the report of the Second Reading debate on the National Minimum Wage Bill from back in December 1997. The then Secretary of State, my right hon. Friend the Member for Derby South (Margaret Beckett), highlighted the impact that the abolition of wages councils had had on jobs in the 1990s. The right hon. and learned Member for Rushcliffe (Mr Clarke), who was then probably strongly supported by the right wing of the Conservative party—he probably is not now—had originally explained, when he was a member of the Government of the noble Baroness Thatcher, that they abolished wages councils to create employment opportunities, especially for young people and, in his words, to create an
“efficient labour market, where there are the minimum of constraints on the rights of employers and employees to agree to offer and accept jobs on contractual terms that suit them both.”—[Official Report, 11 February 1986; Vol. 796, c. 91.]
In the December 1997 debate, my right hon. Friend said:
“Abolition of the councils…saw earnings in those industries covered, particularly for the new entrants, fall in real terms. But employment in those sectors did not increase relative to the rest of industry.”—[Official Report, 16 December 1997; Vol. 303, c. 164.]
The evidence from that period fits with more recent evidence that confirms that the national minimum wage has helped to increase employment. I referred in an intervention on the hon. Member for Christchurch to a paper published by the National Institute of Economic and Social Research, “The UK Minimum Wage at Age 22”, which was authored by Richard Dickens, Rebecca Riley and David Wilkinson. The paper examines the effect of the increase in the minimum wage at age 22 and various labour market outcomes. The conclusion is that there was a 2% to 4% increase in the employment rate of low-skilled individuals, and that unemployment had declined, in particular among men.
Before the introduction of the national minimum wage, there were many horror stories about low pay. Before 1997, the low pay unit found an example of someone working in a chip shop in Birmingham and taking home just 80p an hour. It also found a factory worker earning some £1.22 an hour and a residential home worker earning just £1.66 an hour. I ask the Government Members who are championing the Bill this question: do we really want a return to those days, because that would be the impact of the Bill?
Mr Thomas
With all due respect to the hon. Gentleman, the situation is as my hon. Friend the Member for Manchester Central set out: by definition there is an inequality in the relationship between the employer and the employee, and a rogue employer wanting to take advantage of that inequality could force wages down, undercutting the wages paid by reputable—and the vast majority are reputable—businesses in this country that want to adhere to the national minimum wage.
By the time it was introduced, the national minimum wage had considerable employer support. Indeed, just before the 1997 general election, the private company DHL carried out a survey among UK exporters, almost 70% of which were either not opposed to, or directly supportive of, a national minimum wage. The case for a national minimum wage is not just a moral argument; it is not just an argument for social justice or greater equality; it is also an economic argument. Companies that can compete internationally only on the basis of quality almost always need a secure domestic base too. The small minority of rogue businesses that undercut that domestic market share of the mainstream business community undermine the latter’s ability to secure a share of the domestic market that enables it to compete on the quality that is essential to win orders in the international marketplace. Far from being a hindrance to businesses, therefore, the national minimum wage helps to ensure that employers wanting to export overseas are not undercut by other employers offering lower wages in the domestic market.
The idea that the national minimum wage is holding back employment in this country is as true as the nonsensical idea that Britain is, or was ever, in a similar economic position to Greece. That argument and those advanced today are like Don Quixote tilting at windmills. The truth is that the real danger to employment in this country are the Chancellor of the Exchequer’s economic policies—creating, as they are, a vicious circle in our economy, because of his decision to cut public spending too hard and too fast. The cuts are hitting families and those on low incomes, and leading to more jobs being axed than is necessary. The county desperately needs a sensible plan B to encourage growth. That is the way to help the unemployed, not this piece of legislation.
Mr Prisk
Of course not. I hope that my reference to the figures on the employment impact will make people reconsider what I suppose is the natural suspicion that if all wages rise, people will be squeezed out of the labour market. The evidence suggests otherwise. The size of the labour market has changed since the minimum wage was introduced, and a series of factors have changed its character, but I take some comfort from the fact that the figures are heading in the right direction. However, we need to be continuously careful that the minimum wage does not start having a negative impact.
The consensus of the research on the impact of the national minimum wage is that it has greatly affected the distribution of earnings but not had a significantly adverse impact on employment, including of those on lower income.
Mr Chope
In trying to undermine clause 2, my hon. Friend has concentrated on the position of those who are already in employment. Does he accept that there are people who are out of employment who are looking for work and genuinely willing to work for less than the minimum wage? Why is he intent on preventing them from entering into an agreement with a potential employer to do so?
Mr Prisk
I will come to internships later. It is important that we get right the balance between internships and work experience.
I want to continue my point about training. Another problem with the Bill is that what is meant by
“an entitlement to training from the employer in skills relevant to the employment”
is unclear. A contractual entitlement to training does not mean that the worker is actually receiving any useful training. Under the Bill, for example, a worker could, if they were working in, let us say, a cold-call centre, undertake that work—that would be allowed—because it could be deemed the best way to learn on the job and be trained. In other words, if an individual’s work involved cold-calling, they could become skilled, as described in the Bill, simply by doing the job, and not actually having a separate training programme with accreditation requirements. The question then is: would this mean that they are entitled to a minimum wage? The Bill is unclear. Under the Bill, two people doing the same job could have different contracts. Consequently, one would be entitled to the minimum wage, but the other, having a contract for a training wage, would not. The danger therefore is that these provisions could be open to abuse.
I turn to the question of how we could go beyond apprenticeships. This involves the question of whether we have some form of accreditation, which is a real problem that the Bill does not seem to address. Were we to have accredited training in certain circumstances, we would probably end up going down the route of the old development rate, which was set out in 2006, and under which there were complex rules and conditions seeking to determine exactly what the training was. That would create real problems for employers, who would want to know what the conditions were and how they would work. Would the opportunities they are providing qualify for the training wage? We would have all these grey areas and loopholes sitting between the existing minimum wage and the training wage. That is a practical problem about which I, as a former employer in the private sector—obviously I remain an employer as a Member of Parliament—would be very anxious. I would not want to find that I am unintentionally breaking the rules or finding that the guidance from the Government has to be so specific and complex that I spend too much time trying to comply with a new set of regulations, when in fact the original system was simpler—so there are real practical problems with this suggestion.
Mr Chope
Instead of putting up Aunt Sallies, why can the Minister not address the question put to me by one of my constituents who is out of work? He is aged 24 and says that he would be willing to work as a trainee for less than the minimum wage—in other words, at a training wage—but at the moment is not allowed to do so. No employer can let him, because the apprenticeship wage only applies to much younger people.
Mr Prisk
I come back to the point that were we to consider expanding this provision, we would need to put in place a system robust enough not to create either the complications I described or the uncertainties that I, as an employer, would not want. The Bill fails to do this. I agree that we need to encourage training, but to be blunt with my hon. Friend, I do not think that his Bill fulfils that task.
Mr Chope
Will my hon. Friend specifically answer my point, because I will be writing to this constituent to set out the Government’s response to his plea that he should be given the freedom to take a training job at less than the minimum wage from somebody prepared to offer him that training?
Mr Prisk
I can understand that frustration, but the moment we make law on the basis of one instance, we create difficulties for the scrupulous. That is the risk we are talking about.
I turn to work experience and interns. I understand the frustration and concerns of my hon. Friend the Member for Gainsborough. Work experience, whether as a paid or unpaid intern, can be a valuable way for young people to get the experience, skills and confidence they need to start up. The Government want as many internship opportunities as possible to be made available, but we are clear that those who are entitled to the national minimum wage should get it. The example he gave of how he works as an employer accurately describes exactly that position.
Mr Prisk
The problem is that the practicalities affect the principle. That is an important point for my hon. Friend to bear in mind.
Section 3 of the Immigration Act provides for a foreign national’s lawful stay to be subject to conditions preventing his employment or occupation in this country. That is the basis of the UK’s controls on access to the labour market. Foreign nationals who are admitted specifically for the purpose of employment may be subject to conditions of stay which require them to seek authorisation to change their employment. Those who enter for another purpose—study, for example—may be subject to conditions which require them to seek a variation of their conditions of stay if they wish to remain for the purpose of work. The provisions in the Bill are the basis for arrangements for determining the circumstances in which an individual would be allowed to take employment or not, depending on their skills.
My hon. Friend’s proposal appears to remove any legal basis for the operation of an effective control on migrants’ access to the labour market, including the operation of a labour market test in respect of a migrant’s employment, except at the point at which they initially seek entry to the UK. The Bill would therefore significantly undermine the Government’s ability to regulate the entry and stay of foreign nationals, other than at the point at which they seek entry, or to protect the interests of resident labour.
My hon. Friend might well have intended the provisions in clause 1, in respect of recent refusals of applications to enter or stay, to protect against such issues. However, they would not satisfactorily achieve that effect. It is also difficult to see how such provision could be reconciled with the effective operation of transitional restrictions, to which the Government are committed, on labour market access to nationals of new member states of the European Union who are not subject to immigration control but, as foreign nationals, would be covered by the Bill.
Mr Prisk
I think the challenge is to make sure that the asylum system works properly, which is what my colleagues in the Home Office and elsewhere are doing—and doing very ably—despite the mess they inherited. That is the challenge we face.
The national minimum wage is a key part of the Government’s overall strategy to establish fairness in the workplace and to make work pay by ensuring that all workers receive at least a set hourly minimum rate. The minimum wage has brought substantial benefits to a large number of workers, especially women and part-time workers, and it has established basic minimum standards in the labour market. To make the minimum wage optional, as clause 2 suggests, could undermine those achievements and leave some vulnerable low-paid workers open to exploitation.
The Government also believe that the proposals in clause 3 are unnecessary. There are already options available to employers who wish to offer training but not to pay the minimum wage. Certain apprentices are entitled to a lower minimum wage rate. There are some specific exemptions in the law that relate to training—where, for example, an individual is on a specified Government or European scheme, individuals acting in that context as volunteers are not, of course, entitled to the minimum wage.
Making the minimum wage more complex through the introduction of regional rates would have adverse effects on workers and businesses, and make the task of setting and enforcing the minimum wage far more complex. The proposal would introduce potential unfairness for workers, particularly those located near to the boundaries between regions. It is worth noting that when one looks at the evidence, one sees that there is already significant variety within those regions.
As for clause 1, we believe that it would have an adverse effect on the operation of an effective control on migrants’ access to the labour market and would significantly undermine the Government’s ability to regulate the entry and stay of foreign nationals and so to protect the interests of resident labour.
For those reasons, if my hon. Friend seeks to press his Bill to a Division, I have to tell him and the House that the Government cannot not support its proposals.
Mr Chope
With the leave of the House, I would like to respond to the debate. It has been a good one and I am most grateful to everyone who has participated in it.
I begin by commenting on the Minister’s performance, as I think that Antony Jay and Jonathan Lynn would have been proud of what the Minister’s officials have been able to provide him with in the form of a “Yes Minister” script. The tone and content of what the Minister said was so reminiscent of that wonderful series, which was performed on television and is now a play in the west end.
I understand that clause 1 deals with issues that are not full-square within the Minister’s responsibilities. However, he says that it would raise all sorts of difficulties of definition, but it is quite obvious from the evidence I adduced earlier that the Government do not know how to count the people coming into the country or the ones going out; they do not know how many people have applied for asylum; and they do not know how many people have been waiting for their asylum cases to be dealt with for more than three months or for more than six months. The Government do not have the basic material before them, yet when I come forward and say, “Wouldn’t it be a good idea if people who were seeking asylum had the opportunity to improve themselves and work?”, all I get is a whole lot of gibberish saying that my clause 1 is defective in the following 1,000 particulars.
I am not having that, Madam Deputy Speaker. If the Minister’s intention was to provoke me into testing the opinion of the House on this Bill, he has certainly succeeded in doing so.
I want to comment briefly on my hon. Friend’s observations about some of the other clauses. He failed to answer my simple question about a constituent, aged 24, who is out of work, wishes to engage in a training contract, and is willing to do so for less than the minimum wage. I shall therefore have to send my constituent a blank piece of paper, which I shall identify as the Government’s policy on the matter. The Government recognise that there is a problem, but have no solution. My Bill presents a potential solution, and all that has happened is that it has been rubbished.
I told my hon. Friend in an intervention that he was seeing clause 2 far too much from the point of view of a person who was already in work rather than that of a person who was out of work and seeking it. That constituted another big failure in the Government’s response.
A number of my hon. Friends commented on the problems of youth unemployment and access to employment. I do not know whether the Minister is aware of the figures, but according to figures for 2010 produced by Doing Business, an organisation which
“measures and compares regulations relevant to the life cycle of a small to medium-sized domestic business”,
in June 2010 a 19-year-old worker in this country had a minimum wage five times higher than that of an equivalent worker in Poland, 2.5 times higher than that of an equivalent worker in France, 50% higher than that of an equivalent worker in the United States or Germany, and about the same as that of an equivalent worker in Ireland. If we want to find an answer to the ghastly issue—the really serious issue—of rising youth unemployment, we could do a lot worse than examine the international comparators, which make it plain as a pikestaff that we have too high a minimum wage for our young people, leaving aside the need to give them access to a training wage.
My hon. Friend the Member for Shipley (Philip Davies) was inimitable in his fairness. He emphasised the number of people who benefit from the national minimum wage, but also wanted to ensure that more people could become employed. He has been an employee in a very large firm, and he and my hon. Friend the Member for Northampton South (Mr Binley), who made so many cogent interventions, and my hon. Friends the Members for Wellingborough (Mr Bone) and for Bury North (Mr Nuttall) have a mass of experience of employing people and participating in the real economy of the country.
My hon. Friend the Member for Gainsborough (Mr Leigh), a former Chairman of the Public Accounts Committee, also made some potent observations. He highlighted the scandal over internships, but again the Minister did not answer the question. Why should it not be possible for someone who wishes to be an intern to be paid something between zero pounds and the minimum wage? There came no answer from the Government, apart from the rather patronising, patrician response that if we introduced such an arrangement, some people might exploit it. I do not think that that is a Conservative approach; I do not think that it is a market-oriented approach.
This has been a rather depressing occasion for me. My worst fears about a Government who are losing touch with reality have been borne out by what we have heard today. However, I think it important for the debate to continue, and I therefore invite the House to take a view on whether the Bill should be given a Second Reading.
Question put, That the Bill be now read a Second time.