Destitution: Low Median Wage

Lord Hendy Excerpts

Thursday 23rd November 2023 Lords Chamber

Asked by

[Lord Hendy]

To ask His Majesty’s Government what steps they intend to take to address the UK’s low median wage and its contribution to the level of destitution presently under consideration by the UN Special Rapporteur on Extreme Poverty and Human Rights.

[The Parliamentary Secretary, HM Treasury (Baroness Vere of Norbiton) (Con)]

My Lords, boosting economic growth is the only sustainable way to increase wages. This Government have overseen significant falls in poverty since 2009-10, with 1.7 million fewer people in absolute poverty after housing costs. Supported by the national living wage, the proportion of low-paid jobs fell to 8.9% in 2023, from 21.3% in 2010.

[Lord Hendy (Lab)]

I thank the Minister for her Answer. While extortionate price increases have recently moderated, the real value of wages has been static since 2007—a nominal 6.2% increase in median wages last year translated into a 1.2% drop in their real value, according to the ONS. Half the working population earns less than £29,600. The Joseph Rowntree Foundation reports that 19.2 million people live below the minimum required to be warm, dry, clean and fed, with 3.8 million in destitution. The increase in the national minimum wage still leaves it, in real terms, no higher than it was 20 years ago. Wages need to rise. Only extensive collective bargaining can achieve that. Will the Minister make that happen?

[Baroness Vere of Norbiton (Con)]

I fundamentally disagree that collective bargaining will be the way to lift wages; I believe that economic growth will be the way to lift wages. What I would like to say—and I would criticise this Government and previous Governments for not making the most of this—is that, when we look at the national living wage, the increases we made yesterday mean that, next year, someone working full time on the national living wage will see their real after-tax take-home pay go up by 30% since 2010. I think that is a very significant achievement.