15th December 1992.
" ONE in four workers who approached the Scottish Low Pay Unit in the
past year was being paid below the legal minimum rate set by the wages
council.
This fact was highlighted in a ''Food for Thought'' survey carried out
for the pay unit by Roy Wood, senior lecturer at the Scottish Hotel
School in Strathclyde University.
The report comes at a time when the Government is intent on pushing
through Parliament legislation which will abolish the 26 wages councils
still in existence.
Wages councils were established in 1909 with the support of Sir
Winston Churchill who told the Commons it was required to protect
low-paid workers from unscrupulous employers.
But the present Government denies the lower paid require this
protection. Michael Forsyth, Minister of State at the Department of
Employment, who is responsible for the Trade Union Reform and Employment
Rights Bill which covers the abolition of the councils, wrote in a
letter date December 10: ''There is no good reason to believe that the
abolition of wages councils will lead to widespread reductions in pay .
. . It is of little help to workers to saddle employers with
bureaucratic requirements which do nothing to encourage enterprise and
initiative.
The letter went on: ''Most of the workers covered by wages councils
are not poor; many work part-time and live in households with two or
more earners.'' Mr David Stark, the recipient of the letter, and an
official of the Transport and General Workers Union, however does not
agree with the Minister.
He said: ''Unfortunately there are a number of unscrupulous employers
who will take advantage of the absence of wages councils to cut wages.''
The author of the survey, Mr Roy Hood, said: ''I believe wages will
decline. Some employers will cut the hourly rate and there will also be
a general decline in the real value of wages over a period of years.''
The Scottish Low Pay Unit believes that existing evidence does not
back up Michael Forsyth's assertion. It points to numerous workers who
are not covered by wages council rates and who earn even lower than the
average of just over #3 an hour set by the councils.
It has examples of security guards who earn #1.70 an hour and have to
work 100 hours a week to earn a wage. It points to young receptionists
who are paid as little as #1.50 an hour, and the worst example of low
wages which the unit has on its file is that of a third-year apprentice
car mechanic who is paid #1 an hour.
Morag Gillespie, of the Scottish Low Pay Unit, said: ''There is
considerable evidence which suggests that once wages councils are
abolished wages will indeed be cut. The latest checks show that one in
10 workers covered by wages councils are underpaid. Take away the
protection of the councils and the wage levels could plummet even more.''
More than 200,000 Scottish workers are covered by wages councils
including those in hairdressing, retail trades, hotels, and restaurants.
Wage rates set by councils vary between #100.81 for a 39-hour-week in
the button manufacturing industry to #120.90 in tailoring.
David Stark, who is a member of the aerated waters wages council,
explained how the councils operate. He said: ''The councils are made up
of equal numbers of employers' and workers' representatives plus three
independent members who are appointed by the Secretary of State for Employment. Both sides put their case for a new wage rate to the
independent members then retire to separate rooms. ''Independent council
members can call either side back in and ask for further information.
The independent chair then puts their proposals to the full council and
it is voted on by both sides. This means that the new rate is set by the
independent members.''
At the recent aerated wages council of which David Stark is a member,
the council agreed an 11p hourly increase giving new hourly wage rates
of #3.08 -- #123.20 for a 40-hour week. He said: ''We are fortunate that
in this industry most of the large companies have trade union agreements
and the council rate is only a benchmark. But in many other industries
where there are no union agreements employers will exploit the absence
of the council.'
Michael Forsyth does not agree. In his letter he writes: ''Without the
councils, wage rates will adjust to suit local economic circumstances .
. . businesses themselves are best able to judge what they can afford
and what levels of pay are necessary to recruit and retail suitable
employees.'' The Government expects to guide the legislation through
Parliament within the next nine months and be in a position to abolish
the councils a few weeks later.
The Low Pay Network, which is campaigning to save the wages councils,
believes it is a contradiction for Mrs Gillian Shepherd, Employment Minister, to have overall responsibility for this legislation when she
also has responsibility within the Cabinet for women's issues.
It points out that the industries covered by the councils ''tends to
employ significant proportions of women especially on a part-time
basis.''
Winston Churchill, in his capacity as President of the Board of Trade,
was responsible for introducing wages councils and had this to say on
the subject. ''. . . where you have what we call sweated trades, you
have no organisation, no parity of bargaining, the good employer is
undercut by the bad, and the bad undercut by the worst . . . where these
conditions prevail, you have not a condition of progress, but a
condition of progressive degeneration.
But then Sir Winston always was a renegade!"