National Living Wage

Debate between Wes Streeting and Philip Davies

Monday 18th April 2016 Commons Chamber

[Philip Davies (Shipley) (Con)]

I want to make a few brief points in the time available. The first—we have to have a few home truths here—is that the whole concept of a national living wage is intellectual nonsense. The amount that people need to earn to cover their living costs depends on all sorts of factors. It depends on their housing costs. It depends on how close they live to their workplace and how much it costs them to get to work—the cost is obviously a lot less for somebody who lives right next to their place of work than for somebody who lives a considerable distance away. The idea that one national living wage can apply to everybody in the country, irrespective of their personal circumstances, is therefore nonsense, and we should make that clear from the start. What we are talking about with the living wage is an increased minimum wage, so let us just be honest about our terminology.

The right hon. Member for Enfield North (Joan Ryan) made the usual mistake of thinking that every employer in the country is some rich baron who lives in a huge mansion, drives around in a Bentley and has all the goods in the world. Actually, the vast majority of businesses in this country are small and medium-sized enterprises. I advise her speak to a few shop owners down her local high street, because she will actually find that many are struggling to earn a living. In fact, many of the people she is talking about do not earn the minimum wage or the living wage—whatever anyone wants to call it—themselves. She berates them for trying to do down their staff, when many of them are working desperately long hours to keep their staff in employment because their staff matter to them.

[Wes Streeting]

The hon. Gentleman is throwing up all sorts of straw men, but what we heard from my right hon. Friend the Member for Enfield North (Joan Ryan) were concrete examples of large companies that have the ability to pay their staff properly but are not doing so. When will the hon. Gentleman engage with the facts rather than straw men?

[Philip Davies]

I am engaging with the facts—these are home truths the hon. Gentleman should appreciate.

When people ask, “Do you think everybody should get a pay rise to £9, £10 or £11 an hour?”, everyone of course says yes. I think it was Norman Tebbit who said that if we ask people, “Would you like a Rolls-Royce?” they will all say yes, but if we say, “You’ll have to live in a tent for the rest of your life to pay for it,” the answer will be no.

We have to realise that there are consequences to increasing the minimum wage. We all know that if we want to reduce the consumption of something—if we want less of something—we increase its cost. If the Government want fewer people smoking, one of the tools they use is to put the price up. If we want fewer people drinking, we put the price up. The same rules apply to employment: if we put up the cost of employment, we will find fewer people employed—that is just an economic fact.