Terms and Conditions of Employment

Gillian Keegan Excerpts

Tuesday 19th February 2019 Commons Chamber

[Gillian Keegan (Chichester) (Con)]

I am pleased to see the national living wage and the national minimum wage continue to increase and support the lowest paid. Those on the minimum wage often have the hardest jobs, and those jobs are vital to our daily lives. Carers are just one example; many of us who have a cared-for relative know just how demanding and invaluable—indeed, priceless—such work is. We need to make sure that carers and many on the minimum wage are properly rewarded for their work, as everybody should be. The Government have made some promising steps, with net wages for people on the minimum wage increasing by 39% since 2010.

It is estimated that 2,600 people in Chichester are on either the national living wage or the national minimum wage, and they are all set to benefit from the above-inflation increases to their hourly rate. They represent about 6% of the local workforce, and Chichester chamber of commerce and industry has welcomed the Government’s acceptance of the Low Pay Commission’s recommendations. The CCCI has said that Chichester businesses want to recruit the very best employees, and this needs to come with a decent wage. I completely agree. I am encouraged by the fact that the CCCI does not foresee any adverse effects on local businesses from of the proposed increases.

I am not saying that raising the minimum age alone is the silver bullet, but the proposed increases mean that the earnings of a full-time minimum wage worker will increase by more than £2,750 annually from next year—that represents a number of Freddo bars. That good news comes on top of other Government measures, such as increases to the personal tax allowance.

I also celebrate the 20p increase to the hourly rate for an apprentice, which represents by far the biggest proposed increase—a 5.4% rise on current rates. That will be a welcome boost to the pockets of the 540 people who started an apprenticeship this year in Chichester, although we should not forget that this is a minimum wage and many people pay apprentices above the minimum wage. I was an apprentice at 16, more than 30 years ago, when the Labour policy was not to pay me the same minimum wage as someone aged 50. It seems that that could be the policy Labour is about to introduce, according to their Front Benchers. In addition, apprentices are getting valuable new skills, which are sponsored and paid for by their employers. As a newly appointed apprenticeship ambassador, and with National Apprenticeship Week coming up, let me use this opportunity to say that, along with learning the necessary skills, this increase will be one of the benefits of taking the apprenticeship route into the workplace. I will be welcoming that.

Unemployment is at an all-time low under this Government. Only 1.2% of people in Chichester are unemployed, so the jobcentre’s aim to get everybody a job, then get them a better job and then move them into a career is a realistic ambition. The minimum wage will help along that journey, so I welcome the proposed increases and I am pleased that we are on our way to making the national living wage reach 60% of median income by 2020. Hard-working people deserve an income that reflects their importance to our economy and the services we rely on daily. We all want to make sure that work pays, and I think these inflation-beating increases are a good step in making that a realistic prospect.

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[Alison Thewliss (Glasgow Central) (SNP)]

I know that many Members across this House share my concern that Brexit and the removal of hard-won EU legislation will mean a race to the bottom for workers’ rights in the UK. In that respect, it is at least a little bit encouraging to see a commitment to continuing to increase minimum wages; however, as I have said time and again in this place, it does not go nearly far enough. The UK Government’s pretendy living wage is not enough to live on. The real living wage, as calculated by the Living Wage Foundation, is set at £9 an hour, or £10.55 an hour in London; the pretendy living wage falls short of that. For those of us who want a highly educated, highly skilled, high-wage economy, it continues to be extremely disappointing that the UK Government choose not to increase the minimum wage to a level people can actually live on.

High wages are linked to increased productivity—an issue the UK has struggled with for many, many years—increased staff retention and higher standards of workers. A substantial increase in wages is not a choice between acting in the interests of businesses and acting in the interests of employees; it is entirely possible to cover both. The attitude that I am hearing from Government Members is that the national living wage falls short of a real living wage, but we should celebrate it anyway because it represents a pay rise for working people. That shows a real lack of aspiration on the part of the UK Government—a Government who claim that they want to help people work their way out of poverty but whose actions fail those people time and again.

If this UK Government really wanted people to work their way out of poverty, they would be investing in our labour markets, increasing the powers of trade unions and improving the rights of those in insecure work. They are presiding over one of the lowest rates of real wage growth among the advanced nations of the G20. Andy Haldane at the Bank of England has described the past 10 years as “a lost decade” for workers, and the measures today will do very little to address that problem.

As things stand, the Chancellor is giving with one hand and taking away with the other. For those at the lower end of the income scale, the proposed increase in the minimum wage does not even offset the impact of the benefits freeze. I and my hon. Friends have consistently called for an end to the benefits freeze, which is a pay cut by stealth for some of the lowest earning people in this country. We welcome the Labour party’s commitment to scrap it, even if it did not feature in its 2017 manifesto.

The age pay gap is the income inequality that the national minimum wage policy creates between age groups. The Department for Business, Energy and Industrial Strategy impact assessment on the policy explicitly states that the purpose of a lower minimum wage for under 25s is to

“maximise the wages of low paid younger workers, without damaging their employment prospects.”

It also says that the Government asked the Low Pay Commission to recommend separate national minimum wage rates

“by age band (16-17, 18-20 year olds, and 21-24 year olds).”

There is no real evidence to justify why that is necessary. It is insulting to young people in my constituency and across these islands to say that employers would not want them if they had to be paid a fair wage; quite apart from that, it entices employers to make hiring decisions based on age, encouraging unscrupulous employers to break the law.

Make no mistake, this is state-sponsored age discrimination. In the impact assessment, the public sector equality duty sets out that the Government must

“eliminate unlawful discrimination, harassment and victimisation and other conduct prohibited by the Act”.

It goes on:

“The protected characteristics consist of nine groups: age, race, gender, disability, religion or belief, sexual orientation, gender reassignment, pregnancy and maternity, marriage and civil partnership.”

If women were to be paid less than men, that would be against the law because gender is one of the protected characteristics; mysteriously, however, this impact assessment does not extend to age. I would really like to see some smart lawyer take a legal challenge against the Government, because there is clear discrimination in the terms of this statutory instrument on the basis of age alone. There is no justifiable reason for this policy.

To compound matters further, the proposal that we are discussing today will increase the pay gap between age groups. The uprating that will result from the regulations means that 24-year-olds could earn £90 less a month than 25-year-olds for exactly the same job, amounting to a difference of more than £1,000 a year. The gap would increase even further within the under-25 age groups, making it even harder for young people to get by. Since the measure was brought in in 2016, 18 to 20-year-olds have seen the age pay gap between themselves and someone on the higher rate go from £1.90 to £2.06; 16 and 17-year-olds have seen it rise from £3.33 to £3.86—that gap between the highest wage and all that they are legally entitled to be paid—and for apprentices, the gap has gone from £3.90 to £4.31. No justification is given in the impact assessment for that state-sponsored age discrimination.

If I were to suggest that Members of Parliament—an MP born in 1973, perhaps, like my hon. Friend the Member for Glasgow South West (Chris Stephens), or an MP born in 1978, like the Minister, or myself, born in 1982—were to be paid different rates depending on age, I cannot imagine any MP in the House signing up to that. Why should young people face the discrimination in law that the Government are proposing today?

[Gillian Keegan]

I am listening carefully. Having started my working life aged 16 as an apprentice, I would not expect to get the same minimum wage at 16 as I would starting in a new job when I was 20, 30 or 40. Surely there is some recognition that experience comes with age, even if it is not always experience in the workplace. I think that perhaps people when they are older might expect to see a differential to reflect their experience.

[Alison Thewliss]

The hon. Lady misses her own point, because the regulations are not called “The National Experience Wage (Amendment) Regulations”. The regulations discriminate by age alone, not by experience, so if the hon. Lady, as a 16-year-old, walked into a job on the same day as somesone who was 25, she would not be legally entitled to the same wage. The 25-year-old would have no more experience in that job, regardless of their experience in life. There might be 20 or 16-year-olds who are far more savvy on the first day in the job than a 25-year-old, or a 45-year-old, or a 65-year-old. We are not measuring experience here.