National Minimum Wage

Debate between Lord Offord of Garvel and Lord Bird

Wednesday 21st February 2024 Lords Chamber

[Lord Bird]

To ask His Majesty’s Government what assessment they have made of the case for increasing the national minimum wage to £15 per hour for workers across all age groups.

[The Parliamentary Under-Secretary of State, Department for Business and Trade and Scotland Office (Lord Offord of Garvel) (Con)]

My Lords, I thank the noble Lord for his Question. The Government are increasing the national living wage by a record 10% in April this year to £11.44 per hour. This increase will end low pay for those aged 21 and over, and meets the target threshold of two-thirds of median hourly pay. Any further increases in the national living wage will need to be carefully considered, regarding the economic impact, balancing the cost to business and benefit to workers. The Government will continue to base these decisions on increases on robust evidence and recommendations from the Low Pay Commission.

[Lord Bird (CB)]

I thank the Minister for that Answer. I think it is interesting that none of us knows how you can live on £10 an hour and run a family and pay your rent. The minimum wage is not very near the living wage, so we have to find a way of morphing the minimum wage towards the living wage. I ask this rather strange question: what happens if you take a third of what is on the books at the moment and increase by a third the minimum wage? The reason I ask it is: will the Government change the situation where we keep producing low-paid jobs and low investment so we have an enormous number of people who cannot earn a decent wage? That means that we have to increase the way that we trade. We have to push up prosperity, and that is the job of the Minister’s department.

[Lord Offord of Garvel (Con)]

I thank the noble Lord for that reminder. I think all of us in this place and the other place can be very proud of what has happened over the past 25 years on the minimum wage. This wage increase will benefit 3 million workers. Remember, we have 33 million people working in the UK, out of 66 million, so those in the bottom 10% are getting a 10% increase. That has a knock-on effect for further formulae. This is a big impact. If we look at the past eight years, since it came in in 2015, the national living wage has gone up by 60% versus inflation at 30%, so there has been a real increase in wages for those at the lower end of the wage scale.