National Minimum Wage

Chris Ruane Excerpts

Wednesday 15th January 2014 Commons Chamber

[Chris Ruane (Vale of Clwyd) (Lab)]

I was elected in 1997 in a Labour landslide on a manifesto with a commitment to introduce the national minimum wage. It was Keir Hardie who, in 1906, put forward the idea of a national minimum wage and it took almost 100 years to deliver it. Incidentally, he also proposed devolution for Wales, Ireland and Scotland and reform of the House of Lords. Both of those were introduced after Labour’s historic win in 1997.

When I was a parliamentary candidate in 1996, I organised a low-pay survey in my constituency. The person who came out top—or should I say bottom—was a taxi driver who was on £1 an hour. There were other incidences of women in the care sector who were working 12-hour night shifts for £2.50 an hour.

Seaside towns such as Rhyl probably benefited more than anywhere else from the introduction of a national minimum wage. A table produced by the House of Commons Research Department shows that 29% of those who worked in hotels and restaurants and in the entertainment industry were affected by the national minimum wage. In seaside towns, we have a huge number of care homes and the second biggest sector to benefit, at 15.1%, was the one that undertakes community and social services activities. Seaside towns have done really well under the national minimum wage.

Could any of us in the Chamber today work for £1 an hour or its equivalent today? Could we have brought up our families on £2.50 an hour, working throughout the night? I have a great deal of respect for the hon. Member for Harlow (Robert Halfon) on these issues, as he is what I would consider to be a compassionate Conservative, but he said that he was concerned about unsustainable levels when this is about trying to increase pay for people on the lowest rung by 50p or £1 an hour. We never hear about the unsustainable levels of high pay. For example, two captains of industry in the energy companies were given £14 million and £15 million golden handshakes without a peep from the Conservative party. It is one law for the rich and one for the poor.

[Mr Anderson]

My hon. Friend spoke about care workers’ pay before the 1997 election. I was then a negotiator for care workers in the public sector, who were getting at least £5 an hour—twice as much. We introduced this legislation because people were being exploited by private companies. Is that not the same worry that we see today?

[Chris Ruane]

I concur entirely.

When we want to improve the efficiency of businesses, we say that we must pay those at the top as much as we can to reward their energy and enterprise and that we must reduce the pay of those at the bottom because it is in their own best interest. There is one rule for the rich and one for the poor.

[Katy Clark]

Of course, we did not hear from the Secretary of State this afternoon about the fact that although most people in this country face a cost of living crisis and although wages are going down for the vast majority, those at the top are doing very well, thank you very much. The salaries of chief executives and those at the top are soaring. At the time of the 1997 election, we heard time and again that we could not afford the national minimum wage. Does my hon. Friend agree that the arguments we are hearing now should be treated in the same way as those arguments were then?

[Chris Ruane]

Absolutely. The Conservatives were whingeing when I raised these points, but it is obscene that the Chancellor of the Exchequer scurries off to Brussels to protect the multimillion pound bonuses of British bankers at the same time as he is reducing workers’ rates by £1,600 a year.

[Stephen Barclay (North East Cambridgeshire) (Con)]

Will the hon. Gentleman give way?

[Chris Ruane]

No, I will not.

More than 7,000 people have visited me in Parliament since I was elected in 1997. Many have been schoolchildren and sixth formers. I always allocate a good period of time for questions and one of the most common questions is, “What are you most proud of from your 16 years as an MP?” I am most proud of this piece of legislation, which Labour introduced in 1998. It is totemic. It was an indicator at that historical time of what Labour was about and what the Tories were about. We were for the many and they were for the few. I welcome the massive U-turn that the Conservatives have made on that, but it is too little too late.

[Mr MacNeil]

rose—

[Chris Ruane]

I am afraid that I must make progress, as I am now using up my own time. I thank my hon. Friends the Members for Blaydon (Mr Anderson) and for North Ayrshire and Arran (Katy Clark) for their interventions as they gave me an extra two minutes, which I am eating into now.

The policy was resisted tooth and nail by the Tories. The House sat for two days in the Chamber and there were 70 hours of debate in Committee between 22 January and 17 February 1998. The Tories made the direst predictions about the introduction of the national minimum wage, predicting that 2 million jobs would be lost and every single person who received an increase would be sacked. That was absolute nonsense; an extra 2 million jobs were created.

The then Secretary of State for Wales, the right hon. Member for Richmond (Yorks) (Mr Hague), said:

“He is right: the adoption of a minimum wage and the social chapter would gravely inhibit employment opportunities in Wales. There is no question about that.”—[Official Report, 27 February 1997; Vol. 291, c. 461.]

What about when the Conservatives were closing down the steel mills and the coal mines in south Wales? Did that gravely inhibit employment opportunities in Wales? He said:

“Adoption of the social chapter and a minimum wage would price tens of thousands out of their jobs along with hundreds of thousands throughout the rest of the United Kingdom.”—[Official Report, 17 March 1997; Vol. 292, c. 609.]

He was on the mild side in referring to hundreds of thousands; the Conservative party nationally was predicting 2 million job losses. The Conservatives fought tooth and nail against the legislation, but it was passed. That is the proudest moment of my time here in the House.

In my constituency, we saw no job losses. We saw the number of people in employment go from 23,000 to 30,000. The St Asaph business park, which was built by the Conservatives in my constituency at the cost of £11 million, was empty for seven years. When Labour came to power, it was filled, and there are now more than 2,000 jobs on the park.

The national minimum wage legislation is fantastic, but we should not rest on our laurels. We need to move upwards and onwards to the next frontier, which, as has been mentioned by hon. Members, including shadow Ministers, is zero-hours contracts and a living wage. We need to push for better conditions and better payments for workers. That is in the best interests of those workers, their families and the economy.