Living Wage

Chris Stephens Excerpts

Thursday 3rd November 2016 Commons Chamber

[Chris Stephens (Glasgow South West) (SNP)]

It is a pleasure to take part in this debate. I congratulate the hon. Member for Mitcham and Morden (Siobhain McDonagh) on securing the debate. I know that she has been a tenacious campaigner on the issue and has contacted many MPs about it. I am pleased to support the motion in her name.

It has been an excellent debate. I look forward to the hon. Member for Bishop Auckland (Helen Goodman) telling us on a future occasion what the pay rates of the butlers and housekeepers are in Mr Morrison’s castle. I want to pick up on some of the themes in the speeches of the hon. Members for Halifax (Holly Lynch) and for Oldham West and Royton (Jim McMahon) in particular.

As others have said, the UK Government’s national living wage is not a living wage, but an additional tier of the national minimum wage. The national living wage does not benefit those under 25, who still face the lower rates of the national minimum wage. I view that as direct discrimination against young people. Differential pay for young workers is not acceptable and our long-term aspiration should be that the living wage becomes the norm across the board. There is no justification for paying people in their early 20s 25p an hour less than those who are younger.

Let us take the example of two workers in a fast food outlet, one aged 17 and the other aged 37. If they are both flipping hamburgers in that fast food outlet, surely they should be paid the same, but they are not. One is paid £4 an hour and the other is paid £7.20 an hour. Because of the way the Government have done the calculation and added the living wage to the national minimum wage, for someone who enters employment at 16 or 17 and stays with that employer, it will take eight or nine years to qualify for the highest minimum wage rate. No employer in the UK would keep a worker on a grade for that length of time before they reached the top of their pay scale. This is clearly discrimination against young workers, and it is one of the reasons why today’s young generation is likely to be poorer than generations before them.

There has been no adequate explanation in this debate of why the living wage applies only to those aged 25 or more. More importantly, as the hon. Member for Mitcham and Morden pointed out, the real issue is the enforcement of minimum wage rates. The National Audit Office confirmed last year that 209,000 workers were not paid the national minimum wage. That is a scandalous figure, and the pernicious practices of rogue employers who are trying other means to get round paying the living wage should be investigated. These are multinational companies that should be paying their tax and are not doing so. That should be addressed.

I support the comments of the right hon. Member for Orkney and Shetland (Mr Carmichael), who made the very serious point that somehow seafarers are exempt from the living wage and the national minimum wage. I hope Members will consider signing early-day motions 231 and 516 on this subject. The information that I have from the RMT is that seafarers are paid less than £2 an hour, which starkly illustrates the issue.

The so-called national living wage relates to average earnings, not living costs, and therefore cannot be a living wage. It is calculated according to the adequacy of household incomes for achieving an acceptable minimum living standard.

In Scotland the SNP continues to set the bar on fair work. On Monday 31 October the First Minister welcomed the new rate of the real living wage of £8.45 an hour, which will benefit thousands of workers in Scotland, and urged more Scottish organisations to sign up as accredited living wage employers. Peter Kelly, director of the Poverty Alliance, said on Monday:

“Today’s announcement of the new, increased, Living Wage rates of £8.45 brings a welcome pay rise to thousands of workers across Scotland. 430,000 people in Scotland still earn less than the wage they need to get by. This is an increase on the number of people struggling since last year’s figures. That’s why it’s more important than ever for leading employers to join the growing movement of businesses and organisations that are going further than the government minimum and making sure their employees earn enough to cover the real cost of living.”

The knowledge exchange project, carried out by the University of Strathclyde and the Living Wage Foundation, has found that implementing the real living wage encourages businesses to re-evaluate their approaches to staffing and payment, leading to more effective and efficient working patterns. Implementing the real living wage encourages businesses to re-evaluate their business model and increases skills development, staff performance, job satisfaction and staff retention.

According to the New Economics Foundation, one study found that when employers transitioned to paying staff at least the real living wage, they experienced significantly lower rates of staff turnover, reputational benefits, a reduction in sick leave, better motivated staff and an increase in productivity. A massive 80% of employers felt that their staff delivered better quality work after paying them the real living wage, with 75% of employees agreeing that their work was improved. One major UK firm found that paying contractor staff the real living wage cut staff turnover by half, saving it £75,000 on the value of a single contract.

There are now more than 624 Scots-based living wage accredited employers paying the real living wage, and the SNP Government have set a target of 1,000 by autumn 2017. I want to thank those living wage employers in Glasgow South West, including housing associations, Money Matters, Ypeople, Lifelink and Agripa, which is a local printing company.