Employment Opportunities Bill
Debate between Tony Lloyd and Brian Binley
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.
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.