Living Wage

Lord Haskel Excerpts

Monday 9th June 2014 Lords Chamber

Asked by

[Lord Haskel]

To ask Her Majesty’s Government what measures they are taking to ensure that all those in work receive a living wage.

[The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Viscount Younger of Leckie) (Con)]

We support businesses that choose to pay the living wage when it is affordable, and not at the expense of jobs. The Government are committed to improving living standards. We have cut taxes for the lowest paid, allowing them to take home more of what they earn, and we have introduced tougher penalties and naming for employers who have failed to comply with the national minimum wage, which maximises wages without damaging employment.

--- Later in debate ---

[Lord Haskel (Lab)]

But the Minister’s words are not carried out in practice. The reality is entirely different. Is the Minister aware that during the last three years, two-thirds of the increase in social security payments to people of working age has gone to people in work? So while the Government are cutting public services, the taxpayer is supporting low pay. Given that support, does the Minister agree that the taxpayer would be better served if instead the Government were more rigorous in getting employers to become more productive, so that they could pay a minimum wage on their own?

[Viscount Younger of Leckie]

I certainly agree with the noble Lord that we are encouraging more employers to be productive. Much work has been done to that effect but I point out to him that the minimum wage is now increasing faster than earnings. The rise of 3% in the adult rate will mean that low-paid workers will enjoy the biggest cash increase in their pay packets since 2008. A rigid formula does not allow for changing economic circumstances, for example imposing a target set by politicians. That would result in job losses if it is set too high and lower earnings if it is set too low.