National Minimum Wage

Ian Murray Excerpts

Wednesday 15th January 2014 Commons Chamber

[Ian Murray (Edinburgh South) (Lab)]

The small number of Members on the Government Benches at the tail-end of this debate highlights their commitment to the national minimum wage, and I have to say I was slightly disappointed by the Business Secretary’s response to this debate. He said he did not want a tribal debate, and then went on to give a very tribal response to the shadow Secretary of State. He also said he was delighted to have laid regulations today to increase the amount in fines that would be payable by employers if they did not abide by the national minimum wage legislation. I do wonder with my cynical nature why those regulations were laid only today yet the Prime Minister announced this policy back in November. Perhaps the Opposition’s calling for this debate has oiled the wheels.

It was unkind of the Business Secretary to say that the previous Labour Government had only one or two successes, the national minimum wage being one. Several others were shouted at him across the Dispatch Box and he responded by saying perhaps there were those things as well. However, the one thing that the Business Secretary has managed to do—his one great success and what his legacy will be—is to destroy completely the Liberal Democrats party.

I would like to acknowledge and put on record that we were perhaps slightly unkind to the Business Secretary, not realising the circumstances behind his not voting in favour of the national minimum wage, and we apologise if we got that wrong. However, that does not take away from the fact that the Liberal Democrats were against the national minimum wage when they were campaigning in the run-up to the 1997 election. They supported it in the Chamber on Second and Third Reading of the Bill, but that simply shows that they flip-flopped between what they stated in their manifesto and what they did in the House. I am sure that we have seen that before. Also, in the House of Lords they strengthened the regulations on the requirements for the Government to take enforcement action. I was disappointed by the Secretary of State’s response to this debate.

When moving the Second Reading of the National Minimum Wage Bill in December 1997, the then President of the Board of Trade, my right hon. Friend the Member for Derby South (Margaret Beckett), said that the national minimum wage was

“a clear example of how a Labour Government can and will make a real difference to the lives of people across Britain, contributing to fairness and prosperity for the many, not the few.”—[Official Report, 16 December 1997; Vol. 303, c. 173.]

How relevant that statement is today.

Fifteen years have passed, and the national minimum wage is now an economic and political fact of life for us all. It is undoubtedly one of Labour’s proudest achievements, and I wonder whether the present Prime Minister now regrets campaigning against it in the mid-1990s. The then Opposition castigated the policy as a burden on business, arguing that increasing wages at the bottom would cost more than 1 million jobs. It did nothing of the sort. We should celebrate the fact that it contributed to the ending of poverty pay and boosted living standards in this country. That was confirmed by the Low Pay Commission in 2013, when it stated that

“the research had…found few adverse effects on aggregate employment;…individual employment or unemployment probabilities; or regional employment or unemployment differences.”

The days when an employer could legally pay someone as little as £1 were brought to an end despite the vehement opposition of the Conservatives.

It was not only the Conservatives who were against the introduction of the national minimum wage. I should like to draw the attention of the House to the record of the First Minister for Scotland. When he was in this House, he abstained on Second Reading of the National Minimum Wage Bill, and the Scottish National party as a whole did not vote on Third Reading.

[Dr Whiteford]

Will the hon. Gentleman give way?

[Ian Murray]

I am afraid I do not have time to give way, although I see that when the nationalists are provoked, they tend to respond.

I want to comment on some of the contributions from both sides of the House to today’s debate. My right hon. Friend the Member for Dulwich and West Norwood (Dame Tessa Jowell) was right to say that the existence of the national minimum wage is a statement about the kind of country we are. She was also 100% right to highlight the real-life impact of low pay on individuals and families, and particularly on women with child care responsibilities, who are disproportionately affected by employers who do not abide by national minimum wage legislation.

I was quite taken by the remarks of the hon. Member for Harlow (Robert Halfon). He was right to be contrite, and to apologise for his party’s previous stance on the national minimum wage. Unfortunately, however, as recently as yesterday, the hon. Member for Esher and Walton (Mr Raab) wrote in the Evening Standard that any increase in the national minimum wage would be a

“massive jobs tax on business”.

He also described it as “oversold”, and said that this

“policy cross-dressing is more likely to confuse than impress voters”.

Perhaps the hon. Member for Harlow is a lone voice on the Conservative Benches when it comes to defending the national minimum wage in the trenches. That would be a shame.

My hon. Friend the Member for Vale of Clwyd (Chris Ruane) said that the very low-paid could not even comprehend the pay packets of the most wealthy in this country. He summed up the debate well when he said that the minimum wage was for the many and not for the few. He also reminded us that the National Minimum Wage Bill Committee sat for an unprecedented 70 hours. Anyone here who has served on Bill Committees over the past four years will realise that to do so for 70 hours involves quite an undertaking. That just shows the then Government’s commitment to getting the legislation through.

I am always delighted to hear the hon. Member for Burnley (Gordon Birtwistle) speak in the Chamber, although I never agree with a word that he says. Given that he is a Liberal Democrat, I thought he might have been a little more contrite on this subject. Let us give credit where it is due, however. He did say that he had always supported the national minimum wage and always paid it. If any of the hon. Gentleman’s employees or former employees want to get in touch to dispel that rumour, we would be willing to hear from them.

My hon. Friend the Member for Glasgow North East (Mr Bain) reminded the House of the statistic that the UK has the fifth worst levels of poverty pay in the OECD. We should be doing something about that. He also mentioned the impact of low pay on the welfare budget, and the fact that since 2010 the national minimum wage has fallen behind to the tune of 50p an hour.

The hon. Member for Elmet and Rothwell (Alec Shelbrooke), always an entertaining speaker in this House, talked about how increasing wages for the lowest paid was false and fake. I do not think the pay of the poorest in this society is false and fake, but I did enjoy his restatement of the Tories’ trickle-down policy of economics in this country. My hon. Friend the Member for Derby North (Chris Williamson) talked passionately about the need for effective enforcement and rightly said that it would take political direction to bring in the living wage. The Business Secretary did say that the Low Pay Commission should be free of political interference, but bringing in the national minimum wage and, indeed, the living wage is a political direction, and we should all be striving for that.

My hon. Friend the Member for Birmingham, Selly Oak (Steve McCabe) was one of the hon. Members who stayed in this House all night trying to get the national minimum wage legislation through. Let us not underestimate the former right hon. and hon. Members, and those who still sit in this House, who made such effort to get this legislation through, despite the vehement opposition of many on the Opposition Benches.

My hon. Friend the Member for Corby (Andy Sawford) has done some wonderful work in his constituency since he was elected in that wonderful by-election victory, and he gave numerous examples of where workers are paid less than the national minimum wage because of unlawful deductions. He mentioned the increasing problem of the personal accident insurance that is being taken off employees; it is costing employers pennies but they are taking pounds from employees. We have to make sure that there is enforcement on such issues.

My hon. Friend the Member for North Tyneside (Mrs Glindon) is a passionate advocate for the living wage and rightly gave credit to the councils that are paying it. My local council in Edinburgh is paying above the living wage and has done since 2011, and we should encourage more councils and employers to do more. When I am at this Dispatch Box I always find that my hon. Friend the Member for Hayes and Harlington (John McDonnell) speaks last, or second last, and is curtailed in his contributions. I would like to hear an awful lot more of him speaking in this Chamber, because he deserves significant congratulations on the campaign he has run against national minimum wage exploitation; we heard some of the issues relating to the shipping industry from him.

Last, but certainly not least, my hon. Friend the Member for Blaydon (Mr Anderson) talked about why enforcement fines should go back into the enforcement industry, to make sure that we can enforce the system better and that exploitation is rooted out.

We have had a robust debate on the national minimum wage, in which I have been struck by the Government’s restatement of their policies. Indeed, they have re-announced their policy on naming and shaming more times than they have actually used it, which is surprising. We need more action from the Government on these issues, rather than the restating of policies. When the Prime Minister, no less, announced the increase in fines back in November, I am sure that the Government had no intention of rushing them through—until the Opposition called this debate. But that is not new in this House, and this Opposition will continue to press the Government to get results.

Labour will also bring in Make Work Pay contracts to encourage people to pay the living wage, and we have instigated a review led by Alan Buckle, the former deputy chairman of KPMG. He will look in detail at how to restore the value of the minimum wage; how to ensure that sectors that can afford to pay more do so; and how we can promote better the living wage. In November, the Leader of the Opposition also outlined how a future Labour Government will provide tax incentives for employers that sign up to pay the living wage—employers, employees, trade unions, the Government and the Treasury all working together to share the benefits of lifting pay for the lowest paid in this country. Those benefits can be shared for all; I think that that is the right way to go.

Labour created the national minimum wage, despite strong opposition, and it is Labour that will strengthen it for all the low-paid people around our country, moving together towards the shared goal of making work pay for all. It is Labour that will take proper sanctions against those who do not pay it. That is only fair to those who work hard, do the right thing and deserve to be paid properly. That is what we are trying to do today, and I hope that the Government will support our motion.