Skills and Growth

Guy Opperman Excerpts

Wednesday 17th June 2015 Commons Chamber

[The Secretary of State for Education (Nicky Morgan)]

This debate provides a great opportunity, in contrast to the doom-mongering of the hon. Member for Stoke-on-Trent Central (Tristram Hunt), to set out the reforms and progress that the Government have made in the area of skills and growth. Every time he speaks, the hon. Gentleman seems to collect people whom he wishes to offend. First, it was nuns; today, he offended anyone working in the potato industry, such as my hon. Friend the Member for North West Leicestershire (Andrew Bridgen), who runs a successful business employing many hundreds of people.

Conducting a root and branch review of 14-to-19 education of the sort the CBI advocated in its report is exactly what we have been doing for the past five years, ensuring that every young person, wherever their talents lie, has the opportunity to succeed in modern Britain. As ever, the hon. Gentleman managed to be a torrent of sound and fury—but little else, unfortunately.

[Guy Opperman (Hexham) (Con)]

Not pithy.

[Nicky Morgan]

He certainly was not pithy.

The skills and qualifications of 14 to 19-year-olds should not be the subject of the hon. Gentleman’s sound and fury. I wait with bated breath for the day when he acknowledges the 2.2 million apprenticeship starts and the fact that more young people than ever are going to university, including those from disadvantaged backgrounds, and that over 70% more pupils are taking GCSEs in the core academic subjects that will help them to get on in life.

School Funding Formula

Guy Opperman Excerpts

Tuesday 10th March 2015 Commons Chamber

[Mr Walker]

I absolutely agree with the Chairman of the Education Committee and join him in that plea to all parties to deliver a fair funding formula, as has been promised.

[Guy Opperman (Hexham) (Con)]

The other point that surely needs addressing is the pupil premium. Although we all support it as a principle and in its effects, is it not a blunt instrument, because it skews an already unfair system? Does that not need reviewing?

--- Later in debate ---

[Guy Opperman (Hexham) (Con)]

As I walk out of Heddon-on-the-Wall St Andrew’s Church of England first school and go down the hill into Newcastle, I lose £1,000 per pupil over the course of 300 yards. That is utterly illogical, and the disparity cannot be continued. I endorse all the comments made by my hon. Friend the Member for Worcester (Mr Walker) and others. On the pupil premium, I make the point that although we all of course support it, it is genuinely skewing an unfair system and giving us a system that is manifestly not acceptable. I pay tribute to all the schools, governors and teachers in my region of Tynedale and Ponteland, who produce outstanding education, despite the great disparity. They helped me to lobby Ministers, not least the Minister for Schools, who came to Hexham and met many of them approximately 18 months ago.

The additional £390 million allocation of minimum funding levels resulted in £12 million-plus going to Northumberland, which is genuinely a lifesaver for our schools. We need a firm commitment from all parties in this House that that level of minimum funding increase will form part of the baseline funding for 2015-16, so that at the very least all schools can then plan for the future.

[Mr Marcus Jones (Nuneaton) (Con)]

I completely agree with my hon. Friend. There is a massive disparity in my area, which is sandwiched between Leicester, Coventry and Birmingham which get hundreds of pounds extra in funding a year per pupil. Does he agree that that needs to change—it is vital that that happens—because my local schools are trying to get staff in a market where those other schools have far higher levels of funding?

[Guy Opperman]

I endorse what my hon. Friend says. He should try coming to the most rural and sparsely populated constituency in England, Hexham, in Northumberland, where he would understand the complex difficulties we face; the situation he describes is exacerbated in spades there.

Although the 7% budget increase that the schools will enjoy on 31 March or 1 April is clearly very helpful, we need to plan and go forward. We have yet to hear from the Labour party, which was in government for 13 years and did nothing about this, but the argument appears to be won, because when we look at the co-signatories of F40, we find that they come from across the House. While strongly urging that we get an increase and that the sparsity factor is addressed, I entirely endorse the motion.

First Aid Techniques: National Curriculum

Guy Opperman Excerpts

Tuesday 10th March 2015 Westminster Hall

[Julie Hilling]

The hon. and learned Gentleman clearly caught sight of my speech before he raised his point. I was about to go on to say that Mandy Hobbs was really lucky, too. Her 14-year-old daughter, Samantha, woke up to hear her father on the phone saying that he thought her mum was dead. Samantha had learnt CPR at her swimming life-saving club, and she says that she went on to autopilot and started chest compressions. When she got too tired to carry on, she taught her father what to do. Mandy survived and now Samantha has become the pin-up girl of the British Heart Foundation. Mandy, dad Nick and Samantha are regular visitors to Parliament, trying to persuade the Government to make first aid compulsory in schools.

[Guy Opperman (Hexham) (Con)]

I congratulate the hon. Lady on securing this important debate and I take the point that she is making as a fundamental premise, but does she agree that there is a role for local community campaigns, such as Heart of Gold and the Stephen Carey fund in Northumberland, which are trying to institute and organise more public access defibrillators around the county of Northumberland so that rural dwellers have that access, which saves lives?

[Julie Hilling]

I absolutely agree with the hon. Gentleman. For me, it starts in schools. If only we could have—I will go on to talk about this more—a generation of life savers coming out of school. We have millions of people in the community who will not have had the benefit of being trained in schools. I applaud his organisations and the organisations in my constituency and across the country that do amazing work to raise money for defibrillators and for training individuals in how to do CPR.

Survival should not be down to luck. There are far too many other examples of people who suffer cardiac arrest and are not saved because the people around them do not know what to do: children such as Ciaran Geddes, who died aged 7; 12-year-old Oliver King; 16-year-old Daniel Young; or 17-year-old Guy Evans. Their mums are campaigning for defibrillators and emergency life-saving skills to be taught in schools.

Oral Answers to Questions

Guy Opperman Excerpts

Monday 19th January 2015 Commons Chamber

[Mr Laws]

I know that the hon. Lady is concerned about the situation. I should be happy for her to raise her concerns with me, and I should be happy to consider them, although, as she will understand, the Department has no formal role. The formal process requires representations to be made to the local authority, and potentially to the local government ombudsman. She will be aware that if the governing body does not like the decision reached by the local authority, it can appeal to the schools adjudicator, which is able to deal not only with issues of process but with issues of substance.

[Guy Opperman (Hexham) (Con)]

The organisation of Hexham high school, which the Minister visited only last year, would be considerably improved by its inclusion in the second-priority school building programme. When will a decision be made about the programme?

[Mr Laws]

I know that my hon. Friend is passionate about this matter, and he has been particularly ingenious in raising it under the current subject heading. I have noted his strong representations on behalf of the school, which we will bear in mind as we make our decisions on the programme over the next few weeks.

Oral Answers to Questions

Guy Opperman Excerpts

Thursday 27th November 2014 Commons Chamber

[Mr Vaizey]

Well, we worked with the cities, so they came up with up their own proposals. I believe that Newcastle has a cloud computing centre, using its super-connected cities programme, and Bristol, too, has a fast-speed internet hub. So it is up to the cities how they choose to use the money. The criteria have come from the cities and they are the ones that have chosen which public buildings they want to put wi-fi in.

[Guy Opperman (Hexham) (Con)]

6. What progress he has made on ensuring that mobile network operators and broadband providers provide adequate coverage in rural areas of Northumberland.

[The Secretary of State for Culture, Media and Sport (Sajid Javid)]

As we have heard, mobile communication is critical to the rural economy. We are therefore working with Ofcom to identify gaps in mobile coverage, and I have consulted on potential measures to tackle patchy coverage. In addition, the Government have allocated £9.5 million to increase superfast broadband coverage in Northumberland to almost 90% by 2016.

[Guy Opperman]

I accept that we are making progress in Northumberland, but my constituents in many parts, such as Kielder, Dalton, Stamfordham, Stocksfield and Byrness, suffer from very poor mobile and broadband reception, or zero coverage. May I ask the Minister to visit soon, to push BT and the other providers and, frankly, kick ‘em up the arse, and generally to push ahead so that we have a campaign whereby there are no no-go areas and no go-slow areas?

[Mr Speaker]

I think “posterior” would be a more parliamentary word.

--- Later in debate ---

[Mrs Grant]

Sport England and UK Sport together do a very good job in supporting not only elite sport, but grass-roots sport.

[Guy Opperman (Hexham) (Con)]

T5. As a cricketer, I echo the sympathies for the wonderful Phil Hughes, whose loss is tragic. I welcome the announcement that Ponteland middle school will have a new artificial grass football pitch funded by the Premier League, the Football Association and Sport England. May I urge the DCMS to carry out an audit of all my constituency so that other pitches may be installed very soon?

[Mrs Grant]

I am delighted that Ponteland community middle school has been successful in its application. Artificial pitches are amazing and increase participation, community involvement and talent development, which is how we will grow the game. I am happy to look, with my hon. Friend, at what scope there might be for further projects.

--- Later in debate ---

[Jo Swinson]

The hon. Gentleman is right to raise the issue. After-school and breakfast clubs can be hugely important in enabling parents to manage their responsibilities. It is also important that schools have the ability to make choices about the services they offer. We have introduced legislation to make it easier and reduce the bureaucracy for schools deciding that that is indeed what they want to do. That should help to ensure there is greater provision of these important services.

[Guy Opperman (Hexham) (Con)]

I have been to Diandjims nursery at Prudhoe in Northumberland and seen the transformational effect of the free child care provision of 15 hours per week for two-year-olds. The lives of parents are transformed, because they can go back to work or get back into employment following the birth of their child.

[Jo Swinson]

My hon. Friend raises an important example of the policy in action and working to deliver for hard-working families in his constituency. There are many such examples up and down the country. The policy is incredibly important for making sure that people do not have to choose not to work for economic reasons, which is why we are committed to taking it further.

Small Business, Enterprise and Employment Bill

Guy Opperman Excerpts

Wednesday 19th November 2014 Commons Chamber

[Ian Murray]

It is most prevalent in the construction sector, but it affects other low-paid sectors as well. This goes back to the point I made in response to one of my hon. Friend’s previous interventions about good businesses being hit by the playing field not being level because of people undercutting wages and undermining their responsibilities to society in terms of paying the appropriate tax that they should be paying on the wages that they are generating.

So as not to be too uncharitable to the Minister, let me say that we welcome clause 145, which introduces an exclusivity ban into zero-hour contracts. However, as with yesterday’s pubs debate, the Government have been dragged kicking and screaming into doing anything at all about this issue. They have fallen far short of introducing measures that really tackle the exploitative use of these contracts. They are doing nothing to change the practices of companies that base their entire work force management strategy on zero-hours contracts. As my right hon. Friend the Leader of the Opposition said last week, zero-hours contracts have

“left too many people not knowing how they will make ends meet from one week to the next and unable to plan for the future. And this government won’t do anything to stop it. But we will.”

Our amendments attempt to build on the fact that the Government have tabled an amendment to the law, albeit a minor one, to stop exclusivity by suggesting that they take that one step further. Amendment 9 would require the Secretary of State to introduce regulations so that workers on zero-hours contracts can enforce their rights. It is completely ludicrous that we have been left in a situation where the Government have introduced legislation to ban exclusivity clauses in zero-hour contracts but have not put in any enforcement action so as to be able to remedy the problem. The Minister for Business and Enterprise was pressed repeatedly on this in Committee but could offer only the option of enforcement through the usual employment tribunal channel. Perhaps he should spend less time apologising to the Prime Minister and more time apologising to the millions of workers he is letting down through this clause.

[Guy Opperman (Hexham) (Con)]

Is that the best you can do?

[Ian Murray]

I haven’t finished yet—just you wait!

Let me go through why not being able to enforce these rights is a real problem. If, as the Minister suggested, people go through the normal employment tribunal channel, there would be a two-year qualification period for unfair dismissal. They would then have to go through compulsory early conciliation at ACAS. If that failed, they would have to pay a disproportionately high fee to enter the employment tribunal system. If they were found to have been wronged in the workplace, they could receive a compensatory award, but in up to 50% of cases those awards are no longer paid, and the chances of them getting their job back, or any job, would be much diminished.

Living Wage

Guy Opperman Excerpts

Thursday 6th November 2014 Commons Chamber

[Chris White (Warwick and Leamington) (Con)]

I beg to move,

That this House has considered promotion of the living wage.

I am sure that the House is grateful to you, Madam Deputy Speaker, for your clarification with regard to the noises outside the Chamber.

The second debate this afternoon is on a very important, but more domestic topic, on which I am pleased to say that there is a great deal of cross-party support and consensus. Despite the fact that not as many Members are in the Chamber as I would have wished, I am sure that they are working hard in their constituencies, or particularly hard in one constituency.

We can all agree on the importance of a fair day’s pay for a fair day’s work, and there is a sincere commitment on both sides of the House to ensure that hard-working people are rewarded for their efforts. I look forward to contributions to the debate from both sides of the House.

Today’s debate is also timely, taking place as it does during living wage week. As Members are no doubt aware, earlier this week the UK living wage was raised to £7.85, and the London living wage to £9.15. The new figures represent an increase of 2.6% on the 2013 rate and will improve the take-home pay of some 35,000 people, who are among the lowest paid workers in the country.

Since 2013, more than 60,000 people have been given a pay rise through the living wage. This year, the number of FTSE 100 companies that have signed up to the living wage has increased significantly from four to 18. I lay down the challenge as to which will be the next.

[Guy Opperman (Hexham) (Con)]

I congratulate my hon. Friend most wholeheartedly on securing such an important debate in living wage week and welcome the work that he is doing, especially on behalf of the all-party group on poverty. Does he agree that those companies that adopt the living wage are bound to see not only a dramatic improvement in their staff retention and a reduction in their turnover but an increase in the productivity of their staff? That has been demonstrated by Costco in America, and Barclays, and KPMG in this country?

[Chris White]

I agree wholeheartedly with some of my hon. Friend’s points, and I thank him for being such a strong advocate of the living wage.

--- Later in debate ---

[Chris White]

The hon. Gentleman makes an important point. How we improve the take-up of the living wage will address some of his concerns. I hope that some of my right hon. and hon. Friends will show how this can be a benefit not just to employees but to society in general.

Despite the comments made so far, there is a positive trend in the number of employees receiving the living wage. Research from Queen Mary university of London has shown that the total number has grown significantly during the last decade. The benefits of paying staff the living wage have been widely documented. Research shows that those working in organisations that are signed up to the living wage have better psychological well-being than those working for non-living wage employers. This research also found that two thirds of employees on the living wage reported improvements in their work, family life or finances.

Businesses have reported positive effects. London Economics found that 80% of employers noticed an increase in productivity. Further research revealed that employers reported improvements in staff retention and well-being. The Living Wage Foundation research found that 75% of employees reported increases in their work quality as a result of taking up the living wage. Also, half of employees felt that the living wage had made them more willing to implement changes in their working practices.

As many in the House will be aware, the Living Wage campaign began 15 years ago as Citizens UK. It felt there was a need to respond to the levels of deprivation being experienced by people despite the fact that they were in full-time work. Although record numbers of people are in work, the Low Pay Commission found that the majority of those in poverty had a job.

In 2010-11, the Living Wage Foundation was established to develop a system through which to recognise those employers who were paying their staff a living wage.

Accreditation is awarded to companies that pay the living wage to all directly employed staff and those regularly working on their premises.

In the private sector, provision of the living wage has become a key part of many organisations’ corporate social responsibility agendas and—dare I say it?—the social value agenda. I refer hon. Members to my private Member’s Bill—now the Public Services (Social Value) Act 2012—which Members across the House supported, and I pay tribute to the work it has achieved. In Monday’s edition of The Guardian—that shows how consensual I am being—an article by Matthew Jackson specifically referred to the potential use of that Act in encouraging the uptake of the living wage:

“The living wage should be embedded into the way councils commission and procure goods and services. Councils can link procurement to strategic priorities to address low pay. They can have contracts that state potential suppliers must pay the living wage and they can use the Social Value Act…to encourage and cajole suppliers.”

That is an idea well worth pursuing.

This week it was announced that more than 1,000 companies now pay their staff the living wage—another milestone—which is more than double the number at the same time last year. It is an impressive result, and one that I hope marks a tipping point and the beginning of a cultural change.

I am pleased to note that the living wage campaign has consistently enjoyed cross-party support. This Government believe that work is the surest way out of poverty, and I share that view, as does the Living Wage Foundation. Government Departments have signed up to pay the living wage and Whitehall is now leading the way. The Department for Work and Pensions and HM Treasury are two of the Departments doing that. However, there is still some discrepancy between the pay received by contract staff, particularly cleaners, within Government Departments. I would like to take this opportunity to call on all Departments to follow the example of those that pay their contract staff the London living wage.

[Guy Opperman]

At the meeting of the all-party group on poverty this morning, along with the Living Wage Foundation and Citizens UK, I was lucky enough to meet a young man called Nana-Ben, one of the cleaners at the Department for Transport. He is not paid the living wage, and he spoke very eloquently of the problems he suffers as a result. The fair point to be made, however, is that he is one of 45 cleaners employed by Amy Cleaning, a large corporation that provides services to the Government. Do not those companies, as well as Government Departments, need to look at what they are doing so that we can get the change we all wish to see?

[Chris White]

I think that both parties have to work very closely on that. I believe that when contracts are being tendered there is certainly an opportunity that we should not miss. It is not right for either party to look for the lowest cost contract by excluding the living wage from the discussion.

--- Later in debate ---

[Guy Opperman (Hexham) (Con)]

I wholeheartedly congratulate my hon. Friend the Member for Warwick and Leamington (Chris White) on securing the debate and I thank the Backbench Business Committee. Some would say that Parliament does not often have important debates, but with the debate on Iran and now this debate on the living wage, I cannot think of a more important day to be in Parliament. I am delighted to be here to support my hon. Friend.

I was delighted, too, to have been part of a briefing that took place with the all-party group on poverty this morning with the good people from the Living Wage Foundation and Citizens UK, who came to the House of Commons and met several hon. Members, from many different political parties, to brief them on the living wage and to hear some of their experiences. I thank Emma Kosmin and Stefan Baskerville for coming in, along with the Rev. Angus Ritchie, Mike Kelly and Nana-Ben, who is the cleaner I mentioned earlier from the Department for Transport.

This is not just a debate about the living wage but a debate about tax thresholds and tax credits, but one must start with the wonderful news that the living wage has risen again this week. I was pleased to see the Mayor of London going to Kaffeine, a coffee shop in Great Titchfield street, to celebrate and support it. The Evening Standard pictured him with a large cake, which I am not sure is quite the message we are trying to get across, but the point is that he has been an enthusiastic and vocal supporter of the living wage, and quite right too.

I am sure the Minister will make the point that it is fantastic that it is this Government—acting as a coalition, to be perfectly fair—who have raised the tax threshold, which makes a massive difference to the pennies and pounds in the pockets of people earning a living wage or a minimum wage. That is the first direct impact. Clearly, there is a legitimate and correct debate about tax credits and how one takes them forward. I will leave others to discuss that in more detail, although I did set out my views on that in fairly lengthy detail in an article for the New Statesman in July 2013.

[Stephen Timms (East Ham) (Lab)]

I enjoyed reading that article, in which I think the hon. Gentleman described himself as an old-fashioned left winger. I think he would acknowledge that the advantages of an increase in the tax thresholds he describes are significantly undermined for people on the lowest incomes by the fact that tax credits are withdrawn to such a large extent.

[Guy Opperman]

I am delighted that the right hon. Gentleman, who sits on the Opposition Front Bench, is taking advice and instruction from me, a humble Back Bencher in this House since only 2010, but I take his point. The Government clearly need to address how taxing the individual is dealt with to avoid the problems he identifies so eloquently. I do not think it is quite as simple as he sets out. I accept and endorse the approach of the Chancellor: I think the fundamental is the tax threshold and then how we deal with tax credits. The harsh reality, as the right hon. Gentleman will know from the article he read, is that we have the bizarre situation where the Government step in and provide tax credits to the tune of approximately £4 billion for a variety of individuals when they should be encouraging an increase in wages and taking away tax. I will, however, leave that debate for another day.

We can provide local leadership. I am proud to wear the badge of the Living Wage Foundation, and I am a living wage employer in the House of Commons. I would like the foundation to accredit MPs who pay the living wage in order to incentivise us not only to talk the talk but to walk the walk. In addition, particularly in living wage week, I would urge all Members, if they have not done so already, to visit the living wage employers in their constituencies. I have met several of mine.

My hon. Friend the Member for Aberconwy (Guto Bebb) asked about small employers, particularly in rural locations, but, as is well known, the Federation of Small Businesses supports payment of the living wage on a voluntary basis. I can give some local examples. Aquila Housing, in Gateshead, and several churches in my constituency have shown the benefits, and Mike Joslin, an employer in the north-east and across the country, would eloquently set out the benefit it has brought to his relatively small business. However, my best example is the fine coffee shop Tea and Tipple, in Corbridge, which has barely three or four members of staff. When the snows fell—they fall through to May in Northumberland—his staff fought through the snow to get to work and open the coffee shop. There was clearly a sense of camaraderie, loyalty and commitment to the business that he might not have seen had he not been a living wage employer. He went the extra mile for his staff, and they went the extra mile for him.

Of course, we should be pushing the large employers too. Today, I met Mike Kelly of KPMG, and the human resources directors of companies such as Barclays. We need to ask the large employers in our cities and regions why they are not living wage employers. When KPMG did the transfer in 2005-06, it found that approximately 700 members of staff were not being paid the living wage, but when it compared the turnover of non-living wage staff with that of living wage staff, it found that the turnover dropped from 47% to 24% in one year.

In my New Statesman article, I cited the example of Costco. Craig Jelinek, its chief executive, who pays the living wage in America, said:

“We know it’s a lot more profitable in the long term to minimise employee turnover and maximise employee productivity, commitment and loyalty.”

I think he is right. Last year, when I spoke to Dominic Johnson, Barclays’ HR director, he was clear that it made sense for business.

When I go to my local Barclays in Hexham or any other branch, I am told that when cleaning staff are paid the living wage—traditionally it is the cleaning staff who slip through the net—capitalism takes over and, market forces being what they are, everyone wants to be a cleaner for Barclays, staff turnover drops through the floor, everyone feels much more valued and the offices are cleaned faster. Bizarrely, therefore, paying people more ends up costing the business less, and the quality of the product—the cleanliness of the offices—is improved.

There are, then, examples from big businesses and small businesses, and I am pleased that the public sector and the various Government Departments are leading the way. Some are quick to criticise Departments for not moving quickly enough, but it is extraordinarily difficult for some—the NHS, for example, has a vast array of subcontractors and private finance initiative contracts—to change.

But if I can move on, in the limited time we have, to allow others to speak—

[Madam Deputy Speaker (Dame Dawn Primarolo)]

Order. Perhaps I can give the hon. Gentleman some guidance about how limited the time is. We have to conclude the debate so that we can hear the wind-ups within 50 minutes. I currently have seven other speakers, so I am going to ask people to be disciplined, so that nobody is squeezed out. The hon. Gentleman might bear that in mind, given that he has already been speaking for 10 minutes.

[Guy Opperman]

I will take barely a minute more, Madam Deputy Speaker.

The living wage is a campaign that unites all faiths. It unites Christians, Muslims, Jews and those of other faiths, and quite rightly so. When this was first looked at, it was decided that it was an idea whose time had come. I cannot endorse that more strongly.

[Several hon. Members]

rose—

Oral Answers to Questions

Guy Opperman Excerpts

Monday 27th October 2014 Commons Chamber

[Mr Speaker]

I am sure we are all glad that the health and nutrition of the hon. Member for Cambridge (Dr Huppert) are assured beyond doubt.

[Guy Opperman (Hexham) (Con)]

Wylam first school is a big supporter of the free school meals programme. It has purchased the specific equipment needed, but has still not received the funding it is entitled to, given the guidance from the Department for Education. I have a meeting on this matter fairly soon with the Minister, but will he expedite it with his civil servants to ensure a resolution in weeks, not months?

[Mr Laws]

I shall certainly follow up that issue on behalf of my hon. Friend. I am pleased to tell him that earlier this month the Department announced it was making available almost £25 million in additional capital to schools to support this policy. This money has come from an underspend in the existing free school meals budget.

National Minimum Wage

Guy Opperman Excerpts

Wednesday 15th October 2014 Commons Chamber

[Mr Umunna]

I do not know to whom the hon. Lady refers, but in my experience, my Labour colleagues have always sought to ensure that those who work for them are paid a decent wage. I am sure that she, like others, might occasionally, as I do in my constituency office, have sixth-formers who are work experience students. Their situation is different from those whom hon. Members employ, but if hon. Members employ somebody to work for them, they should be paid a decent wage.

I spoke of the evolution of the national minimum wage and what Labour wants to do. With that in mind, we asked the former deputy chair of KPMG, Alan Buckle, to consult business, trade unions and others on how we can strengthen the minimum wage and restore its value. In so doing, Mr Buckle consulted many companies extensively. There is a growing body of opinion that the value of the minimum wage should rise. Sir Ian Cheshire, chief executive of Kingfisher, Jeremy Bennett, chief executive officer for Europe for Nomura, and Steve Marshall, the executive chairman of Balfour Beatty, are among those who are calling, as the economy recovers, for the minimum wage to increase faster than it has in the recent past. They say that that will benefit businesses and improve the public finances—the fall in the real value of the minimum wage since 2010 now costs the Exchequer £270 million a year in additional benefit and tax credit payments, a point that my hon. Friend the Member for Leeds West (Rachel Reeves), the shadow Work and Pensions Secretary, will build on later.

[Guy Opperman (Hexham) (Con)]

Does the hon. Gentleman accept that the minimum wage has risen, both by reason of the Government’s increase and the increase in the tax threshold, whereby the tax take from the minimum wage earner has decreased, and that the Government’s projections show that the minimum wage will rise to £8.06 by 2020?

[Mr Umunna]

I will address precisely all three points the hon. Gentleman makes, which I have read and heard the Minister make in the media, but the issue is how we evolve what we have to tackle the fact that, despite the minimum wage, more than 5 million people are in low pay. When we introduced the minimum wage and when, as I have said, the hon. Gentleman’s Conservative colleagues opposed its introduction, people were earning as little as £1 an hour in some parts of the economy. We helped to do away with extreme low pay—[Interruption.] I will come to tax if the hon. Gentleman is patient. We now want to move things to address the bigger, broader issue of the large body of people in our country who are in low pay.

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[Mr Umunna]

My right hon. Friend is absolutely right. I could not agree more with him.

My second point is that, up to now, the minimum wage has been set with a view to its short-term impact over the coming year. The Low Pay Commission is asked to describe the labour market as it is when it sets the rate, six months before the rate comes into force. It sets the context and gives the rate, but it does not give any guidance on how a higher level can be reached. Therefore, a Labour Government will set a target to increase the minimum wage from its current level of 54% of median earnings to 58% of median earnings by 2020, to be implemented by the Low Pay Commission during the next Parliament.

Forecasts show that that will take the minimum wage from £6.50 this year to £8.00 in October 2019—I can see the hon. Member for Hexham (Guy Opperman) looking up at me, but I will come to his point on the forecasts of £8.06. That long-term target will give businesses time to plan and to adapt their business models to boost productivity to support the higher level. The international evidence shows that countries can support minimum wages with such a measure, which could give us a similar level to that in Australia and other EU countries.

[Guy Opperman]

Will the hon. Gentleman give way?

[Mr Umunna]

I will give way to the hon. Gentleman after I have addressed his point, which, as I have said, has been raised in the media by the Minister. I read in The Sun earlier this month some nonsense from him. He suggested that the minimum wage was on course to be more than £8 by 2020 in any event, as the hon. Member for Hexham said, and therefore that Labour’s commitment to get the minimum wage to £8 by the end of the next Parliament would mean cutting it. That is desperate stuff. Let me be clear that, under the Labour’s plans, there would be nothing to stop the Low Pay Commission from setting the rate beyond £8. In any event, The Sun pointed out that the Treasury estimates on which the story was based relied on a significant recovery of earnings growth. Not many subscribe to those estimates. My point is that Labour Members are not prepared to sit on our hands and just hope for that earnings growth to come about. We are determined to do what we can to ensure it happens by setting that target.

[Guy Opperman]

I took good note of what the hon. Gentleman said, and if I understood him correctly, he said his plan is predicated upon raising median earnings from 54% to 58%. Surely that is only possible by having a strong economy, for which, of course, he would need a long-term economic plan. Surely that means he agrees with us.

[Mr Umunna]

I think the hon. Gentleman will probably have to wait for the reshuffle. [Interruption.] He gets the prize for mentioning the long-term economic sham, which is his party’s plan. I do not disagree, however, with the point he—[Interruption.] The hon. Gentleman keeps shouting at me. If he will let me reply, I will engage with his point. Is the national minimum wage on its own a panacea for ensuring that people can earn a wage they can live off and have security? No, it is not a panacea, but it is a very important part of the equation. Of course a strong economy is important in this respect, however. I would not disagree with him about that. Anyway, he has got in a reference to the long-term economic plan that he wanted to mention, and I am sure the Whip present, the hon. Member for Croydon Central (Gavin Barwell), will have taken note of that.

--- Later in debate ---

[Matthew Hancock]

I will give the hon. Gentleman a couple of examples. We have increased the budget for enforcement by 15%, while the Small Business, Enterprise and Employment Bill, which I am leading through the House, backs up those resources with tougher penalties for those who break the law. While we are at it, we are also tackling the scourge of zero-hours contracts—something Labour failed to do after 13 years in office.

If anybody has ever queried the idea that the plight of the low-paid is linked to the health of the economy, all they have to do is study what happened as a consequence of the great recession. When the economy shrank after 2008, the incomes of the lowest-paid took a hit, through jobs lost, hours cut and wages frozen, and our nation’s finances shrank by 6%, which inevitably had a profound impact on people’s incomes—after all, national income is merely the aggregate of individuals’ incomes. The need to turn that around is why our long-term economic plan is so vital.

The evidence shows that the plan is working. Record numbers of jobs have not been created by accident, but because the economy is growing, but we are keenly aware of the risks that remain and the costs that would be paid, especially by the low-paid, if we abandoned the plan. Those who truly support the minimum wage also support the plan to tackle the deficit and repair the health of the economy, and that is why Government Members are the true supporters of the national minimum wage.

[Guy Opperman]

Is not the most crucial point, as well as raising the minimum wage, the need to address and examine the issue of tax? This coalition Government have raised the minimum threshold and actually given people on the minimum wage more money in their pockets. Will he set out in detail the effect it will have when we elect a Conservative Government and introduce a £12,500 tax threshold?

[Matthew Hancock]

Of course, it is post-tax income that matters to families. Having raised the threshold to £10,500, we are proposing to raise it to £12,500, meaning that no one working full time on the national minimum wage would pay any income tax at all. That is the sort of action we can get only if we have the grit to deal with public spending and leave more money in people’s pockets, thereby supporting the low-paid.

True supporters of the minimum wage also know that it is a partnership with business.

Oral Answers to Questions

Guy Opperman Excerpts

Monday 21st July 2014 Commons Chamber

[Mr Laws]

We certainly need to learn the lessons not just for Birmingham but for the wider school system of the events that have been reported on over the past few weeks. I should say to the hon. Lady that the Department expects to publish Peter Clarke’s report tomorrow and, with your permission, Mr Speaker, the Secretary of State intends to make a statement to the House on how we intend to respond both to the Clarke report and to Ian Kershaw’s report.

[Guy Opperman (Hexham) (Con)]

A school funding revolution is taking place in Northumberland as the fairer funding consultation will lead to an increase in April 2015 of up to 7.2%. That is also a revolution for our governors, who, under the previous Government, were often consulted but always ignored. Will the Minister take this forward and ensure that we have fairer funding for all?

[Mr Laws]

As my hon. Friend ingeniously points out, the funding reforms we are making will certainly help governors and teachers in schools. As a result of his campaigning and that of many other hon. Members we are introducing the fairer funding system next year. When we consulted on this, Northumberland was initially going to benefit to the tune of £10.6 million. I can say that the final settlement is that Northumberland will receive £12 million more to ensure that it is funded fairly in the future.