Age Discrimination: National Living Wage

Alison Thewliss Excerpts

Wednesday 8th June 2016 Westminster Hall

[Alison Thewliss (Glasgow Central) (SNP)]

It is great to see you in the Chair this afternoon, Mr Davies. I congratulate the hon. Member for Halifax (Holly Lynch) on securing this important debate, which is significant to many young people across these islands.

It is my gran’s birthday today. She has seen many forms of discrimination removed during her 96 years on the planet, on race, religion and sexuality. There has been so much progress, particularly for women, but there remains a persistent issue of inequality, endorsed by the state, when it comes to age. The differing rates of the minimum wage reflect a situation whereby young people are actively discriminated against because of their age.

In the Scottish National party, the equalisation of the minimum wage has been our policy for many years. While I was convener of the SNP’s youth wing, Young Scots for Independence, a resolution was moved at the SNP conference in 2006. It stated:

“Conference notes that the minimum wage is pegged at different levels dependent on age. Conference believes the current system to be grossly unfair and discriminatory and resolves, in an independent Scotland, to equalise the minimum wage levels.”

Much to my regret, we have not managed to achieve that independent Scotland yet. Nor have we achieved devolution of employment law so that the Scottish Parliament might make that change for itself. I still believe, though, that there is no justification for this grossly unfair and discriminatory practice. YSI renewed the fight on that issue at conference in 2013, giving the SNP’s backing to the Scottish Youth Parliament’s excellent “One Fair Wage” campaign.

I wish to dispel a few myths on the reasons behind the staggering of the minimum wage rate. The Low Pay Commission said in its 2013 report that

“we do not want the level of the minimum wage to jeopardise their”—

young people’s—

“employment or training opportunities.”

I just do not buy that. Young people have a range of options in front of them: work, study, apprenticeships. All that the staggering of the minimum wage ensures is that, whichever choice young people take up, whether it is employment on its own or in support of their studies, they are not legally entitled to the same wage as an older colleague in the same job. That is patently unfair.

Apprentices are faced with a rate of only £3.30 an hour. In many places that would not even cover their bus fare to get to the job, which is an absolute scandal. Do the Government believe that apprentices do not need to eat and do not have bills to pay? That rate compounds existing disparities. Analysis in the Department for Business, Innovation and Skills research paper on the evaluation of apprenticeships shows that apprentices are far more likely to come from a lower socioeconomic background. If the Government actually believe that work and training are means of getting out of poverty, apprentices should be much better supported than the current national minimum wage rates suggest. Decent employers offer comparable rates to their apprentices, but they are not legally obliged to do so.

Going further, under-25s have no discount on their bills, on their purchases in shops or on their rent. There must be recognition that an equal day’s work deserves an equal day’s pay. Those in the 16 to 17-year-old bracket at £3.87 an hour may well do the same work as someone in the 18 to 20 bracket at £5.30 an hour or someone aged 21 to 24 earning £6.70 an hour. None of them is entitled to the holy grail of the pretend living wage at £7.20 an hour, and of course none of them is a true living wage, as determined by the Living Wage Foundation, of £8.25 an hour. Research by the Scottish Parliament’s information centre shows that workers under the age of 18 will earn roughly £6,500 a year less than someone over 25. It further highlights that 18 to 20-year-olds will find themselves £3,705 worse off and apprentices will be £7,605 worse off than workers aged 25 or over.

The Government hide behind the myth that the staggering of the minimum wage reflects young people’s lack of experience. The Chief Secretary to the Treasury made that assertion again yesterday:

“For younger workers, the priority is to secure work and gain experience.”—[Official Report, 7 June 2016; Vol. 611, c. 1016.]

Again, that does not stack up. How can it possibly be fair that, by the letter of the law, a young person could start a job at 16 and work there for eight full years to gain the entitlement that a 25-year-old would have walking in on their first day? It is not about experience at all; it is about age discrimination sanctioned by the state.

I mentioned in a previous debate on the living wage on 18 April that I have a constituent who feels that she was dismissed due to being an older worker in a bar. She was on a zero-hours contract and was phoned on the day of her shift to be told that her services were no longer required. That coincided with the introduction of the new higher rate of the minimum wage. My constituent cannot prove it, but it smells very fishy. The response I received yesterday from the Minister for Skills was absolutely woeful. There is no action, and no changes are being made.

As the hon. Member for Halifax said, the staggering of the minimum wage rate gives unscrupulous employers perverse incentives to choose to hire younger workers, perhaps in industries such as catering, cleaning and retail that have a relatively high turnover of staff. Those workers are being exploited, too. Employers can dodge their obligations and try to manipulate the system to save cash, as younger, less experienced workers are less likely to bring a case successfully to an employment tribunal, even if they can pay the fees in the first place. Such employers are likely to get away with it.

The SNP is calling on the UK Government to raise the minimum wage for young people and apprentices or, if they will not do so, to give that power to the Scottish Government to do it for themselves. As part of the SNP’s commitment to fair work, we passionately believe that the living wage should be paid as widely as possible, including to apprentices and young workers. The Scottish Government have done a huge amount of work to persuade businesses in Scotland to take it up. We now have a very high success rate of employers paying the living wage to their employees. We fully support the living wage campaign, and we recognise that the living wage can make a real difference to the people of Scotland. Our Government are a fully accredited living wage employer, which sends out a hugely important signal that the UK Government should also take up.

If we had control over employment law in Scotland, I am certain that we would improve the pay of people in our nation, including those who happen to be under 25. My gran waited a long time to see discrimination broken down; I hope my daughter does not have to wait very long.

[Geraint Davies (in the Chair)]

I call Jim Shannon to share his thoughts.