Poverty

Baroness Donaghy Excerpts

Thursday 22nd July 2010 Lords Chamber

[Baroness Donaghy]

My Lords, since I was introduced on 1 July, I have been overwhelmed by the warmth of my welcome and the generosity of noble Lords on all sides of the House in sharing their experiences with me. I am grateful, too, for the dedication and friendliness of the staff, who seem to be able to read my mind when I am uncertain about geographical direction or procedure. I thank them most sincerely for their care and support.

As a former chair of ACAS, my first instincts are to form a consensus based on bringing the parties together. I am not sure whether those skills will be useful in this House. I know from experience that, when the going gets tough, it is difficult to promote agreement between employer and workers but that it is infinitely more difficult on occasion to achieve agreement among members of the same side. If the coalition Government were ever in need of mediation skills, I would be available.

ACAS’s contribution to the modernisation of public services was to recognise that the world of work was not just about collective bargaining but about the millions of individuals, both employers and employees, needing advice. Radical changes were achieved with the involvement and consent of the staff and trade unions in ACAS, and without the demotivating effect of so many pronouncements about public service workers. Calls to the ACAS helpline amounted to 1.2 million last year, and the website is much praised by employers and employees because of its quality and impartiality.

The subject of poverty has been a theme that has threaded throughout my life. On the day of my introduction to this House, one of my cousins gave me a copy of a payslip belonging to our late grandfather, Arthur Howard. It was for £1.53, dated 11 November 1933, and came from New Monckton Collieries near Barnsley, where he worked for most of his life. He brought up four daughters on that wage, played the cello and built the first television in Worsbrough Common. He had no money but a wealth of talent and unfulfilled promise. My own parents taught me the value of work, education and caring for others.

After university, I worked at the Institute of Education in London for 33 years. I had become an assistant registrar at a very early age and was probably destined to be a registrar or secretary, or to fill a role with one of the newer titles in universities today. I was fortunate to work for the great Lionel Elvin, our director, who had been a member of both the Robbins and McNair committees, and then with Sir William Taylor. Both instilled in me the importance of teacher training and education. So what happened to change me from going in the direction of a potentially glittering university career?

The institute took a decision in 1969 not to give a pay rise to its clerical and library staff on the ground of affordability. Academics were given a pay rise. I decided that it was patently unfair to pick on the lower paid and helped to form a union branch of NALGO. No one had ever been in a union before. We lobbied the institute and were awarded our pay rise, backdated. I carried on recruiting members and for 16 years was privileged to represent all clerical and related staff in universities in their pay negotiations, and set up national pay scales for the first time. Ninety per cent of the members were women and 90 per cent were first-generation trade union members. I spent most of my career boxing and coxing between my paid employment and my unpaid trade union activity. I moved within the institute to become permanent secretary of the students’ union and was licensee of the union bar for 16 years. I am aware that some noble Lords on different sides of the House have owned breweries, and it is possible that some of them have been their occasional customers, but I suspect that very few have actually been licensees.

After 13 years on the TUC General Council, I became its president. I would chair the General Council and then sometimes appear before the magistrates’ court to apply for an extension to opening hours in the students’ union bar. Such were the contrasts in my dual life.

In 1997, the continuing theme of poverty arose when I was appointed a founding member of the Low Pay Commission. This was an absolutely wonderful experience, and I like to think that my practical experience of wage structures and the impact of low wages helped to set up a framework that is virtually intact today. We learnt that poverty is complex—a single mother in the south-east would have to earn over £17 an hour to make up any loss in benefits—yet we fixed on £3.60 an hour because the minimum wage cannot solve everything. We learnt that poverty is not a north/south or even a regional phenomenon. The largest proportion of low-paid workers, in terms of population, live in London and the south-east. We also learnt that the low paid need no lessons in hard work or the ability to calculate their earnings. Observing textile workers calculate their complex piece-rate earnings in their heads to the nearest penny would impress any mathematician.

The noble Baroness, Lady Wilcox, in moving the regulations concerning the national minimum wage on Monday, was kind enough to say that the proposed increase for this October,

“strikes the right balance between ensuring that low-paid workers are treated fairly and preventing adverse economic effects. It is based on sound evidence and consultation, and takes into account the present economic circumstances”.—[Official Report, 19/7/10; col. 888.]

Those criteria were established at the start of the Low Pay Commission’s work, and it is gratifying to see that this evidence-based work continues and is appreciated by the Government.

I am aware of the recent short debate on poverty on 15 June, initiated by the noble Lord, Lord Kirkwood of Kirkhope, and of the excellent contributions that were made. It is not my intention to go over the same ground. I am aware that the measure for poverty might seem like a dry academic debate to some, but if an official poverty measure is changed, it can be used as a respectable excuse for taking away support systems from those who do not fit the new criteria. The Government have promised to maintain the target of ending child poverty in the UK by 2020, and I shall watch this with interest.

There are people now seeking work who are healthy and motivated and have a good employment history, but they cannot find work, so how will those with disabilities, language and literacy barriers or no work record find work? Joblessness is a scourge on any society and the Government will be judged on how many people are unemployed. The margin between poverty and just about managing is perilously narrow. Cutting pennies here and there from benefits, VAT costs, pay and pensions may not seem a lot to those who are privileged to lead society, but together they will have a catastrophic outcome for individual families.

We are a country of extremes in income and no Government have solved that particular inequality. I make a plea to this Government that more work should be done on why we are a relatively low-wage society. Average earnings of £24,000 a year include paid overtime—mainly done by men—and City bonuses. That completely distorts the real situation. Just as we on the Low Pay Commission discovered, women who earned too little to pay national insurance did not appear on any statistics and could not therefore be counted as a group that might benefit from a national minimum wage. Clearly, steps were taken to rectify the Alice in Wonderland situation, but it shows that statistics without common sense and grounded reality can be used to hold back progress, sometimes unintentionally and sometimes not.

The Economist on 3 July stated:

“The past decade made a disappointingly small dent in poverty, but it may be the best time the poor will know for many years”.

I look for an assurance from Ministers that that grim forecast will not be realised.

In conclusion, I thank my two sponsors, my noble friends Lady Dean of Thornton-le-Fylde and Lord McKenzie of Luton for all their help and encouragement. I offer particular thanks to my noble friend Lord McKenzie for raising this topic today and for giving me an opportunity to make my maiden speech on a subject about which I feel so passionately.