National Minimum Wage

Debate between Chuka Umunna and Sheila Gilmore

Wednesday 15th October 2014 Commons Chamber

[Mr Umunna]

As I was saying earlier, there would have been no national minimum wage or any fines if it were not for the last Labour Administration, but I take the hon. Gentleman’s point that fines need to be increased, and I will come to that very shortly as he makes a good point there.

[Sheila Gilmore (Edinburgh East) (Lab)]

Will my hon. Friend comment on the experience of my constituent whose fixed-hours part-time job, which fitted in with school hours, was changed recently by a very respectable employer—a large department store, not some unscrupulous employer—to a zero-hours contract in order to make her terms more flexible? She had to stop work because she could not find the child care to help her. That is surely the sort of contract we must do something about.

[Mr Umunna]

Well, that is it, and that is precisely why we will introduce a far tougher package than the sole measure we have seen on zero-hours contracts from the Government, which is basically just a do-away with exclusivity on those contracts. That is simply insufficient given the story that my hon. Friend has just told—and I would be very interested to know who the employer was.

The third point I want to make on the changes we need is that, when the minimum wage was introduced, the hope was that it would have a ripple-effect causing wages to rise up the income scale, but that has not turned out to be the case. Frankly, it is becoming the going rate in some sectors, as my right hon. Friend the Member for Birkenhead (Mr Field) alluded to. This explains why 1.2 million employees currently just earn the legal minimum. That is up from just over 600,000 in April 1999, so we have seen a considerable increase in the number of people on the minimum. Therefore, in its beefed up role, we will ask the LPC to advise on what sectors of the economy could afford to pay more than the minimum wage and how that could be achieved.

Finally, enforcement has been mentioned, and much more needs to be done on that, as the hon. Member for Salisbury (John Glen) said. There has in some respects been a systematic failure in the way the minimum wage has been policed. To address that, we will give local authorities, working alongside Her Majesty’s Revenue and Customs, powers to enforce the law, and we will increase the fines tenfold for rogue companies that do not meet their obligations. In this way, we will evolve the national minimum wage so that it moves beyond the narrow task of setting a minimum wage to avoid extreme low pay to a broader mission to reduce low pay in Britain. As far as the Minister’s party is concerned, I discern no desire to move beyond the status quo and the current arrangements.