National Living Wage

Alison Thewliss Excerpts

Monday 18th April 2016 Commons Chamber

[Alison Thewliss (Glasgow Central) (SNP)]

I thank the hon. Member for Mitcham and Morden (Siobhain McDonagh) for securing this debate and the right hon. Member for Enfield North (Joan Ryan) for speaking very well in her place.

The Chancellor announced the national living wage with great triumphalism, but as with so many aspects of Government policy, it was quickly exposed as nothing more than smoke and mirrors. As we heard earlier, it is not a living wage but a rebadging of the minimum wage. The real living wage is independently determined by the Living Wage Foundation and currently set at £8.25 an hour. If a person cannot live off it, it is not a living wage. The Government and the Minister should apologise to the Living Wage Foundation, to the many trade unions and employers that have legitimately taken up the real living wage and to the many campaigners who have fought for it over the years. It is a gross insult to those campaigners to appropriate their term, and it is bound to lead to misleading job adverts. It is not a real living wage if it is not an actual living wage for everybody.

It is also not a living wage if someone happens to be under 25. The Chancellor said:

“Britain deserves a pay rise and Britain is getting a pay rise.”—[Official Report, 8 July 2015; Vol. 598, c. 337.]

Interestingly, under-25s are clearly not “Britain”, because they are not entitled to the higher rate of the minimum wage. Their fair day’s work is not receiving a fair day’s pay. Since the minimum wage’s inception, it has contained an in-built aspect of age discrimination. It has been Scottish National party policy for some years to equalise the minimum wage—I was convener of the youth wing when my colleagues raised it in the party. I am proud to raise that point today, along with the hon. Member for Halifax (Holly Lynch). I have heard it said that younger workers lack experience, but the minimum wage is not based on experience; it is based on age. A person can start on a minimum wage job at 16 and work in it for nine years before they are legally entitled to this new pretendy living wage, which a 25-year-old would get on their first day at work. They could walk in the door and get the higher living wage.

As we heard from the hon. Member for Halifax, this new minimum wage has also exacerbated the differential in the wages paid to younger workers in this country. As my hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) said, the most pronounced effect has been on apprentices. There are 54,000 apprentices in the UK who are not entitled to this living wage. They might have families and various other needs to meet, and they deserve fair pay as well. They cannot be expected to live off nothing. Discrimination of that sort is opposed in all other parts of society. This long-standing, state-endorsed age discrimination must end, and I call on the Government to take action. If they will not, I would like them to devolve employment law to the Scottish Government, who are making tremendous progress in promoting the uptake of the real living wage in Scotland.

The need to equalise the minimum wage has increased significance for younger workers on zero-hours contracts. I had a constituent in my surgery a few weeks ago who worked in a bar in Glasgow city centre. One day, she received a phone call from her employer saying that there was no need for her to come into work that evening because her services were no longer required. After getting over the shock of her sudden dismissal, she researched her options. Citizens Advice and ACAS both said she had no rights in her circumstances as a zero-hours worker. She suspects but cannot prove that she was let go because she was over 25 whereas her colleagues were under 25. I have heard the same thing anecdotally from friends who are over 25 and have seen their hours cut. They are now finding it difficult to make ends meet and to find another job in their sector.

[Richard Fuller]

The hon. Lady is making some very good points, including about the potential for discrimination at the age of 25. Would she be interested to hear from the Minister, as I would, what steps the Government might take to ensure that that does not happen?

[Alison Thewliss]

I would be interested, but I would be more interested to hear what we can do to equalise the wage so that unscrupulous employers are not tempted to discriminate in the first place. The Cabinet Secretary for Fair Work, Skills and Training, Roseanna Cunningham, posted on her Twitter feed a photograph of a sign in a shop window advertising for a waitress but saying that applicants had to be under 24. That is illegal, but it is encouraged by the differential in the living wage. Particular attention needs to be paid to under-25s on zero-hours contracts, who are doubly discriminated against.

I wrote to the Minister asking who was enforcing the minimum wage. I had received figures in a parliamentary answer suggesting that a great number of people were not earning the wages to which they were entitled. There are 1,718,000 over-21s earning less than £6.50 an hour, 78,000 under-18s earning less than £3.87 an hour and, as I mentioned earlier, 54,000 apprentices earning less than £3.30 an hour. Despite those figures, which show that hundreds of thousands of people are not earning the wages to which they are entitled, according to the Minister’s letter there have been only nine successful prosecutions of employers since 2007. That is because the people affected are in a position of weakness, as they might lose their job if they complain. We have to do an awful lot more. His letter mentioned that the Government were taking on more staff and investigating more, but only nine prosecutions is absolutely woeful given the scale of the problem.

There is another way of dealing with this. The Scottish Government have worked with employers—it is not necessarily about imposing a real living wage on employers, because as the Scottish Government acknowledge, that might be difficult for small employers—and as a result 56,000 employees now earn the real £8.25 an hour living wage. In my constituency, they include employees of large organisations such as Barclays and SSE; small organisations such as An Clachan café, the Good Spirits Co and Locavore; organisations that provide services, such as Southside Housing Association and Glasgow Association for Mental Health; Glasgow Caledonian University; and supermarkets such as Aldi and Lidl. If they are all able to do it, there is no reason why other employers cannot work towards it as well.

The Scottish Government, through their Scottish business pledge, have moved dramatically towards getting more people on to the real living wage, and it has been a hugely successful scheme. They first ask employers to pledge to pay the real living wage, and employers then have to meet two of eight further elements of the pledge, which can include ending exploitative zero-hours contracts and investing in young workers. They must also work towards achieving all nine elements. It has been a very successful scheme, so I suggest that the UK Government take a leaf out of the Scottish Government’s book.