Christopher Chope calls for minimum wage opt-out

Christchurch MP Christopher Chope introduced a Ten Minute Rule Bill yesterday on employment opportunities.

He made a very persuasive speech, and it should be noted that no-one rose to speak against it (although Labour MP for Thurrock Andrew Mackinlay expressed concern about unfair competition).

Herewith the speech in full:

"Mr. Christopher Chope (Christchurch) (Con): I beg to move,

That leave be given to bring in a Bill to introduce more freedom, flexibility and opportunity for those seeking employment in the public and private sectors.

Two months ago we were celebrating the 60th anniversary of the universal declaration of human rights. Article 23.1 states:

“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 United Kingdom is a party, states:

“The State Parties to the present Covenant recognise 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.”

It may come as a shock to many Members of this House to know that, currently, many people are not given the rights to work enshrined in those important United Nations articles.

This is an issue of increasing significance with the advent of the economic depression and the soaring numbers of innocent victims of the Government’s gross mishandling of the economy. In Christchurch, unemployment has more than doubled in one year, with very few job vacancies now available. Few would dispute that everything that possibly can be done must be done to create new job opportunities for our fellow citizens. My Bill, by restoring rights to work that have been taken away by this Government, would boost employment.

The first group that would be helped would be refugees who have sought refuge in this country by reason of persecution and are waiting for the Home Office to determine their applications for asylum. Why should those people not have the right to take employment opportunities that have not been taken up by British citizens and thereby enjoy the dignity of having a job? Although it might cause some raised eyebrows among colleagues to hear this, I am pleased to report that the Trades Union Congress is of the same view.

The second and much larger group who will be helped by my Bill are those who are currently out of work but would be willing to work for less than the minimum wage, which is £5.73 an hour or £11,918 a year based on a 40-hour week. Our Government make it illegal for an employer and an employee freely to negotiate the level of remuneration if it is less than £5.73 an hour for an adult, unless, of course, the work involved is unpaid voluntary work.

Before anybody accuses me of wanting to impose poverty wages, let me emphasise that I am talking about arrangements for freely consenting adults. The Government regard an income of £11,918 per year as much in excess of an employee’s personal needs. That is why a single person on that salary is required to pay no less than £1,887 in tax and national insurance, thereby effectively reducing their take-home pay to £4.82 an hour instead of the £5.73 that it is nominally.

Why should it be illegal for someone voluntarily to accept pay of £4.82 an hour? After all, that is all that is left in their pocket if they are paid the minimum wage of £5.73. Giving people the freedom to opt out of the minimum wage would help not only those who are out of work but those in the hard-pressed retail and hospitality sectors where businesses are going down like ninepins. How many such small businesses could be saved if those working in them had the freedom, in conjunction with their employers, to agree to reduce their wages?

Andrew Mackinlay (Thurrock) (Lab): It would be unfair competition.

Mr. Chope: The hon. Gentleman says that it would be unfair competition, but we are talking about the marketplace and people should be free to compete in the marketplace without restriction. A reduction to, say, £4.82 would be more than 15 per cent. below the minimum wage and would also save employers national insurance on-costs. It could thereby transform the economic viability of such a small business by substantially reducing overheads.

Voluntary wage reductions are increasingly commonplace in the private sector. I visited a small engineering company in my constituency on Friday where everyone has voluntarily taken a 10 per cent. pay cut. About half the work force have also been made redundant. Workers in other large firms such as JCB and Corus are reported to have done the same to enable their firms to be more competitive and to reduce the overall number of redundancies.

Such changes are not happening purely in the private sector. In Ireland, Members of Parliament and senior civil servants have taken a 10 per cent. pay cut. I am not asking people to support such a proposition if they give me leave to introduce this Bill, but that example shows the mood in the real world. It is ironic that the only people without the freedom to take a pay cut are those on or just above the minimum wage. How can that be fair?

We all know that many people are self-employed and earn far less than the annualised national minimum wage for full-time work. They can escape the constraints of the national minimum wage legislation, but not everyone wishes to become self-employed in order to enjoy the right to work. One of the most effective ways of creating new work, in the service sector in particular, is for services to be offered at a price that is attractive to potential customers, thereby creating a new market. We can all think of examples of people who might offer services such as window cleaning, child care, gardening, car washing and so on. Provided that the price is right, the potential employer may take on those people for employment. In the real world, it is accepted by the Low Pay Commission that more than 1 million people are already working at below the minimum wage. Many of them work in what is described as “the black economy”. How much better would it be if those private arrangements were not criminalised by the state?

The right to work covers not only the issue of remuneration but how many hours are worked. I have received letters from constituents who are worried about the potential impact of the loss of the opt-out from the 48-hour week, which was applauded by Labour Members of the European Parliament only late last year. My constituents argue that they should have the freedom to work whatever hours they decide, in conjunction with their employers. What reasonable man could argue with that? Indeed, that right is recognised by the United Nations, even if not by the European Union.

The final element of my Bill would require all public sector organisations to advertise their job vacancies externally, so that those outside the magic circle would have the freedom to compete for jobs on an equal basis. For example, there are 672 BBC management jobs with salaries of more than £70,000. Are there not many people out there in today’s job market who would give their eye teeth just to have the opportunity to compete for those jobs?

This Bill is about liberalising and deregulating the labour market. It is about removing the barriers to work that have been introduced since the last recession. It is not only an essential supply-side measure; it is also a restoration of that basic human right—the right to work.

Question put and agreed to.

Ordered,

That Mr. Christopher Chope, Mr. Peter Bone, Philip Davies, Mr. Nigel Evans, Mr. Greg Knight, Mr. Edward Leigh, Mr. Ian Liddell-Grainger, Mr. Brian Binley, Mr. William Cash, Mr. Robert Syms and Mr. David Wilshire present the Bill.

Mr. Christopher Chope accordingly presented the Bill.

Bill read the First time; to be read a Second time on Friday 15 May and to be printed (Bill 60)."