Age Discrimination: National Living Wage

Debate between Cat Smith and Geraint Davies

Wednesday 8th June 2016 Westminster Hall

[Cat Smith (Lancaster and Fleetwood) (Lab)]

As ever, it is a pleasure to serve under your chairship, Mr Davies. I congratulate my hon. Friend the Member for Halifax (Holly Lynch) on securing this important debate. She absolutely hit the nail on the head when she said this policy is a kick in the teeth for young people. That comment was certainly well received by the Chair.

The Government are sending a worrying message about the generations by pitching them against each other. They are leaving an open goal. They are saying to young workers, “You are not as valuable as older workers.” During the debate we have heard some worrying examples of employers trying to circumvent the fundamental purpose of the increase in the minimum wage by deliberately hiring under-25s. What we have not heard, and I hope the Minister will rectify this, is an indication of a clear strategy from his Government as to how they will ensure that the so-called national living wage is not used by a small number of unscrupulous employers to manage out staff aged 25 or over or to change terms and conditions in a way that would fly in the face of provisions enshrined under the Equality Act.

As part of the shadow Equalities team, I must say that it does not come as a huge surprise that the Government have once again failed to consider equality. We have a Prime Minister who has referred to equality impact assessments as “pointless reports” and “bureaucratic nonsense” and who refuses to conduct a cumulative impact assessment of Government policies on women since 2010. In lieu of that, the Labour Equalities team commissioned research from the House of Commons Library that showed that, as of the Chancellor’s last Budget, 86% of the net savings to the Treasury through tax and benefit changes since 2010 have come out of the pockets of women. The Government appear to talk the talk on equality, but they fail to put in place the fundamental work to ensure that, advertently or otherwise, certain groups in our society do not end up the losers as a result of Government policy.

The Government could have worked in collaboration with key partners such as the Living Wage Foundation or the University of Loughborough to help to pilot the higher rate minimum wage before it went live, but instead it was rushed through so that the Chancellor could score a political hit at the Budget with a shiny new policy. The Government have self-appropriated the term “living wage” to mean their age-restricted minimum wage. That is what it really is, as it is based on median earnings, while the Living Wage Foundation rate is calculated according to the cost of living. That cost of living is the same for young workers as it is for older workers. I have never met a landlord who is willing to rent out a property for less money to someone who is under 25, or a baker who is willing to sell a loaf of bread for less because the person wanting to eat it is under 25. It costs us all the same to live.

We have seen the Government pinch and misappropriate a term to describe a policy pushed through without any proper equality safeguards. Some of the key questions posed during the debate must be answered. What safeguards are in place to ensure that employers cannot manipulate the terms and conditions of their staff to make them worse off as a result of the new higher national minimum wage? What strategy is in place to ensure that workers under 25 are not exploited and that the provisions of the Equality Act are not breached? Will companies be named and shamed? Will there be financial penalties? The Government must put their declarations of being a party of equality into action and demonstrate they are serious about that by answering those basic questions and ensuring that safeguards are in place for young people and all employees in the workplace. Of course, all that could have been thought through much earlier, had the policy not been rushed in the first place.

Young people deserve a better deal than the one they are getting from this Government. What message are the Government sending to young people with wages low, maintenance grants for the poorest students cut and voter registration rules cynically changed to lock young people out of democracy? The number of young people owning their own home is at its lowest level since records began. University tuition fees have trebled. It seems very much that the Government are not on the side of young people, and I fear that the consequences will be severe.

Even the former Tory MP David Willetts, who now heads the independent Resolution Foundation, has said that the Government are creating a “country for older generations”, in which pensioners benefit from constantly rising incomes while the young, their families and children—under-25s can have a family and children—are battling constantly rising prices and falling incomes. He said:

“The social contract is a contract between the generations and in Britain it is being broken.”

The Government must not leave the next generation out in the cold and take them for granted. It seems that the policy of a minimum wage only properly kicking in at 25 has been dreamt up with an idea of young people who perhaps go through higher education and do some internships while living at home with their parents. The reality for many young people is that they are an adult at 18, leaving home and standing on their own two feet. I call on the Government to integrate equality into their thinking right across their policy, so that all groups in society are treated equally.

[Geraint Davies (in the Chair)]

Before I call the Minister, may I make it clear that my somewhat ambiguous utterance in response to one of the comments made by the mover of the motion should not be interpreted as an affirmation? I am completely impartial in my job. Over to the Minister.