The proposals are in a confidential draft document being circulated by Labour headquarters. It includes the draft of a written endorsement by John Smith, which says: 'When people work for a living, they should be paid a living wage.'
Senior members of his Shadow Cabinet are strongly opposed to putting a figure on the minimum wage, and it is by no means certain that Mr Smith himself will finally agree to do so. But trade union leaders, who feel they are owed a political debt for delivering Mr Smith's 'one member, one vote' reforms last autumn, will insist that the pounds 4.05 must stay.
Further dissent is likely over what the paper calls 'restoration of the right to strike'. This would include 'sympathy action where there is a direct interest, with protection against dismissal for those taking industrial action'.
The proposal has produced near panic among Labour's 'modernisers'. They argue that the Tories will use it to say that Labour threatens a return to the 'bad old days' of the Seventies. Mr Smith's aides say privately that 'there is no guarantee that this will survive' into the final version.
The statutory hourly minimum rate of pounds 4.05 - giving a minimum of pounds 162 for a 40-hour week - would be an 'initial' goal pitched at half the rate of male average earnings. A Minimum Wage Inspectorate would help to enforce it.
The figure is a sharp increase on the pounds 3.40 an hour in Labour's manifesto at the 1992 general election. The final figure could be higher still as average earnings rise.
Party strategists believe that a national minimum wage will help more than four million workers - many of them women in part-time jobs. More than 300,000 families would be taken off dependence on means-tested benefits. Mr Smith's draft endorsement says: 'It will stop the crazy situation we have today where the taxpayer is subsidising bad employers.'
But employers are sharply critical. A spokesman for the CBI said last night: 'It would have a knock-on effect which could cost industry up to pounds 50bn a year. This could involve the loss of 100,000 jobs and reduce the competitiveness of UK firms in world markets.' Ministers have put the potential job losses as high as two million, a figure ridiculed by Labour, who point out that 10 of the 12 European Union countries have some form of minimum wage as well as the US. But the paper admits: 'There will be some jobs lost in some industries - and action will be needed to help particular low-paid industries develop new strategies to compete and raise their productivity.'
An updated version of the draft paper will go to Labour's national executive later this month. Whatever is finally agreed will be incorporated into the summer's local, European and by-election campaigning. Labour leaders have identified job insecurity as one of the key issues.
Other proposals in the paper are not causing serious argument in the party. They include 'specialist industrial courts' to help resolve disputes, a legal right to union representation for individual workers and an obligation on employers to recognise a union for collective bargaining 'where there is support by employees'. The last would meet strong resistance in industry and commerce and some union leaders fear that the threat of a legal right to recognition could trigger a rush towards de-recognition in the run-up to a general election.Reuse content