Tony Lloyd
Main Page: Tony Lloyd (Labour - Rochdale)Employment Opportunities Bill
Tony Lloyd Excerpts
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.
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.
Tony Lloyd (Manchester Central) (Lab)
The hon. Member for Christchurch (Mr Chope) has an almost unique parliamentary role. I am never quite sure whether he is like an interesting piece of baroque architecture—delightful to look at, although I am not absolutely certain what the real purpose is—or whether he is at the dangerous end of the Conservative party, dragging it back to where it feels most comfortable. I feel sometimes that he is the latter. I know that he will be disappointed by the Minister’s indication of opposition to the Bill, but I hope that the Minister will indeed oppose it, because although I would support parts of it, this Bill is essentially a retrograde, unfortunate and, in the end, quite dangerous little piece of social legislation.
Nevertheless, there is a real debate to be had on these issues. It is a debate that ought to take place from time to time, if only to remind people of two things: first, why we need the national minimum wage; and secondly, just how unsympathetic and unreconstructed parts of the parties of Government are on such issues. The hon. Member for Christchurch and one or two of his hon. Friends who are going to speak later represent a significant body of opinion, not in the nation generally, but in the Conservative party. That ought regularly to be put on record to remind my own constituents and, for example, those of the hon. Member for Shipley (Philip Davies) just what a rotten, nasty party the Conservative party can be.
Philip Davies
I would be grateful if the hon. Gentleman could get away from the insults and on to the issues. Given that the national minimum wage has clearly been such a triumph, will he tell us what the adult and youth unemployment figures in this country were when the minimum wage was introduced, and what they are now?
Tony Lloyd
Those were not insults; they were matters of fact. We can debate facts, but we should not trade insults; that would not be reasonable. Mr Deputy Speaker, I am sure that you would deplore my insulting hon. Members, and the fact that you did not call me to order suggests that the basic fact that I have just described has now been established and placed on the public record.
Let us talk about the real impact of the minimum wage—
Tony Lloyd
Will the hon. Gentleman please be patient?
I shall begin by examining the Bill sequentially. I want to talk first about the part of it that I agree with. The hon. Member for Christchurch began his speech by talking about the impact of clause 1, and I had a lot of sympathy with what he said. We really ought to have a serious debate about this in the House, and I have urged the previous Government and this one to take the issue seriously. It makes no sense in a country such as ours to force into unemployment those asylum seekers who are willing to work and to make a contribution to their families, the wider community and the taxpayer. Sometimes, they are forced into worse than unemployment. As we know, the fact that we push asylum seekers into destitution is one of the drivers of prostitution and some types of crime. The hon. Member for Wellingborough (Mr Bone) made a valid point about women who are being trafficked into our society, and we ought to take that issue seriously.
Governments classically respond to the argument in favour of allowing asylum seekers to work by pointing out the danger of creating a magnet that will attract further waves of asylum seekers. The hon. Member for Christchurch was absolutely right to say, in response to the hon. Member for Shipley, that the problem with our asylum system is not that it operates as a magnet, but that we deal so slowly and incompetently with the processing of asylum cases. This was the case all through the years of the Labour Government, and, sadly, it is still the case now. We need rapid resolution of those cases.
Let us take the example of a woman who is legitimately claiming asylum because she has been forcibly trafficked from the far parts of eastern Europe, or wherever, and forced into prostitution in our society. She has no capacity to return home and genuinely fears for her life and for her family back home. We need to be able to say to that woman, “Yes, you are a genuine asylum seeker and you can play a constructive role in our society.” We also need to say to the illegitimate, bogus asylum seeker, “Please return quickly to where you came from.”
There is real merit in having this debate. Even though I disagree fundamentally with everything else in the Bill, I profoundly agree with the hon. Member for Christchurch that we need to have a debate on this subject. We need to debate not only what a civilised society ought to be, but what is practical and proper for our society. In fact, I would go further and suggest that there should be an expectation on legitimate asylum seekers to begin a process of finding work, because that shows commitment to the values and the ethos of our society. That would create a good two-way set of responsibilities, which relates to the proposal in clause 1. Alas, the rest of the Bill does not have the same merit as that first part.
It is always delightful to listen to the hon. Member for Christchurch. He always offers us an entertaining race around the now rather worn and old economics textbooks from the 1920s, the 1870s and the 1850s. Those books are now a little thumbed at the corners, but they are still interesting to read because they shed some light, not so much on the working of a real economy in the 19th century, and still less in the 21st, as on the thinking of those who suggest that the Bill is about freedom. It is not about freedom; it is about taking away social protection for vulnerable people in our society, and that is what we need to talk about.
That is the nub of the intellectual debate about the merits of free-market economics versus what the hon. Gentleman would call the crushing hand of state socialism. Were the minimum wage an example of the crushing hand of state socialism, some Labour Members might be a little happier with the direction of travel in our society’s support for the vulnerable and its recognition of the relationship between those in the most powerful economic positions and those at the bottom of that pile.
Mr Nuttall
I am pleased to hear the hon. Gentleman’s welcome for clause 1. Does he think that asylum seekers and others covered by the clause should have the right to work for less than the minimum wage if other people should not?
Tony Lloyd
No. If that is what the hon. Member for Christchurch is proposing, I have absolutely no sympathy with that view. The reason for having a floor is the ambition to prevent the undercutting of wage rates for individuals, whether they are born nationals, as the hon. Gentleman would have it, or asylum seekers. The suggestion that the hon. Member for Bury North (Mr Nuttall) has just made lacks merit because it would erode the whole concept of a minimum floor below which people ought not to be expected to fall.
I want to deal with the argument put forward by a number of Conservative Members that it is legitimate to do away with that floor. They have cited reasons of competitive pressure and the black economy, to which the hon. Member for Northampton South (Mr Binley) referred. Of course we know that the black economy exists and that it exerts a dangerous influence at the bottom end of the labour market, but we do not want to make it a model for how we deal with the whole economy. We should be seeking to get rid of the black economy, rather than institutionalising it by getting rid of social protection relating to wage rates.
That same black economy erodes health and safety standards at work. In my somewhat distant youth, I worked for companies that thought health and safety was an optional extra, and that put my life and those of other employees seriously at risk. The minimum wage and health and safety legislation all form part of the same debate, which we have had many times. I know that different views exist, but I believe in a proper floor below which people in a decent society should not be allowed to fall.
Mr Binley
Does not the hon. Gentleman recognise that most employers want good employees? If they want good employees, they have to look after them. The great majority of employers in this country, certainly in the small and medium-sized enterprise sector, think in that way. The suggestion that all employers are evil, which seems to be emanating from the hon. Gentleman, is absolute nonsense. Will he admit that?
Tony Lloyd
I do not have to admit that, because I have not indicated that that is what I believe. Of course there are many good employers, and they should not be forced to face competitive pressures from the unscrupulous ones who would undercut them. That is the reality in the black economy; it would also be the reality if we had a differential or arbitrary minimum wage rate. That would result in the good employer who wanted to pay his or her employees a decent wage being undercut in the marketplace by the rogue employer. Of course I am not claiming that rogue employers are in the majority, but, sadly, they exist in many different areas of our national life. That is why we have to have floors through which people must not fall.
The hon. Member for Shipley asked me about unemployment rates. I cannot quote him the figures, but I am sure that when he makes his own speech, he will probably have them to hand. Let me tell him something that I know he will disagree with profoundly: nobody has demonstrated any link between the levels of unemployment in our society and the introduction of the national minimum wage. The last person who I think tried to put that concept forward was the former Member for Folkestone and Hythe and sometime leader of the Conservative party—perhaps I should call him the noble Lord Howard. He once claimed in a debate about the minimum wage that it would see the loss of 500,000 jobs, only to claim later that it would result in 1 million or 2 million job losses. When it was brought in, in 1999, we did not see that impact on employment; indeed, we saw employment levels rising.
Mr Bone
As usual, the hon. Gentleman makes a powerful speech in line with his beliefs. To put the record straight, he talks about what the then Michael Howard said, but at that time the Labour party was promising to bring in the minimum wage at a much higher rate than it actually did. If it had been brought in at that higher rate, it would have resulted in more unemployment.
Tony Lloyd
That simply does not square with the facts. I lived through that period and, more importantly, I was a member of Labour’s employment Front-Bench team that began to develop national minimum wage policy and I can think of no occasion when we over-promised on the national minimum wage. Indeed, the hon. Gentleman should know that some people now feel that the Labour party under-promised what it might have done across a whole range of issues in those early days; it certainly did not over-promise. If he went back to check the record, he might want to acknowledge that he got this wrong.
Mr Thomas
As ever, my hon. Friend makes a strong and powerful case. Given his experience in helping to devise the minimum wage policy, does he recall the decision at the conference of the Federation of Small Businesses in 1997 to support a national minimum wage sensibly negotiated? Is that not a sign of the support that existed for the introduction of the national minimum wage at the time and a reason why it continues to have strong support from business?
Tony Lloyd
To be totally frank with my hon. Friend, I do not remember that, but I am very grateful to him for reminding me. He makes a very important point. The idea that the minimum wage is some kind of creation by the ultra-left or the most luddite of trade unions is ridiculous. The minimum wage has had support and continues to have support across a whole range of different groups in our society, including groups representing small businesses. The Low Pay Commission comprises people not just from one side of the employment divide; employers are represented on it and they play a constructive part. As Conservative Members will know, those employers have been supportive of the changes in the level of the minimum wage over time.
Mr Binley
I recognise the hon. Gentleman’s great experience in these matters. He will remember—I believe this to be true—that the Federation of Small Businesses did not come to that position until after the will of the Government had been made absolutely clear, when it became politic from its perspective to adopt it. Is that not the truth of the matter?
Tony Lloyd
I am in some difficulty there in that having admitted that I did not remember the FSB making the decision in the first place, I am reluctant to claim that I know how it made that decision.
Let me use the hon. Gentleman’s point as an important example. He is describing circumstances where groups of people can be coerced by political pressure into making a decision that runs counter to their own best interests. That is the line of argument he adopts about the FSB—that it was dragooned by greater power into making that decision. Is that not precisely the problem with what the hon. Member for Christchurch wants in the workplace? Cannot unscrupulous employers say to weak individual employees—people weak in the sense of their bargaining position relative to their employer—something like, “I, your employer, want to persuade you that it is in your interest to drop your wages below the minimum wage”? It is very difficult to accept that as a legitimate element in the Bill, as we know that unscrupulous employers do that to their employees. I think the hon. Member for Christchurch referred to “the regular plodders” or used some term like that. Some people in our society do have genuine social difficulties in negotiating their wages and they need our protection; they do not want us to take away the minimum floors that protect their wage rates.
Mr Binley
I thank the hon. Gentleman again for being generous in giving way, but is he not perverting the meaning of the clause, which makes it quite clear that this happens only when an employee, not an employer, wants to argue for a lower wage. Is that not the truth of the matter? Is the hon. Gentleman saying that unscrupulous employers throughout the nation will go out to their employees and in some way victimise them and force them to argue for that? Is that what he expects us to believe?
Tony Lloyd
I do not know what the hon. Gentleman believes as it can be quite difficult to work it out, but I suspect that we do not have much in common on these issues. Yes, I do think there is a real danger of that. I know it, as I have worked for employers who were extremely dubious in their labour practices. I know that when people are young and inexperienced and they need the work, it is difficult for them to say to an employer, “No, I will not do that.” The hon. Gentleman might be surprised to find out that that is why trade unions grew up—because people needed collective protection. It is why trade unions and political parties like the Labour party campaigned for a national minimum wage—because people at the margins in our economy need that collective support, through collective action or by legal support. Indeed, it is why the Government Front-Bench team has been persuaded of the need for a national minimum wage. If the Government did not believe in the need for a basic floor below which people cannot fall, they would not have opposed the Bill and supported the national minimum wage.
There is a gulf in understanding of how the world of work works between the hon. Member for Northampton South and myself—and ever may it remain thus, as our experience might have been different. Perhaps he has met only benign and happy employers—I am sure he was one of them—but I have met some quite malign and quite nasty employers. One day, I will perhaps buy the hon. Gentleman a half pint of our subsidised beer and tell him all about it.
Mr Binley
I look forward to that and thank him for the half pint. Does the hon. Gentleman not recognise, however, that unless an employer has working people who want to do the job and want to be involved, he will not get the sort of work out of them that he clearly needs—especially in the SME sector?
Tony Lloyd
The hon. Gentleman rightly pushes me to refer to some of the realities. Let us go back to the time before the national minimum wage. Let us go back to a time when young hairdressers in cities like Manchester were being paid under £1 an hour. Why did they take that work? Because they were young people who felt that they had to buy into the workplace. They had to accept way below any acceptable level of remuneration and way below an income that anyone could seriously live on in the hope that it would give them the experience to carry on in the trade. That was wrong then and it would be wrong if we were to bring it back again. That is the reality of what the Bill would do. It would take the clock back to a time when bad employers were prepared to compete unscrupulously against the better employers at the expense of their employees.
I am totally on board with the hon. Member for Northampton South in advocating the point that good employers work well with their employees. In many cases, good employers train, pay reasonably and provide acceptable working conditions. I have worked for good employers: but not all employers are good; not all employers are acceptable; not all employers operate proper health and safety standards; not all employers offer an acceptable wage for people to live on. That is why we have a floor through which people should not fall.
Philip Davies
I assume from the hon. Gentleman’s earlier comments that he accepts that unemployment is higher now than it was when the minimum wage was introduced, although he could not bring himself to say so. Does he also accept what was said by my hon. Friend the Member for Christchurch (Mr Chope), namely that if the level of the minimum wage is so important, the hon. Gentleman will support the Government in ensuring that people who earn it need not pay any income tax or national insurance?
Tony Lloyd
As I do not support the Bill in the first place, I am not sure how I could be expected to support certain parts of it. However, the ambition to remove taxation from the lowest paid is an excellent one. If the hon. Member for Shipley will support me in trying to ensure that the higher paid make a bigger contribution, it will be easy for us to relieve the low paid of their burden.
The hon. Gentleman’s intervention has led me to another point that I was going to make. If the hon. Member for Christchurch were willing to drop most of his Bill while incorporating my proposal for a high pay commission to ensure that the top rate of pay is reduced, I would feel able to support the first part of it, and we might then be in business. However, I suspect that my views on high pay are as hard for him to accept as his views on low pay are for me to accept.
Let me say something about the economic arguments that the hon. Member for Shipley has invited me to consider. When the Better Regulation Executive investigated the impact of the national minimum wage, it found no link with levels of employment and unemployment. I fear that unemployment will begin to increase, but an interesting aspect of the way in which the labour market has operated recently is the fact that those in work have remained in work much more consistently than was the case during earlier recessions. That is almost certainly partly due to levels of flexible working, but it also belies the proposition that the minimum wage has served as a disincentive to employment, because had it done so the existing work force would have been undercut by would-be entrants. That throws a cloud of doubt over the argument about the operation of free markets at the bottom end of the labour market.
A more important finding by the Better Regulation Executive was that paying a national minimum wage conferred an overall benefit on our economy. The minimum wage has important regional impacts, which is why the idea of a regional differential is ridiculous. The clue lies in the phrase “the United Kingdom’s national minimum wage”. We are indeed a United Kingdom, and the national minimum wage is national. There are good and profound reasons for that. The national minimum wage prevents the dislocation, already too prevalent in our economy, between the overheated south-east and other parts of the country.
I cannot go as far as the hon. Member for Christchurch in describing those other parts of the country as the “more remote” regions. Those of us who live in such regions do not feel that they are particularly remote. However, we “remoters” feel strongly that the people whom we represent and the economies in which we work should enjoy the same level of protection and the same capacity for operation of the minimum wage, partly—indeed, if for no other reason—because it is important in creating regional demand. That is one reason why groups such as the Better Regulation Executive have found that the national minimum wage is, overall, in the national economic interest.
Mr Bone
The hon. Gentleman is, again, generous in giving way.
If we view the minimum wage in terms of what it can buy rather than the actual amount involved, it is clear that it is worth a great deal more in the hon. Gentleman’s constituency than it is in, say, London. Might that be an argument for two different rates? I do not know the answer, but I should like to hear what he thinks.
Tony Lloyd
That is a genuine issue for debate. It is obvious that it is much easier for someone to live on the minimum wage in, for instance, the north-west of England than in central London. That is why the Mayor of London has begun to advocate strongly—I think I agree with him on this—the introduction of a living wage, which does not simply enable people to operate at or below some notional national level, but recognises such factors as housing costs. However, we must still maintain a national floor through which people cannot fall.
Nick Smith
I congratulate my hon. Friend on what I consider to be a sensible defence of the minimum wage. Does he agree that the Bill’s “bob a job” wages plan would dramatically undermine it, particularly in areas such as mine in south Wales, where it helps to boost local economies?
Tony Lloyd
That is the point that I was making about the word “national”. It ought to be recognised that, in one nation—whether we measure it from the tip of Scotland to the far south or from the west to the east—we are all in this together. We cannot have an economy that is dislocated. Although the last Labour Government got some things right and introduced some valuable measures, they failed to wrestle successfully with the regional impact of economic decisions. The dash for the City over-emphasised the needs of a particular region of the south-east at the expense of the rest of the economy. The level of the pound proved disadvantageous to manufacturing industries: it hurt south Wales, parts of the north of England, and even parts of the traditionally industrial midlands. There are significant reasons for our failure to operate entirely effectively in relation to the national economy, and, as my hon. Friend suggests, we should not lose sight of the important role of the national minimum wage in that context.
Let me say something about the training opt-out. The hon. Member for Christchurch did not mention the fact that when the minimum wage was first introduced in 1999, there was also a six-month training discount called the development rate. In 2005, the Low Pay Commission recommended that it should be discontinued, because it had become totally discredited. Not only was there no evidence that employers claiming the discount were training employees; there was evidence that they were not training. As my hon. Friend the Member for Harrow West (Mr Thomas) pointed out to the hon. Member for Christchurch, the Bill contains no provision guaranteeing the quality of even the quantity of training.
There are important issues that the House should debate in relation to how we train in our society. I have strong views with which even my party’s Front Benchers may not always agree. For instance, I still believe that we should consider imposing a training levy on those who will not train. As things stand, a freeloading bad employer can undercut a good employer by refusing to train, and can then poach the product of the good employer’s training. We ought to think about those issues, but I do not think that we should do so in the way proposed by the hon. Gentleman. I do not believe that the Bill will produce different results from the old development rate. There were good reasons for getting rid of that, and I think that he should think carefully about what he has advocated in his Bill. It simply would not work. It would operate as a perverse incentive for rogue employers, and I do not think that we should give them incentives.
This has been an interesting debate, and I shall now draw my remarks to a conclusion as I know that other Members wish to contribute to it. In a way, I hope the hon. Gentleman does press the Bill to a Division, as it will be interesting to count Members through the Lobbies, although I suspect that there will not be enough of us around today for that to be a defining moment in the political history of our Parliament and the economic history of our society.
I do not think the hon. Gentleman is a mean-spirited human being; I say that genuinely, although I cannot say it of all the people who advocate effective gouging of the minimum wage structures. I think his view of how the modern economy works is profoundly wrong, however. It is important that we debate this matter from time to time because although some Conservative Members do not believe this, it is a tough, tough world out there for those at the bottom. We should not return to a tough world in which young kids are paid less than £1 an hour, and adults are paid between £1 and £2 an hour, because that kind of society is both irresponsible and, at best, amoral. We want a society that has basic social standards for all our citizens, and where we can say to our young people, “Get into the world of work because you will be paid well.” We want a society where the “regular plodders” to whom the hon. Gentleman referred are not forced to work hour after hour to take home an unacceptable level of pay, but can be paid a dignified wage because they contribute in the best way they can. That is the kind of society to which we ought to be aspiring, and it is not so very difficult to achieve, but it would be a lot more difficult if we were to accept the premise of the Bill.
Philip Davies
The hon. Gentleman should know that my hon. Friend is never swayed by my opinion on anything, so whatever I say will not influence his decision. I do not know why the hon. Gentleman thinks everybody else is as lily-livered as he clearly is on controversial matters. All I can say to him and to my hon. Friend is if my hon. Friend does decide to press the Bill to a Division, I will vote for it. I do not think I can make my position any clearer than that.
When the national minimum wage was introduced it was not supported by my party or the Liberal Democrats, as we had a principled objection to it. Like my hon. Friend the Member for Christchurch, I am interested to hear the Minister’s view on this. Mine is that that principled objection turned into expedient support for the minimum wage, but I am sure that the arguments that were relevant then remain relevant today.
We were told that the minimum wage would not make any difference to employment levels. Given that over the following eight years there were higher levels of employment and lower levels of unemployment, it was taken as read that the national minimum wage must have no negative impact on employment. Given that we all want people to be properly rewarded for the jobs they do and that no politician wants to argue for lower pay for people, we have a political consensus on this matter. However, during those eight years there were high levels of economic growth, so it was inevitable that employment levels would rise in that period, with or without a national minimum wage. This clearly has not crossed the minds of Labour Members, but even more employment may well have been created if there had not been a national minimum wage. I used to work in the supermarket industry and retailers in that sector made it clear that about 100,000 extra jobs would probably have been created without a national minimum wage during that time. The fact that the employment level rose during that time does not mean that it was caused because of the minimum wage; it probably occurred despite the impact of the minimum wage.
The real test of a national minimum wage was always going to come when we came to an economic slow-down. It is very easy for employers to maintain those employment rates in good times, but the test was always going to come during a downturn. There are legitimate concerns now about the effect of the national minimum wage, and it would be irresponsible for us to ignore them, even if it would be expedient to do so.
I must make the point that I was never supportive of the principle of the national minimum wage. I think that the payment of an employee by an employer should be a private matter and that if someone is happy to do a job for a certain wage, it should not be any business of the Government to prevent them from doing that job. However, I have to accept that that philosophical argument was lost some time ago, so my concerns are now based on the minimum wage’s practical and unforeseen impact on some of the most vulnerable people. The people who are most disadvantaged by the national minimum wage are not the unscrupulous employers. As my hon. Friend the Member for Christchurch so eloquently said, such employers are still alive and kicking in the black economy; they are still employing people and paying them below the minimum wage. The people who are most disadvantaged by the national minimum wage are the most vulnerable members of society. My concern is that the minimum wage prevents those people from being given the opportunity to get on the first rung of the employment ladder.
The great myth when the minimum wage was introduced was that people who are paid low wages are paid those low wages for the rest of their career. Many people have been paid a low wage to begin with and that has given them some work experience which has allowed them to move up the employment ladder to get higher quality jobs and better wages. My concern is that the first rung on the jobs ladder is far too high for many of the most vulnerable people ever to reach and they are thus unable to move further up. I shall set out an example that I am able to give, having spoken to people in this field.
Let us consider an employer who needs to take someone on and can choose between a former prisoner and someone who has never been to prison. In the real world, who is the employer going to take on, given that they would have to pay both these people the same wage? I suggest that 99 times out of 100 the person who has not been to prison will get the job. As the employer would have to pay both these people the same wage, why would they give the person who has been to prison a chance? The only way the former prisoner would be given a chance by the employer is if the employer was able to say, “I’ll give you a smaller amount for a certain period of time and we’ll see how it goes. If you prove yourself, I’ll move you up.” The employer is not being given that opportunity as that flexibility is not available, and that is preventing certain people from being able to access employment. Consequently, many of these people—even the ones who want to get a job—cannot find employment and so they commit crime again and add to the problems in society.
I went to visit a charity called Mind in Bradford a few years ago. One of the great scandals that the Labour party would like to sweep under the carpet is that in this country only about 16%—I stand to be corrected on the figure—of people with learning difficulties and learning disabilities have a job. The others are unemployed, but why is that? I spoke to people at Mind who were using the service offered by that charity, and they were completely up front with me about things. They described what would happen when someone with mental health problems went for a job and other people without these problems had also applied. They asked me, “Who would you take on?” They accepted that it was inevitable that the employer would take on the person who had no mental health problems, as all would have to be paid the same rate. Given that some of those people with a learning disability cannot, by definition, be as productive in their work as someone who does not have a disability of that nature, and given that the employer would have to pay the two people the same, it was inevitable that the employer would take on the person who was going to be more productive and less of a risk. The situation was doing the people with learning difficulties a huge disservice.
As I said at the start of my remarks, the national minimum wage has been of great benefit to lots of low-paid people. However, if the Labour party is not even prepared to accept that the minimum wage is making it harder for some of those vulnerable people to get on the first rung of the jobs ladder, we will never get anywhere in trying to help these people into employment.
Tony Lloyd
The hon. Gentleman’s arguments are always seductive—they are wrong, but they are very seductive. How low would he be prepared to drop those wages? If someone with learning difficulties was only a quarter as productive as the competing would-be employee, would he be prepared to drop their pay rate to a quarter of the minimum wage? Should it drop to less than a quarter? What is his floor?
Philip Davies
I made my position clear in my earlier remarks but, given how uninteresting I am, I forgive the hon. Gentleman for perhaps nodding off during that section. I did make it clear at the outset that I did not agree with the national minimum wage in principle. I said I thought that what somebody was prepared to work for and what somebody was prepared to pay was a private matter between two people and it should not be interfered with by the Government. The big difference between him and me is that I would much prefer the person with the learning disability to be given the opportunity to get a job, do something worth while and contribute in a way that they want to, whereas he would prefer them to be sat at home, unable to get a job in the first place. He may think that he is taking the moral high ground by believing that it is far better for these people to be sat at home unemployed without any opportunity, but I do not
Tony Lloyd
The hon. Gentleman avoids the question. If there is no floor, people will be paid wages that would be an outrage in our society. If he wants to protect people, he can do so in other ways—he can offer supported employment and he can offer subsidised employment. As you know, Mr Deputy Speaker, our society has on many occasions offered the concept of the “sheltered workshop”—that may not be a good modern term—and we ought to think about that.
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.
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.
Philip Davies
I have given way enough to the hon. Gentleman. I want to crack on because other Members want to speak. I put Labour Members’ attitude down to their being misguided. I know that the hon. Gentleman was a university lecturer. I am not sure that I class that in the wealth-creating sector. Perhaps we will debate that in the Tea Room afterwards.
Labour Members have the attitude that basically the only way for businesses to make a profit is to screw the customers and the employees into the ground as much as possible; that that is the secret for businesses in making as much money as possible; and that, if it were not for the Labour party intervening at every possible opportunity, across the country the customer and the employee would be squeezed and fat cat businesses would make massive profits. I genuinely think that that is their view of the world. That may be the view in the Victorian age that the hon. Gentleman lives in, but in the modern world that is not how business works. That is not how to make money as a business.
In the real world today, the hallmark of successful companies—the thing that they have in common—is that they look after their customers and their employees. The thing that failed businesses have in common is that they do not look after their customers and their employees. That tends to be what differentiates successful and failed businesses. I am sorry that, still in this day and age, the Labour party has not woken up to the fact that, to be successful in business, people have to look after their staff and customers and that, if they do not, they will go out of business.
Tony Lloyd
I think that the hon. Gentleman is proposing that we should not have taxation below the levels of about £11,000 or £12,000 a year. I think I would go along with that, but there would be a consequence: we would have to find the tax elsewhere and it would probably mean looking at those on high incomes, not those on middle incomes, to fill that gap. I wonder whether he would join me in saying that there should be a bit more tax on the high earners and a lot less on the low earners. We might have a good deal.
Philip Davies
I congratulate the hon. Gentleman on his ingenuity in trying to debate his own Bill before it gets the chance to get off the ground. I will not incur your wrath, Mr Deputy Speaker, by debating that other Bill.
Tony Lloyd
My hon. Friend might also want to confirm that the number of people in employment is far higher today than it was at the time of the introduction of the national minimum wage.
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 Peter Bone (Wellingborough) (Con)
It is a great pleasure to follow the shadow Minister, the hon. Member for Harrow West (Mr Thomas), who put the official Opposition’s case clearly and well—I hope that he continues to do so for many years. I congratulate my hon. Friend the Member for Christchurch (Mr Chope) on introducing such an interesting and productive Bill that has found support on both sides of the House—not in total, but in part. On the decision whether to vote on the Bill today, I should say that I, as a parliamentarian, believe that the will of the House should be expressed. However, I completely understand why the shadow Minister is jumping up and down asking for a vote. He does not really care whether this gets a Second Reading. He has already written a press release that says, “Nasty Tories divided over minimum wage. The real Tories want to abolish it”, which is nowhere near the truth, of course—the Bill in no way abolishes the national minimum wage. I shall, at the moment, be supporting the Bill wholeheartedly.
Tony Lloyd
Having quoted this press release—“Nasty Tories divided over the minimum wage”—the hon. Gentleman seemed to challenge the division over the minimum wage, not the concept of them being nasty Tories. Can he clarify that?
Mr Bone
I am not sure I really understand the hon. Gentleman’s point, but “nasty Tory” is clearly an oxymoron.
I plan, at the moment, to support the Bill, but of course we have not heard from the most important person in the House, the Minister. Many people would say that the Minister is one of the best in Parliament, and I would entirely agree with that. In fact, others would say that he is the Jim Hacker of Parliament. His Ministry is the closest to the Department for Administrative Affairs in “Yes Minister”, and he is responsible for getting rid of regulation and red tape, which is in part what this Bill would do. Everybody thinks that “Yes Minister” shows what really happens in this place, but of course, Jim Hacker went on to become Prime Minister, so I hope that the Minister will not forget me in future.
I refer Members to my entry in the register and the fact that I am a fellow of the Institute of Chartered Accountants in England and Wales. I want to take the politics out of this debate, or at least out of my speech. I have never doubted Opposition Members’ sincere concern about low-paid people and the unemployed; I just think that the policies that they propose do the opposite of what they want. Every Labour Government have left power with unemployment higher than when they came to power. That is not because Opposition Members set out to do that or because they did not care passionately about unemployment; it is because their policies lead to unemployment.
I happen to have with me the Library figures for the constituency of the hon. Member for Blaenau Gwent (Nick Smith). In April 2006, unemployment in his constituency was 1,917, but in April 2010, when Labour left power, it was 3,202, which is an enormous increase. After a year of this successful coalition Government, the figure has dropped to 2,955. I do not say that in any way to make a political point; I just think that the policies that the Opposition pursue sound good, but result in more unemployment.