National Minimum Wage

Debate between Angus Brendan MacNeil and Alec Shelbrooke

Wednesday 15th January 2014 Commons Chamber

[Mr MacNeil]

Is not this debate about the division of the spoils of productivity? We are looking for a division that is more like that of the 1950s, when those at the bottom were given a larger percentage than they get at the moment and those at the top got a smaller percentage. We now have a share-out of the spoils that is creating a level of inequality between sectors of society that we have not seen since the 1920s.

[Alec Shelbrooke]

I am grateful to the hon. Gentleman for giving me that extra minute. I will come to my own history lesson in a moment. He will of course welcome the fact that under this Government the gap between the poorest and the richest in society is the smallest it has been for 30 years, having grown under the previous Labour Government.

Let us talk about the problems of falsely increasing wages and go back to the 1970s. In 1975, my parents, who were young teachers, were given a 25% pay rise under Harold Wilson and were delighted with it. Twelve months later they suffered a 3% pay cut, because inflation had gone up to 28%. We also remember the then Labour Chancellor, Denis Healey, demanding wage restraint at the Labour party conference, only to be booed by the floor. Having listened to this afternoon’s speeches, I am sure that some Members present would boo him now, too.

Wage inflation creates a real problem for people on fixed incomes who have worked hard their entire lives and paid into private pension funds, only to then see them eroded by inflation running out of control. For example, in 1965 my great uncle retired at the age of 65 on what was then a very reasonable pension of £15 a week. By the mid-1970s it was absolutely worthless.

If we go ahead with wage inflation in the way suggested by the Labour party without linking it to cutting taxes for business and making sure that it is sustainable, we will end up, as Neil Kinnock said, with a Labour council running around the city in taxis, giving out redundancy notices.