National Minimum Wage

Gordon Birtwistle Excerpts

Wednesday 15th January 2014 Commons Chamber

[Gordon Birtwistle (Burnley) (LD)]

The Opposition motion mentions that the Liberal Democrats were all against the minimum wage. I do not think that many current Liberal Democrat Members were here 14, 15 or 16 years ago. As a Liberal Democrat, I was always in favour of the minimum wage, and the engineering company that I owned always paid well over the minimum wage. If companies want really skilled people to work for them, they find that the minimum wage is far below what skilled workers are paid today.

I was a little bit offended by the attack on my right hon. Friend the Secretary of State for Business, Innovation and Skills by the hon. Member for Leeds West (Rachel Reeves). She should apologise for the fact that she did not understand the reasons why he was not in the House at the time. I accept that she is new and probably inexperienced, but hon. Members need to know the reasons why someone did something before attacking them in the House.

As has been said many times by the Secretary of State, we went through an appalling crash. There is no getting away from the fact that the Labour party and the bankers drove the country virtually into bankruptcy, and we have had to do something about it. We have managed to maintain employment. As has been said, 1.5 million people are now working who were not expected to work. The Opposition’s hope for a triple-dip recession has not happened. We have managed to drag the economy round and things are moving on, but these things need to be explained.

What can the Government do about the minimum wage? I agree that the Low Pay Commission should look at the minimum wage. I believe that it should be given the right and the power to decide what the minimum wage is, and it is quite right, as the Secretary of State said, that we should not have political interference in things of that nature.

What have the Government done to try to mitigate what we have got? By the fact that the Government have been doing what they have with the economy, we have managed to keep interest rates really low. Let us imagine what would have happened if we had gone along with the Labour party’s proposals on the economy. What would interest rates be now? We have mitigated the effects of a lot of the low salaries by keeping interest rates and mortgage rates down to a very low level. If we look across the rest of Europe, we see interest rates in Greece and similar places that have climbed to as much as 20%. Let us imagine what would have happened in this country if we had allowed that to happen. We have mitigated those effects.

All right, the country has not been able to increase the national minimum wage, and I for one would like that to happen. As the Government’s apprenticeship ambassador, I would certainly like the minimum wage for apprentices to increase, because we should be investing in young people and delivering jobs of the future, and we are now doing so. If I had the authority to speak to the Low Pay Commission, I would ask it to look at that issue.

[Katy Clark]

The hon. Gentleman’s colleagues who sit alongside him like to say that we are all in this together, but he will know that those with the highest earnings, such as the chief executives, are doing very well and their wealth is increasing, and the profits of many companies have risen considerably. Should not those factors be taken into account along with the cost of living crisis when looking at the level of the national minimum wage?

[Gordon Birtwistle]

The very profitable companies, such as the big engineering companies and the major multinationals, invariably pay well over the minimum wage. Many minimum wage payments occur, for example, in the care industry and those industries where low pay is accepted. I agree that if a company is profitable and doing well, it should recognise that its employees are creating not only wealth for the chief executive but wealth and security for themselves and for the country. I agree that companies should recognise what employees do, and the vast majority that do so pay a lot more than the national minimum wage.

[Mr MacNeil]

The hon. Gentleman is actually referring to the productivity gains that have been made. Studies in the United States of America show that the productivity gains have gone to the top 1%. The federal wage in the United States is about $7.25. Had that kept pace with the minimum wage in the 1960s and had the productivity gains been distributed at that level, the federal wage would have been treble the present rate. It is a fair bet that the same would be happening in other western countries, this one included.

--- Later in debate ---

[Gordon Birtwistle]

I am not conversant with what the hon. Gentleman says. I do not study the wage rates of the federal states of America. I have enough to do looking at rates in the UK. But we have kept inflation low and we have mitigated the effect of that on the minimum wage, and we have also managed to create extra jobs and wealth. It is interesting that the motion says that the Opposition agree with making work pay. That is the first time since I became a Member in this House that the Opposition have agreed with making work pay. Hallelujah! They have always had a go at Government Members for promoting work to create wealth for families instead of paying out in benefits. I am over the moon about those three words. If they were in the motion, I would vote for it; unfortunately, they are not.

The Opposition do not have the confidence to include in the motion what they believe the minimum wage should be. I understand that what they suggest runs for only 12 months. What will happen after 12 months? Will everyone go back to what they had before, or will people lose their jobs? It is a half-baked motion. [Interruption.] It is part of the non-economic plan. There is no long-term plan—or a short-term plan. There is no plan at all. The majority of the statements in the motion have been covered in the amendment, which is a far more sensible approach. I urge hon. Members to support the amendment.