National Living Wage

Angela Crawley Excerpts

Monday 18th April 2016 Commons Chamber

[Angela Crawley (Lanark and Hamilton East) (SNP)]

I congratulate the hon. Member for Mitcham and Morden (Siobhain McDonagh) on securing this debate, and I wish her well with her recovery. I am only sorry that she could not be in the Chamber to deliver her speech, but I thank the right hon. Member for Enfield North (Joan Ryan) for opening the debate.

As a signatory to this motion, I want to recognise that the idea of a living wage sounds positive and a great thing. In fact, it sounds like a boost for people on low incomes. Who would argue with an increase to the living wage or to any wage? However, the fact is that this is not a living wage. I do not often find myself agreeing with the hon. Member for Shipley (Philip Davies)—in fact, I do not think I ever have until today, when he stated that this policy is nothing more than an increased minimum wage.

The fact that we are already witnessing the unintended consequences of this policy—the reality of an adverse effect on workers’ benefits—only proves that this Government have once more undermined the role of workers in favour of businesses. Once more, the hard-working people of this country will pay, while the bankers, businesses and tax avoiders continue to profit. As employers seek to manage the impact of wage bills, the reality is that no business wants to lose profit. Reducing staff numbers, cutting hours, misusing or abusing zero-hours contracts and reducing employee benefits are just some of the ways in which businesses are managing to subvert the cost of paying people real living wages, while expecting more from their employees.

Let us be clear: the real living wage, as defined by the Living Wage Foundation, takes into account living costs, whereas this Government’s so-called living wage is calculated on median earnings and completely fails to take into account the cost of living. How can it actually be called a living wage?

[Richard Fuller (Bedford) (Con)]

I have listened to several speeches from Opposition Members and the hon. Lady is making the same argument. It is important to understand that the living wage should be seen in the context of hourly pay. She is right to say that employers look at the total wage bill and look for other changes, but she should not conflate the two. I think she wants to support the Government’s intention of increasing the hourly pay of workers. Does she agree?

[Angela Crawley]

We can agree that workers deserve a real living wage, but this is not a real living wage. To go back to my argument, it is merely an enhanced minimum wage. While I would welcome a living wage, this does not meet the mark. Sadly, this does not even apply to those under 25. Try telling a 17-year-old part-time worker that their work is of less value than that of someone who is a few years older. Is that really what we think of our young people? Is that really the value we place on the work of our young people, who are all too often forgotten in this Government’s priorities?

The term “living wage” is important. In Scotland, we recognise that. We set a target to have 500 real living wage employers by the end of this Parliament and we have already exceeded it. Last year, the Scottish Government announced that they had become an accredited living wage employer. The SNP Government have introduced a requirement to pay the real living wage as an integral part of the public sector pay policy. Since 2011, we have invested £1.5 million per year in paying the living wage rate across the parts of the public sector where the Scottish Government control the pay bill, directly benefiting 3,000 workers. Scotland has a higher proportion of workers who are paid the living wage than any other nation of the UK.

There are some positive examples in my constituency, such as Hamilton citizens advice bureau, Bluebird Care in Larkhall, the medical centre in Lanark and Emtec contractors in Uddingston, all of which are leading the way as real living wage employers and showing what can be achieved. In many ways, what the Government are doing will undermine the incentive for employers to achieve a real living wage.

Despite what the Government have said, they must do more to ensure that no worker is worse off as a result of this change. We have all seen the worrying reports about employers mitigating the cost of the new rate by cutting hours and premium rates for overtime and bank holidays. The hon. Member for Mitcham and Morden asked the Prime Minister whether he would guarantee that no worker would be worse off as a result of the national living wage, but she never received a response. Perhaps the Minister will give that commitment today.

[Rebecca Pow (Taunton Deane) (Con)]

I am depressed by the negativity of this debate. People who have come to me in my constituency are pleased that they will have £900 more in their pockets. Some 40% of people will get a wage rise. This is something that the Government have been speaking up for. People want more money in their pockets and they are going to get it. On the whole, businesses in my constituency are in favour of the national living wage. It is difficult, but they are for it.

[Angela Crawley]

Although it will always be welcome if people have more pennies in their pocket, the Government are not looking at the full picture. When cuts to universal credit outweigh any benefit from the so-called national living wage, how can it be defended as a national living wage at all?

[Gavin Robinson (Belfast East) (DUP)]

My constituent, Andrew Larmour, sent me a message to say that although he got a pay rise on 1 April because of the living wage, he received a pre-printed letter on 31 March about a change of circumstances for his benefit entitlements, which indicated that he will not be better off but worse off.

[Angela Crawley]

I thank the hon. Gentleman for making that valid point.

Despite the Chancellor’s claim that the lowest-paid workers need a pay rise—indeed, they do deserve a pay rise—his actions will result in the rich getting richer while people in low-wage jobs see no real benefit. Indeed, they will experience an erosion of any employer benefits that they once had.

It is telling that the Government believe that women will benefit most from this change in policy, because it means that they recognise that women are more likely to be stuck in minimum wage, part-time, uncertain employment. That tells the story of gender inequality, whereby women are systematically paid less than men. It perpetuates the gender pay gap—something that the Prime Minister has pledged to end in a generation. His deeds do not appear to be matched by words. Once again, the Government know the cost of everything and the value of nothing.