EU Directive: Adequate Minimum Wages

Lord Hannan of Kingsclere Excerpts

Wednesday 18th March 2026 Lords Chamber

[Lord Leong (Lab)]

My Lords, I fully acknowledge that businesses face challenges and that micro-businesses operate with narrow margins and encounter real pressures, and these businesses are the ones that employ young people. However, the evidence consistently shows that paying staff fairly strengthens businesses in the long run: higher wages and lower staff turnover boost morale and productivity and help businesses keep experienced workers. Crucially, these wages are then spent within local communities, often in small shops, cafés and services right across the country. A national living wage supports not only workers but the resilience of local communities.

[Lord Hannan of Kingsclere (Con)]

My Lords, we have been lucky enough to have a 30-year run of structurally low unemployment, which is now coming to an end, especially with younger workers—partly because of the national insurance rise that the noble Lord, Lord Fox, just raised; partly because of the general economic situation; partly because of the Employment Rights Act; but also partly because of these huge recent rises in the minimum wage, which have especially hit the hospitality industry. Does the Minister see the danger that as we have more and more workers’ rights, we have fewer and fewer workers?

[Lord Leong (Lab)]

The noble Lord would not expect me to agree with him, and I do not. As I mentioned in yesterday’s debate on the regret amendment, and I shall share it again, Confucius reminds us that harmony among people is the best foundation for great achievement, and when we work together, success belongs to all. We have to address this issue of disparity between workers who are paid less and less in the overall scheme of things and the average wage in the country. We need to balance that up to two-thirds of the median wage.