The minimum wage: its history and future
Fifteen years ago, on 1 April 1999, a national minimum wage was finally implemented. It was set at £3.60 per hour, with a lower rate of £3 for those aged 18 to 22. The 1997 Labour manifesto had set out that: ‘Introduced sensibly, the minimum wage will remove the worst excesses of low pay (and be of particular benefit to women), while cutting some of the massive £4 billion benefits bill by which the taxpayer subsidises companies that pay very low wages.’
Margaret Beckett, then president of the board of trade and secretary of state for trade and industry, moved the national minimum wage bill for second reading in the House of Commons on 16 December 1997. She captured the significance of the moment: ‘I am proud to be able to stand before the House today moving the second reading of the national minimum wage bill. The bill will introduce, for the first time in the United Kingdom, minimum wage protection for all workers and will begin to end the scandal of poverty pay.’
She attacked the Conservative opposition: ‘Increasingly in recent years, the Conservative party has argued that Britain can only and should only seek to compete by being the cheapest at all costs; aiming to be at the bottom of the heap; aiming for the lowest wages and the worst working conditions to be found among our competitors. It was truly a counsel of despair.’ She went on: ‘The previous government inherited a country long regarded, certainly since the earliest days of the industrial revolution, as the workshop of the world. Yet the underlying thrust of the policy of the previous government was to try to turn Britain into the sweatshop, certainly of Europe if not of the world.’
John Major’s Conservative government had abolished wage councils in 1993. The Edwardian Trade Boards Act of 1909 had established the principle of councils in certain ‘sweated’ industries to set localised minimum wages. The committees featured three categories of members: employer representatives, employee representatives, and government-appointed independent members. Initially, the only four industries covered were chain-making, tailoring, paper-box making and machine-made lace and net finishing. This principle was expanded in the postwar era, and wage councils became fully established is the less unionised industries.
The idea of a ‘national minimum’ in pay and conditions first appeared in the Labour general election manifesto of 1918; however, the idea of national minimum wage had a much earlier genesis. A national miners’ strike for a minimum level of pay led to the passing of the Coal Mines (Minimum Wage) Act of 1912; Keir Hardie had seen the opportunity this presented for a wider debate on wage rates across all industries. Sidney Webb had taken a strong intellectual interest in the principle of minimum wages in labour markets.
The National Minimum Wage Act of 1998 was not only one of the great legislative successes of 1997-2010, it was one of the Labour party’s great historic achievements. Like all great, radical changes, it succeeded not only on its own terms, but also by moving the political debate forward. Today’s debate is no longer only about whether there should be minimum provision: as Ed Miliband argued at the recent Welsh Labour party conference, ‘the living wage is an idea whose time has come’.
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1997 general election, Conservatives, Ed Miliband, Labour, Labour Manifesto, living wage, low pay, Margaret Beckett, minimum wage