National Minimum Wage
Debate between Brian H. Donohoe and Russell Brown(9 years, 6 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Brown
I thank my hon. Friend. Yes, we have moved on, but the fear among Opposition Members is that we are starting to slip back. In those days it was women, in particular, who were having to hold down two or three jobs in order to make ends meet. I see the same thing returning but, more worryingly, it is not only women, but men who are having to hold down two or three jobs.
Mr Brown
Yes, this is about the whole employment method. We cannot deal with this just with a stand-alone national minimum wage. When we came to office we had the windfall levy on the privatised utilities, which allowed us to introduce the new deal programme for young unemployed people, the long-term unemployed, the disabled and lone parents, and then we introduced the tax credits system. It was about pulling together two or three strands to make things work, and that led to a step change in people’s standards of living.
Mr Brown
I refer to the coalition Government in that regard—credit where credit is due—and I will come to that point later.
With regard to the reduced levels of unemployment, we need to look at the figures from the Office for National Statistics for the weekly average number of hours worked across the country and compare them with the number of people working over the past 12 to 18 months. Although more people are working, we have not seen an increase in the number of hours being worked on a pro-rata basis. What we are seeing—this relates to the point about zero-hours contracts—is that more people are in part-time work or working shorter hours. Some people are desperate to grab four or six hours in order to supplement a job they are doing elsewhere. The unemployment figures might be falling, but the overall number of hours being worked across the country is not increasing at the level we would have expected for the number of people now in employment.
People need job security, but we are seeing a scale of job insecurity in this country that we have not seen for many years, so I challenge Government Members to say that we have not gone backwards in some respects. I hate to say it, but there are some unscrupulous employers who are prepared to exploit zero-hours contracts and short-term working for people who are prepared to do a hard day’s work if given the chance. I also want to mention migrant workers, because I was talking about that with three or four guys I met five or six weeks ago. They were very angry, and not about the migrant workers they were working with, but about the fact that their employer was exploiting the situation in order to keep wages low, with local indigenous workers paying the price.
I want to mention the personal tax allowance again, because it is a big issue. I applaud the aim of taking people out of tax. I have challenged Treasury Ministers on this, as has my hon. Friend the Member for Edinburgh East (Sheila Gilmore), because many people are not working enough hours to come anywhere close to paying tax. The fact is that it is the rich, or those in well-paid jobs, who reap the benefits of the personal allowance changes. I also recognise that there is always a narrow band of people who benefit, and if we shift or change tax bands and tax rates, some people will be more heavily penalised than others.
Mr Donohoe
This is an increasingly important subject. We must also consider the fact that north of the border, as my hon. Friend will know, many local authorities are talking about not only a minimum wage, but a living wage, because of the problems associated with the minimum wage. Does he agree?
Mr Brown
Yes, I think that it is about a step change. We need to recognise that we should do whatever we can to increase the quality of life and lessen the impact of the cost of living on households. My local authority will be looking long and hard at that issue and imploring the businesses it offers contracts to—we know that we cannot demand it—to pay a living wage.
In 1997, we were told that we would lose millions of pounds as a result of a national minimum wage, but my party had clearly done our homework while in opposition, because the figures showed that when we give £1 million to the lowest-paid people in any community, they will go out and spend it, which creates 35 to 40 jobs in the community. That is what we saw. Some people in my area saw businesses shedding jobs, because the type of work they were doing was coming to the end of its life, and they could not understand why unemployment levels were still low. Unemployment was falling simply because we were putting money into the local economy.
I will return to a point that was made when we were discussing the benefits increase earlier this year. The figures clearly show that freezing benefits for the lowest-paid people over a three-year period took £6 billion out of the local economy. Giving some of the poorest paid extra money stimulates the local economy.