DCSIMG

MP in call to scrap national minimum wage

A YORKSHIRE Conservative MP has called for the abolition of the national minimum wage, because he believes it is making it harder for people with criminal records or mental health problems to find work.

Although Philip Davies, the MP for Shipley, stressed that his views were not Conservative party policy, he believes employers should be allowed to decide how much they pay their staff.

He said: "Because an employer must pay the national minimum wage, it is less likely that they would be prepared to take a chance on a former prisoner looking for a job, somebody with no qualifications at all, or somebody with mental health problems.

"I believe it is leading to some of the most vulnerable people in our society finding it harder than ever to find a job and, being left on a lifetime of welfare which is not good for them and certainly of no benefit to society as a whole."

His comments were condemned by Jamie Hanley, a partner at Leeds-based trade union law firm Morrish & Co, who said the minimum wage had improved living standards for the lowest paid workers, and helped to narrow the pay gap between men and women.

Mr Davies compared the imposition of the minimum wage to policies such as joining the ERM and the establishment of the Child Support Agency.

"All had cross party support and all proved to be disastrous in their own ways,'' he said. "A political consensus is usually a reflection of the fact that the policy concerned is well meaning and popular.

"It does not necessarily mean it is right and that I fear is the situation with the national minimum wage which is supported by all parties in Parliament, including my own.

"When the Government introduced the national minimum wage in 1999 both of the main opposition parties opposed it due to fears that it would lead to people losing their jobs. Given that the following eight years saw higher levels of employment and lower levels of unemployment, it was taken as read that the national minimum wage must not have any negative impacts on levels of employment."

However, those eight years saw high levels of economic growth, so it was always inevitable that employment levels would rise, Mr Davies argued.

He added: "It may be that even more employment would have been created without the national minimum wage. The real test of it comes during an economic slowdown, and I think there are legitimate concerns about the effect of the national minimum wage which it would be irresponsible, even if politically expedient, to ignore, especially during a recession."

Mr Davies said he believed that payment between an employer and employee should be a private matter.

"If someone is happy to do a job for a certain wage I don't believe it should be any business of the Government to prevent them from so doing.'' he said.

"My biggest concern about the national minimum wage is that I fear it prevents the most vulnerable of all from being given a chance. Before the national minimum wage, although some people were paid extremely poor wages, very few people were paid those wages for the entirety of their working lives. People would be paid those low wages for a relatively short period which would give them the experience they needed to move on to higher paid jobs."

Mr Davies said he feared that, due to the national minimum wage, the first rung on the career ladder had become too high for many people, particularly those who had been in prison or had long-standing health problems.

He added: "Those who feel this problem does not exist need only look at the figures for the numbers of people who have been on incapacity benefit for five years or more.

"In 1997 this figure stood at 47,000; today it is more than 1.5m. Clearly we are seeing far more people who are finding it difficult to access work at all and I believe this is linked to the introduction of the national minimum wage.

"The insistence on the current figure of 5.73 per hour for a national minimum wage by the Government is clearly a nonsense as anybody working full time at this level has to pay tax on their earnings back to the Government. Surely somebody paid the minimum amount allowed by law should be exempted from taxation; otherwise it must be the case that the national minimum wage is set at a level too high."

Mr Hanley, whose firm acts for a number of unions, including the TGWU, said the minimum wage had helped to stop workers being exploited and reduced poverty.

He added: "I think the evidence is pretty clear – for the best part of a decade the most vulnerable and low paid have seen their wages increased in a modest yet meaningful way when compared to increases in average earnings.

"Women, younger people, those with disabilities and those working part-time benefited most. The pay gap between men and women has narrowed and for those who were previously the lowest paid, the impact has been very significant indeed."

He said that before the minimum wage was introduced many workers were trapped by "poverty pay".

He added: "There was no incentive for employers to train or develop and no opportunity for the kind of advancement Mr Davies refers to. If the national minimum wage was scrapped, reduced or left to 'wither on the vine' it would push the most vulnerable in society into poverty."

It would also reduce the revenue raised through tax and, given that those earning less tend to spend more of their earnings, it would take money out of the economy, Mr Hanley argued.

"The independent Low Pay Commission has been at the forefront of the search for evidence of any damage caused by the national minimum wage to the economy or to jobs. In their most recent report, they confirm they have found no such evidence."

APPEAL FOR FREEZE

There are three levels of minimum wage: 5.73 per hour for workers aged 22 years and older, 4.77 per hour for workers aged 18 to 21 inclusive, and 3.53 per hour for workers under 18, who are no longer of compulsory school age.

Neil Turton, the chief executive officer of Scunthorpe-based Nisa-Today's, is one of a number of industry leaders who have called for the minimum wage to be frozen for a year.

He added: "While we understand the need for a national minimum wage, businesses in the UK are facing uncertain economic times and many are experiencing the combination of recession and increasing employment costs."

Nisa-Today's, Britain's largest buying group for independent retailers, is a member of the Association of Convenience Stores (ACS), which has written to the Low Pay Commission to highlight its concerns about the impact of a rise in the minimum wage.

 
 
 

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