National Minimum Wage

Alan Meale Excerpts

Tuesday 16th December 2014 Westminster Hall

[Sir Alan Meale (in the Chair)]

Before the start of the final debate, I point out that the vote that we had earlier added 11 minutes to the time scale. Because that time can be carried over to the next debate, hon. Members can finish at 5.11 pm, if there is not another vote in the meantime. You have a little extra time to play with, Mr Jarvis, if you want to take it; you can stick to your time scale if you so wish.

[Dan Jarvis (Barnsley Central) (Lab)]

Thank you, Sir Alan. It is a pleasure to serve under your chairmanship. I begin by thanking Mr Speaker for granting this debate. It should really have taken place a fortnight ago, on Friday 28 November, the date for the Second Reading of my private Member’s Bill—the Low Pay Commission (National Minimum Wage) Bill. That is a Bill to make work pay: to strengthen the national minimum wage, to give greater powers to the Low Pay Commission and to tackle the scourge of low wages, which blights the lives of too many people across Britain today. Regrettably, we did not have an opportunity to debate my Bill. Two hon. Members, both of whom are known throughout the House as long-standing campaigners to undermine the minimum wage—I believe that one of them even voted against it in 1997—spoke for more than two hours to sabotage the earlier debate on a Bill to tackle revenge evictions, blocking my Bill as a result. Given that we were deprived of a debate that day and given that this issue means so much to so many across our country, I have called this debate to say now what I would have said then and to give the House the opportunity to debate the important matter of low pay.

Choosing the subject of my Bill was a difficult decision. I had no shortage of helpful suggestions, but ultimately it was the story of one woman that made up my mind. I wanted to make a difference to people such as Catherine. Catherine is a cleaner and housekeeper in my constituency. She juggles six different jobs, working in six different locations across Barnsley. She works more than 50 hours a week on the minimum wage. Like many people, Catherine struggles to make ends meet. Her pay packet does not stretch as far as it used to, especially as the real-terms value of the minimum wage has declined since 2010. When I asked her how that had affected her life, she said that she had had to cut down on what she described as “luxuries”. Soon I realised that she meant that she could not afford essentials such as clothes. “I just work to exist,” she said, “I can’t afford nice stuff. I just work to keep my head above water.”

Catherine does not have time to take notice of polls or political pundits, but what happens in our politics, what goes on in this place and the Governments we choose to serve us here will shape her life more than most. It is easy now to take it for granted that Catherine earns a national minimum wage at all. Before 1997, many workers like her were expected to work for as little as £1 or £2 an hour. In its first months of existence, the Low Pay Commission found appalling cases of factory employees earning only £1.22 an hour, care home workers taking home just £1.66 an hour and even a chip shop worker from Birmingham forced to make do with 80p an hour.

It took a Labour Government to end that scandal. Their efforts were led by Sir Ian McCartney, the former Minister of State at the Department of Trade and Industry, who piloted the Bill that became the National Minimum Wage Act 1998 through the House, and by my right hon. Friend the Member for Derby South (Margaret Beckett), the former Secretary of State. The national minimum wage was one of Labour’s greatest achievements, but its path to becoming law included a record sitting in the House of 26 and a half hours as Members, mainly from the Conservative party, sat through the night, opposing the Bill line by line, to stand in the way of working people getting a decent wage for a hard day’s work. Today, their fears have failed to materialise. They were on the wrong side of history then, and the scourge of low pay explains why the Government’s plan to balance the nation’s books is failing now. A generation on from the national minimum wage becoming law, the low pay challenge for our country has changed. The national minimum wage did help to root out exploitation and extreme examples of poverty pay, but today we have huge numbers of people across Britain who do a hard day’s work and are still living on the breadline.

Catherine, whose story I shared earlier, is just one of more than 5 million people across Britain who are stuck on low pay. The number is up from 3.4 million in 2009 and is at an all-time record. Women and young people are being hit hardest. One third of all working women and nearly two fifths of 16 to 30-year-old employees do not earn a decent wage. Nearly two thirds of children living in poverty now live in families with someone in work. If we look at the proportion of our work force that is low paid, we see that Britain is towards the bottom of the pile, coming 25th out of 30 OECD countries.

Moreover, the real-terms value of the minimum wage is losing ground. The Low Pay Commission has acknowledged that its relative value has dropped significantly since 2004, and job creation in the lowest-paid sectors has exploded at double the rate of the rest of the economy since 2010. That partly explains why the Government now spend more on tax credits and social security for families in work than they do for the unemployed. It is why the Government have been forced to spend an extra £900 million on tax credits to top up low wages, and it is part of the reason why Ministers have had to spend £1.4 billion more than planned on housing benefit for people who cannot afford a roof over their head.

John Maynard Keynes famously once said:

“When the facts change, I change my mind.”

My central argument today is that as the challenge has changed, our approach to tackling low pay needs to evolve with it. Many of our country’s leading business voices have already called for the minimum wage to increase faster than it has done in the recent past. They include Sir Ian Cheshire, chief executive of Kingfisher, and Steve Marshall, executive chairman of Balfour Beatty. Professor Sir George Bain, the first chair of the Low Pay Commission, has described the organisation as a “child of its time” and has called for an ambitious target to bring the minimum wage closer to average earnings. We need the Government to put that into action.

Labour’s plan to tackle low pay—a plan mirrored in my Bill—preserves everything that has helped to make the Low Pay Commission such a success. I am referring to decision making based on strong research; a balance between the need for wage growth and concerns about the impact on employment; and a partnership approach between the employers who create the jobs and the employees who work the shifts. Let me run through the key points.

First, we need to give a mandate to the Secretary of State to set a target for the national minimum wage to increase over a Parliament at a rate higher than that for median earnings. I did not include a specific target in the Bill. Different people will have their own views on that. We as the Opposition have already expressed our ambition for a minimum wage closer to 58% of median earnings. The important point is that the act of setting a target alone would deliver a more ambitious approach to tackling low pay and a greater focus on what progress we are making. A clear long-term target such as that would give firms certainty and time to adapt their business models to boost productivity and support higher wages. It would also bring us closer to other countries such as Australia and European economies such as Belgium and Germany, where all the evidence shows that it is possible to support a higher minimum wage without any negative impact on employment.

The Low Pay Commission would keep its leadership role in delivering on the target and would set out a plan for how it could be achieved; and flexibility could be retained in the system. We know that the success of the minimum wage has been built on an approach that works hand in hand with industry and takes into account the state of our economy, so in the event of significant economic shocks, the Low Pay Commission could be required to present compelling evidence to the Government and to Parliament, setting out why it is not possible to meet the target during the proposed time frame. The Low Pay Commission could then make further recommendations to get progress towards the target back on track.

Paediatric First Aid

Alan Meale Excerpts

Monday 15th December 2014 Westminster Hall

[Mark Hunter]

The coroner made a wide-ranging series of points in his response. I do not have his report to hand, but I am happy to ensure that my hon. Friend, as the chair of the all-party parliamentary group on first aid, gets to see a copy. It is fair to say that the coroner addressed the wider concerns and the relevance to any future measures that may need to be taken.

[Sir Alan Meale (Mansfield) (Lab)]

I am grateful to the hon. Gentleman for securing the debate. Like the hon. Member for Colchester (Sir Bob Russell), I sadly lost a young member of my family in my earlier life, so I know what the experience is like.

I want to stress that the issue is not limited to England. People in Ireland are currently trying to get a Bill through that would do exactly what the hon. Gentleman is supporting here today. We must ensure, because of how we deal with education and health matters in this great nation of ours, that the same recommendations are made in Wales, Northern Ireland and Scotland.

Family Policy

Alan Meale Excerpts

Wednesday 4th May 2011 Westminster Hall

[Fiona Bruce (Congleton) (Con)]

It is a pleasure to serve under your chairmanship, Mr Meale. I congratulate my hon. Friend the Member for Erewash (Jessica Lee) on securing this important debate. I thank her and my other hon. Friends in Westminster Hall today for all the excellent contributions that they have made.

This debate on family policy comes at a particularly auspicious time following the royal wedding, which I mention because I believe the most important relationship is marriage. I believe that Government should support marriage, particularly for the sake of children—many of which I wish upon the happy royal couple, in the fullness of time.

Like many of my hon. Friends in Westminster Hall today, I have practised in the field of law. I did so for well over 20 years—actually, nearly 30 years, but I was reluctant to say that—as the head of a high street law firm. As a result, I do not have a completely doe-eyed view of marriage. In my time practising law, I witnessed the incalculable cost of relationship breakdown, not least the financial price and the personal price paid by children. However, even after taking that cost into account, I still believe that it can be argued persuasively that marriage is good for the stability of family life and that stable families are good for society.

That being the case, if a key question in policy making is about fairness, why do many parents who choose to marry feel penalised for doing so by our tax system? Fiscal policy that was intended to help single mothers, which is a wholly worthy cause, has created the odd situation whereby some couples who want to live together actually live in separate homes because the tax system rewards them for doing so. On a national scale, that is terribly wasteful, not only because shared housing is more efficient but because, as we have already heard today, cohesive family life brings immeasurable benefits to both individuals and society as a whole.

In a research paper produced by the Christian charity CARE in January 2011, “The taxation of families 2009/10”, Phillip Blond, the director of ResPublica, wrote:

“The family is the most fundamental, basic and rooted unit of society…The centre of the family, the thing that holds it together…is the relationship between parents… There is an increased unwillingness for parents to commit to each other which has given rise to a significant increase in cohabitation which in turn has major implications, not only for adults but also for children… A child born to cohabiting parents has a nearly one in two chance of living in a single parent family by the time they reach their fifth birthday, whilst a child born to a married parent has only a one in twelve chance of finding themselves in this situation. The consequences are far reaching. Children from lone parent families—who today constitute nearly one quarter of all children—are 75 per cent more likely to fail at school, 70 per cent more likely to become drug addicts and 50 per cent more likely to become alcohol dependant. Girls from fatherless homes are an over-represented demographic in teen pregnancy statistics, while boys from fatherless families are typically over-represented in criminal gangs.”

Even if one’s ideals do not include marriage as a public act of commitment, there is evidence that marriage as an institution is mutually beneficial, both to the partners in the relationship and to society as a whole. It is also the most important factor in predicting a child’s well-being. Some see supporting marriage through the tax system as regressive, but I see it as progressive.

In the UK, we support single parents financially—directly or indirectly—because it is right to recognise that bringing up children is a hard job at the best of times, particularly if one is more or less alone in doing so. Many single parents are courageous, self-sacrificial and deserve commendation. Sadly, it is also true that many children who grow up in a single-parent household live in poverty. That is not right, but it is also true that almost half of children who live under the poverty line come from two-parent households. It seems wrong that we should incentivise single parents through the tax system to remain single, simply because of the financial benefits that that status affords.

Other research shows that it is harder for couples with children to lift their children out of poverty than it is for single parents. Again, I quote from the CARE paper:

“Although designed to deal with child poverty, tax credits are now locking children into poverty in working households, especially couple households. The latest poverty statistics are those for 2008/2009 which show that of the 2.8 million children living in households with incomes below the official poverty line (60 per cent of median equivalised income), 1.5 million were in households with one or both parents in paid work, 1.3 million (a number that is increasing) were in couple households… The problem arises because tax credits do not take account of the way income is measured for calculating the number of children in poverty. The DWP say that a lone parent with two children would have required net income of £293 per week to be on the poverty line, whereas a couple with two children would have needed £374 per week. However, a couple family’s entitlement to tax credits is the same as that for a comparable lone parent family. Couple families therefore have to earn more, but because of the way the means testing formula works they receive fewer credits… However, there is a further problem. As pre-tax income increases, tax credits reduce… In 2008/09, a lone parent would have needed to earn only £95 per week to be out of poverty. By contrast, the couple family would have needed to earn £283 per week.”

For a number of years, CARE has been pointing out that many couples would be better off financially living apart than living together. Seventy-eight per cent. of the families in CARE’s sample were shown to be better off living apart, even after the additional housing costs were taken into account. Families find themselves better off living apart principally because of the way in which tax credits are structured and means-tested.

[Mr Alan Meale (in the Chair)]

Order. May I ask the hon. Lady to proceed very quickly? I need to call the Front Bench speakers.

[Fiona Bruce]

Certainly, Mr. Meale. I will conclude my remarks.

Marriage is good for society. It is a public institution as well as a private relationship, and as such society as a whole has a stake in supporting the family unit. If society benefits from the family, as it undoubtedly does, families should benefit from society and its fiscal policies, especially for the sake of our children and their children.

[Mr Alan Meale (in the Chair)]

I thank the hon. Lady for speeding up. It is unfortunate that she was called at the very end, but we have to give the Front Benchers time to speak.

--- Later in debate ---

[The Minister of State, Department for Education (Sarah Teather)]

It is a great pleasure to serve under your chairmanship, Mr Meale. I congratulate the hon. Member for Erewash (Jessica Lee) on—I was going to say winning this debate, but I am not sure whether “winning” is the right word, considering what time she probably got to bed last night. There is some irony in discussing family policy in the least family-friendly institution in the UK. I congratulate all hon. Members on being here and on an interesting and informative debate. I particularly enjoyed the opening remarks of the hon. Lady, which addressed family policy across the piece. I doubt that I will be able to respond to everything in the time remaining, but I will do my best to pick up on as many of the points raised as I can.

I thank the hon. Member for Washington and Sunderland West (Mrs Hodgson) for her profound affection for my colleague, the Under-Secretary of State for Education, the hon. Member for East Worthing and Shoreham (Tim Loughton). I will of course pass on her remarks to him. I am sure that he will be terrified, but I will draw his attention to her flattery of his great skills.

The hon. Member for Washington and Sunderland West said that this goes without saying, but I think it is worth saying again: strong and stable families are the bedrock of a strong and stable society. They are key to ensuring that children grow up in a loving and nurturing environment and develop into healthy, happy, successful adults. The quality of relationships matters. Adults in good, stable relationships have better life outcomes, and so do their children. Families are also the social capital that builds and sustains neighbourhoods and communities, as the hon. Member for Maidstone and The Weald (Mrs Grant) said eloquently in her introductory remarks. They are the basic unit of society, and they are where we learn the social skills we need to survive and flourish in life. They are where we learn how to form relationships with other people, and the success of those relationships will affect our life outcomes as well as those of our children.

The make-up of the family unit is changing, as several hon. Members said. Families come in many varied shapes and sizes, including single-parent, multi-generational and foster families. Fathers are becoming more involved with their children, which I believe is a positive step forward that the Government should do much to support. Despite the many different changes referred to by the hon. Member for Strangford (Jim Shannon) in his speech, families are, as he also said, happy on the whole with family life. Most families say that they are fairly or very happy; 93% of respondents to a recent BBC poll said that they were happy with their family life.

However, it is vital that we support families as much as we can, and this Government believe that we should do much better. It is our ambition to make this country the most family-friendly in the world. At the heart of all our policy making is the determination to ensure that family services are designed around parents’ needs rather than the other way around, and take account of changing work patterns, the evolving roles of parents and the financial pressures families face.

The hon. Member for South West Bedfordshire (Andrew Selous) said that some people believe that families are not the Government’s business. Sadly, many politicians who consider themselves progressive believe that the family is not an area in which the Government should be involved. There is sometimes a dichotomy between believers in a small state and in a big state regarding what they believe the role of Government should be. However, I believe that the Government have an important role in supporting families, systematically removing the barriers that prevent them from thriving and creating the right environment through legislative change, financial systems and the design of public services so that families can be the best that they can be. That matters to our children, and to their children as well.

It is also important that we intervene to support vulnerable families when things are difficult. All families go through times when things are harder. We know, for example, that there are pressures on families when they have a first child or when children move into the teenage years. Those with many social networks might manage to get through such times, but if life is stacked against people, as in some of the examples given in several hon. Members’ speeches—if they suffer from a mental health problem, have unstable relationships, live in overcrowded housing or have a drug or alcohol problem—it is much more difficult to do so.

That is why the Government are investing in extra health visitors, for example, to support people in the early years. It is why we are doubling the number of family nurse partnerships—to refer to the remarks of the Opposition spokesperson—and why we feel so strongly that Sure Start matters and must be focused particularly on families that need support at that time. It is also why we have begun a new campaign to support families with multiple problems to ensure that they get the support they need, rather than being passed from one service to another.

We will shortly consult on new proposals for family parental leave, an issue about which I feel strongly. Several hon. Members discussed fathers and the need to involve them more. Involving fathers at an early stage makes a difference to children’s outcomes. If the worst happens—if all the other things we are doing to support relationships do not work and the relationship breaks down—fathers who are engaged at an early stage are much more likely to remain engaged later.

I am running out of time, so I will not be able to speak about all the things that I wanted to address, but I will refer a little to our work on relationship support, which I believe is important to sustaining families who might go through difficult times, as any family will. As the hon. Member for South West Bedfordshire said, the Prime Minister recently announced that my Department will fund relationship support to the tune of £30 million, a substantial increase. As part of that, we are also providing funding through a series of voluntary sector organisations—at the moment, telephone and internet services are going out to tender—to ensure that all sorts of relationship support mechanisms are available to families.

The hon. Member for South West Bedfordshire will be pleased to know that we already support prisoners’ families with £1.3 million through about six voluntary sector organisations. I agree that it can have a dramatic impact on reducing reoffending. I have long been interested in the ideas that he mentioned involving greater availability of guidance and support before marriage. Having the skills to negotiate difficult times and knowing where to go for support can make a difference when couples hit rocky periods.

The work we are doing—

[Mr Alan Meale (in the Chair)]

Order. We now move on to our second debate. Can Members who are not going to participate in it please leave quickly and quietly?