National Minimum Wage (Amendment) Regulations 2021

Baroness Clark of Kilwinning Excerpts

Monday 1st March 2021 Lords Chamber

[Baroness Clark of Kilwinning (Lab) [V]]

This pandemic has highlighted the very real link between low income and health inequality in a very dramatic way. It is appropriate as part of this debate to put on record the huge concern about the low level of the minimum wage in this country.

The National Minimum Wage Act 1998 was brought in by the 1997 Labour Government. I was a Labour candidate in that general election, in a seat where there were a lot of strong views about the national minimum wage. It was a large rural seat in the south west of Scotland, the seat of Galloway and Upper Nithsdale. Many people were on very low incomes there, particularly rural workers, who were earning perhaps 50p or 75p per hour. That was a very low income even at that time, and definitely not the kind that could lead to people having a living wage if they worked long hours.

In that election, it was repeatedly argued that if we introduced a national minimum wage there would be high unemployment, people would lose their jobs and businesses would go bust. The reality, of course, was very different and that did not happen. That is something we need to be aware of every time we have this debate, because the reality and the backdrop is that people are suffering.

We are seeing big campaigns in the United States at the moment, such as the Fight for $15 campaign, which is trying to get the minimum wage increased to a level people can live on. In this country we have had the McDonald’s campaigns, whereby McDonald’s workers —represented by the Bakers, Food and Allied Workers’ Union—are trying to get £10 per hour and other improvements to their terms and conditions. In Scotland, the GMB trade union is campaigning to get care workers a minimum wage of £15 per hour and is putting pressure on the Scottish Government to deliver that in the upcoming Budget.

I say to the House that this is an issue about justice and economic sense. Frankly, it does not make economic sense to have people on the kinds of poverty wages being discussed this evening. It is also an issue of dignity. It is simply not acceptable if people working full-time are having to rely on state benefits, which they may or may not claim. They simply cannot provide for themselves and their families if the living wage is based on a minimum income of the levels outlined in these regulations. Companies like McDonald’s pay very different rates in different countries, depending on the legal minimums in those countries. In countries such as Denmark, the rates of pay are far higher than in the United States, for example, or indeed the United Kingdom.

What this House needs to be saying is that this is simply not an acceptable level of minimum wage. We need to say this on every occasion when we discuss these issues, because that message needs to get through. Of course, these regulations must go through this evening because £8.91 per hour for someone aged 23 or over is better than the current rate of £8.72, but we should say clearly to the Government that this level of minimum wage does not make economic sense. We know that if you put money into the pockets of the poorest in society, they go out and spend it. We are arguing about issues that have been debated for decades. When we have substantially improved the incomes of the lowest paid, it has been a policy initiative that has made a lot of sense and delivered justice for people who need it.