Living Wage

Debate between Guy Opperman and Chris White

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.

Industrial Policy and Manufacturing

Debate between Guy Opperman and Chris White

Thursday 22nd November 2012 Commons Chamber

[Chris White]

I thank my hon. Friend for his intervention. As someone who worked for MG Rover, I had a great experience of the supply chain and some of the smaller businesses that supported it. They have a great part to play in our economic growth, certainly in terms of new jobs in this sector.

It seems clear from the statements that the Government have already made that they understand and appreciate the important role that manufacturing can play in supporting the UK economy. But I hope that the Minister will see these words turned into action, and I believe that means beginning the process of developing a formal UK industrial strategy for the next 10 years, at the very least. Countries such as Germany and Japan, where industrial policy is at the very heart of government, can perhaps operate without such a formal process. However, I believe that the UK would benefit from it, not only through the consultation, debate and consensus building that would be necessary in the formulation of such a document, but from having a document against which civil servants and politicians can be held accountable through regular reviews.

Parliament should be at the centre of the development of this industrial policy. We need a policy that can last beyond the lifetime of one Government, which means ensuring that we have policies that all parties support or broadly favour, so that we create the policy stability necessary for businesses to invest in the UK.

[Guy Opperman (Hexham) (Con)]

It is a year since we last debated manufacturing, on a Thursday late in November 2011. Does my hon. Friend agree that there is some evidence that actual change has taken place, particularly on local banking? That is now that much easier because of the Financial Services Bill, which we passed on 23 April. It means that the smaller businesses so favoured by my hon. Friend the Member for High Peak (Andrew Bingham) can much more ably be financed by local banks.

[Chris White]

I thank my hon. Friend for his intervention. It is fortuitous, and something I did not realise until he mentioned it, that a similar debate was held this time last year. I hope we have made more progress and that that will continue. One issue on which we have made progress is the business bank concept, about which I know that he spoke in that debate.

Community Banks

Debate between Guy Opperman and Chris White

Tuesday 10th July 2012 Westminster Hall

[Guy Opperman]

I completely agree with my hon. Friend and I entirely applaud the Government’s approach—by way of the Vickers report—to addressing the problems with the larger banks. Everyone can see that there is a fundamental problem with large banks and their failure to lend. The fact is that they are almost operating as a monopoly; the largest six banks run the show completely.

The other end of the telescope and the other end of the problem is the lack of local banking. My hon. Friend talks about a two-tier banking system and I agree that, instead of having a single monolithic and almost monopolistic banking structure in which only the five or six big banks lend money, we need the larger banks—of course—but we also need the smaller banks operating at a local level.

Quite frankly, we have lacked that system in this country. Ever since the 1930s, approximately, the banks and building societies in the UK have become ever larger as some of them have been swallowed up by their neighbours and by their more predatory rivals. Consequently, we have gone from having a large variety of banks and building societies to having fewer and fewer banks and other organisations working in the banking community. Of course, that has the effect of reducing competition, reducing the ability for a new entrant to gain access to the market and reducing the ability of businesses to gain access to credit.

I must stress at the outset of my speech that the present crisis in banking and in bank lending is not in any way the fault of local branch staff. I assure the House that those staff are just as frustrated as I am at their inability to run accounts as they used to in the old days. I come to this particular debate with a background in business and with two years of experience as a constituency MP in Northumberland, where I have repeatedly seen decisions on lending being made by a Hexham bank manager, or another local Northumberland bank manager. Those decisions then become part of the responsibility of the credit risk team whenever there is any difficulty with the account.

If an individual SME has a problem with its account, such as a bad debt or a problem with cash flow, it is almost impossible for it to go back to the same manager and argue the case that it is a viable, proper business going forward. That is because the decision-making process has been taken away from the individual local bank manager in Hexham, Ponteland or wherever. What happens now is that the decision is not even taken in Newcastle or anywhere else in the north-east but by a credit risk team that is many miles away. I have attempted to go to those credit risk teams to make a case, but of course it is almost impossible to do so. That system must change. Again, I make it clear that what I am saying today is not a criticism of local bank staff who are working throughout the country. It is a criticism of the board members in London, who seem to have totally forgotten their fundamental role.

I was interested to see that the Leader of the Opposition has commented on banking in the last few days. Like the Church, we always welcome new converts, given the past record. However, the necessary reform of the banks is being left to this Government, as we bring the banks to heel with the Vickers report, clear up the LIBOR mess and implement a much stronger system than the light-touch regulation that we saw before.

Change will not happen without competition. Yesterday the Leader of the Opposition was extolling the need to create more competition for our banks. However, on 23 April in the Financial Services Bill Committee the Opposition voted to prevent competition in banking. I was present for that debate, which saw the Opposition introduce amendment 28, which would have deleted clause 5 of the Bill, thereby deleting the requirement for enhanced competition. So I must ask the question: how can one be in favour of local banks while stopping competition?

The Leader of the Opposition is also out of touch if he thinks that the answer to this banking crisis is to force banks to close some of their high street branches. That is hardly what the voters in my part of Northumberland are crying out for; that much is certain. Residents in Haydon Bridge and Haltwhistle who are losing their local bank branches will tell the Leader of the Opposition that the problem with the banking sector was casino banking and greed, and not—as we heard from Labour this week—having too many local branches. My constituents want to see local branches providing a local service.

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

I congratulate my hon. Friend on securing this debate. I would like to know his thoughts on how our local communities can hold these banks to account. Although having local community banks is an excellent idea, if we create smaller banks out of RBS how can we ensure that the local communities will have control over those banks’ priorities? In my constituency, industries such as the green energy industry and the video games industry have big potential for growth. How can local communities ensure that local banks are given the mandate to tailor themselves to local business needs?

[Guy Opperman]

The reality is that Hampshire, for example, has done what I am talking about and set up the Hampshire bank, or Hampshire Trust. It is backed by the local chamber of commerce and by local authorities. It is regulated, so it is possible to have a county bank that is regulated, but on a lighter-touch basis—I use that phrase again—than the larger banks such as Barclays or HSBC. Moreover, if we broke up RBS, which I will come on to discuss, the individual shareholders would have a say in a local county bank.

How do we create local banks? First, one must address the barriers to entry, which are considerable. Metro Bank has recently been established in London and the south-east, but only at huge cost and only after overcoming many hurdles. The example of the Hampshire bank shows that county banks can be created. I see no reason why we cannot do the same in Northumberland, or in the wider north-east region, and set up “The Bank of Northumberland” or “The Bank of the North-East”.

However, the truth is that a banking licence is notoriously difficult and costly to obtain. To try to remedy that situation, along with my hon. Friend the Member for Chichester (Mr Tyrie), who is the Chairman of the Treasury Committee, I met the chairman of the Financial Services Authority, Hector Sants, at the beginning of March. My hon. Friend and I sat down and tried to explain the problems to Mr Sants, and I am pleased to say that under this Government the FSA is considering trying to reduce the barriers to entry for smaller local banks.

On 12 March, the FSA’s chief executive wrote to me:

“We are conscious of the balance to be struck between ensuring high standards at the gateway, and the importance of allowing innovation and appropriate levels of access for new firms.”

He added:

“there has been public debate about the potential advantages of new entrants in the area of small, regional banks focused on servicing the SME sector. In such cases we will be proportionate in our approach and would invite all firms with a viable business model and appropriate levels of resources to a pre-application meeting to help guide them through the application process”.

In those circumstances, and with the background of a banking crisis, we need to look at the elephant in the room that is the Royal Bank of Scotland. The Government are understandably impatient to sell the 83%-nationalised bank, but the health of the public finances ultimately depends on the health of the economy, which itself rests on the stability and usefulness of the banks.

The taxpayer bail-out and the subsequent problems of RBS are well documented, and it now seems clear that the chances of the Government selling RBS as it is, and making a profit, or anything like one, are but a dim flicker at the end of a long tunnel. What the Government did with Northern Rock was undoubtedly the best option and the only real one, but RBS is different. I see RBS as an opportunity—as the Americans often say, “Don’t waste a good crisis.” We have a unique opportunity to seize the moment, and to ensure that RBS is managed for the benefit of the taxpayers, who own 83% of it, thereby transforming the banking sector. I suggest that we do not sell RBS as it is, but break it up, decentralise the branch management and use it to form the basis of devolved local community banks—imagine a local bank for every city or county—linked, where possible, with the local authorities and chambers of commerce.