Letter: The abolition of wages councils will not help anyone

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The Independent Online
Sir: My congratulations to Barrie Clement on his article on the abolition of wages councils ('Farewell to the workers' friend', 26 August). He is probably right that the harmful consequences will not much worry the Government, but he has left out the only one that will. The measure will produce a large increase in the social security budget, just when Peter Lilley, Secretary of State for Social Security, has been instructed to reduce it.

As people's wages fall further below benefit levels, so the bill for family credit and housing benefit will rise. It is foolish to allow benefits to those in work without having some check on low wages. Otherwise, bad employers, and, if they are to compete, good ones, too, are under too much temptation to pass on an increasing proportion of their wages bill to the state. This conclusion is based on experience, for the system has been tried before, and is known to history as the Speenhamland system. As a result:

The little inn at Speenhamland, that lies beneath the hill

Is rightly called the Pelican - from its enormous bill.

Until I watched this government in action, I had not realised how true it is that those who do not know history are condemned to repeat it.

Yours sincerely,

RUSSELL

House of Lords

London, SW1

26 August

The writer is Liberal Democrat spokesman in the House of Lords on social security.

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