National Minimum Wage

Charlie Elphicke Excerpts

Wednesday 15th January 2014 Commons Chamber

[Rachel Reeves]

Not only are Government Members not 100% behind the national minimum wage; they cannot even bring themselves to say “national minimum wage”.

[Charlie Elphicke (Dover) (Con)]

The Government are asking the Low Pay Commission to review the minimum wage with a view to increasing it. Does the hon. Lady welcome that—yes or no?

[Rachel Reeves]

The hon. Gentleman is a little behind the curve. That is what the Low Pay Commission does: that is what we set it up to do.

The failure to enforce the legislation properly has contributed to a worrying rise in in-work poverty. It used to be thought that if someone got a job, put in the hours and put in the effort, they would be paid enough to keep them and their family out of poverty and have a decent standard of living—that was the deal. But today, for the first time since records began, the majority of people in poverty are in work and the majority of children in poverty are brought up in working households. It is just not good enough that in today’s Britain an honest day’s work does not bring in a decent day’s pay.

--- Later in debate ---

[Vince Cable]

In line with the commitment to enforcement, I think we have produced more resources for that. My hon. Friend the Economic Secretary to the Treasury, who will be summating, may want to say a little more about that, but we recognise that the enforcement authorities need resources to do their job.

[Charlie Elphicke]

I thank my right hon. Friend for giving way. As a Conservative Member of Parliament representing a constituency with a lot of social deprivation, I support the national minimum wage and the work of the Low Pay Commission, which is really important. In response to my intervention, the shadow Secretary of State dismissed the Low Pay Commission and talked about restoring the value of the minimum wage. Does my right hon. Friend know what exactly restoring the value of the minimum wage means and how much that would cost?

[Vince Cable]

I welcome the hon. Gentleman’s support and I know that it is shared among his colleagues. This is a historical issue: it has now been laid to rest. I will talk a little more about the mandate of the Low Pay Commission and the fact that successive Secretaries of State, including me, have respected its judgment, which is non-political, non-partisan and represents both the union and employer standpoint.

Let me talk about the wider economic consequences. The shadow Secretary of State talked with a real sense of righteous indignation about things that are, frankly, blindingly obvious. We have had a massive financial crisis, the biggest in our history—certainly in modern times. As a result, the country is poorer. That is a matter of fact. It is not a polemical point: the country is poorer, and that has been translated into lower earnings. That is simple economic reality and nobody is disputing that.

In the wake of the economic crisis in 2008-09, we now know that British GDP fell by 7.5%. That was more than after the great crash in 1929 and worse than in any other western country. I am not going into the business of who did what when; I am just recording a matter of fact. Recession inevitably followed the financial disaster and real earnings have been affected. The shadow Secretary of State is right on simple matters of fact: real earnings fell by 7% and the minimum wage fell by 5%. That is a matter of fact. What I find so very difficult to understand is that the Opposition Front Benchers—it is not just her; her colleagues are the same—have seen the greatest economic disaster in modern economic history and apparently not noticed it, and they have not taken any account of the inevitable economic consequences. What matters is that the Government of the day seek to mitigate those effects.