Fri, 1 Jul 2011

Commons rejects opt-out for minimum wage rates

The House of Commons has rejected a proposal by a Conservative MP to introduce opt-outs to the minimum wage.

Backbencher Christopher Chope favours the right of individuals to negotiate a lower rate. He argued this could help people gain employment experience and would acknowledge wide disparities in pay levels between wealthy areas such as London and other regions.

Chope said the rise in unpaid internships partly reflects the rigid nature of the current pay floor. But his Private Member’s Bill was rejected by 33 votes to just five in the Commons last month.

Labour MP and shadow business minister Gareth Thomas told the House there had been examples of people being paid as little as 80p an hour before the Labour government introduced the pay floor just over a decade ago. He said that low wages would mean the taxpayer subsidising unscrupulous employers as the state would have to pay more in benefits and tax credits.

The government supported this view. Mark Prisk, Conservative MP and business minister, told the Commons: ‘Low-paid workers who may be fearful of losing their jobs are unlikely to have that free choice, that equal position about whether they should accept a pay cut taking them below the minimum wage.’

Regional variations to the minimum wage were the subject of debate in 1998, when the initial legislation for the minimum wage was being prepared. The then trade and industry secretary Peter Mandelson was rumoured to be in favour, but opinion within the Labour party was strongly against it and the only exception introduced was the youth rate.