Living Wage

Jack Dromey Excerpts

Thursday 3rd November 2016 Commons Chamber

[Jack Dromey (Birmingham, Erdington) (Lab)]

I welcome the Minister to the Front Bench. I congratulate my hon. Friend the Member for Mitcham and Morden (Siobhain McDonagh) on her fierce advocacy of the living wage, and on exposing those who seek to avoid their responsibilities, rightly naming and shaming employers such as Marks & Spencer. She is right that I have met employees in my constituency who are affected in exactly the same way, so I think that the Minister—I say this with respect—will have to be careful not to sound like an apologist for Marks & Spencer. I hope that tomorrow Marks & Spencer will hear this debate and do the right thing.

Fifteen years ago I was a founding member of the drive for the living wage, together with what was then TELCO, which became London Citizens, which became Citizens UK. I ran the organising department of the Transport and General Workers Union. In what was a moral alliance with TELCO, faith groups and community organisations, we organised and won the living wage for 3,000 cleaners in Canary Wharf and the City of London, tackling the obscenity of cleaners on the minimum wage cleaning the toilets and boardrooms of those who earn millions.

Next, I am proud to say that I organised the first ever strike in the history of the House of Commons to win the living wage. I have in my office to this day a cartoon from The Times showing, in a wonderful parody of Black Rod at the state opening of Parliament, a cleaner with a mop in one hand and a bucket in the other, knocking down the doors of this place. We won the living wage.

I am proud to say that Birmingham, the city I represent, is now the most advanced in the country. We have 4,000 directly employed people on the living wage, with cleaners such as Elaine Hook saying it has transformed their lives. She said:

“I can now afford the little things in life that have made such a difference to my life.”

The same is true of care workers, with the council now rolling out the living wage and saying, “Why should we pay the least to those who care for those we love the most?” There is also a whole raft of private sector employers, such as National Express and Aviva, that have said that the living wage is right for them and right for their business.

I say with respect to the Minister, who talks about what we “can’t afford”, that the evidence we now have after 15 years of experience shows that the living wage is good for workers—of that there is no doubt—because it ends working poverty and contributes to the dignity of labour. It is good for the employer and for business in terms of productivity, flexibility and reduced staff turnover. It is good for the family, and I remember one of the Canary Wharf cleaners saying to me, “Mr Jack”—he kept calling me Mr Jack—“previously I had to sleep on buses between jobs. I did between three and four jobs to make ends meet, and I bitterly regretted it because I never saw my kids.” It is good for the local economy, because if the low paid get an increase, they do not salt their money away in Swiss bank accounts; they go out and spend it locally. And it is good for the national economy, because the workers concerned pay more tax and claim less in benefits. Quite simply, it is good for our society, and this is about what kind of country we want to be. The kind of country we need to be to succeed in the 21st century is one with an economy that is not based on low pay and low productivity, but that recognises, crucially, that how we treat workers is vital to the quality of the service they provide and the product they produce.

Three issues have been identified today. First, my hon. Friend was absolutely right to talk about the industry of avoidance, which ranges from bogus self-employment in the gig economy—now exposed by the successful GMB test case last week—to companies such as Fujitsu that should know better. Right now, there is a dispute there involving my union, Unite. Last year, Fujitsu made £85 million in profit; it paid one director £1.4 million. Yet it has been resisting the living wage. Now that it has started—finally—to concede, it has been doing exactly the same as Marks & Spencer, cutting bonuses for the employees concerned. It is a case of now you see it—the living wage—and now you don’t. People lose so much money that they end up worse off. When my hon. Friend the Member for Bishop Auckland (Helen Goodman) said that this was about greed, she was absolutely right.

Secondly, we need to tackle age discrimination. Together with my hon. Friend the Member for Halifax (Holly Lynch), I met those young GMB workers earlier this week. It is simply wrong that someone who can join the Army or get married is not entitled to the living wage until they are 25. That is unacceptable age discrimination, and it needs to end. My hon. Friend quoted Rebecca, and the point that came out of that discussion was that this was somebody who was coming out of university and who had built up all sorts of money they had to pay back, including tuition fees, but who was not able to earn the living wage. In addition, there was Thomas, another young worker. He said:

“In the end I had to take more jobs and borrow money from my family which has now put me into debt, all because my work is apparently worth less than if I was born before 1991.”

That is unacceptable age discrimination, and we are determined to stand up for the young people of this country and their entitlement to the living wage.

Thirdly, this is about the real living wage. With respect to the hon. Member for Kingston and Surbiton (James Berry), who may have had a damascene conversion on these issues, I remind him that the Conservative party resisted the national minimum wage every step of the way, year in, year out. The conversion is welcome, but I need to put history right.

The real living wage matters because, sadly, not least as a consequence of Government policies, we have had a low-wage, low-investment, high-debt economy, in which productivity has stagnated. We have an economy of grotesque contrasts. Andrew Haldane of the Bank of England has exposed that, whereas 30 years ago £10 in every £100 would go on company dividends, the figure is now £60 to £70 in every £100, with labour and investment being increasingly squeezed. Average weekly earnings are not expected to return to pre-crash levels until 2020, following the longest fall in wages since world war two. Between 2007 and 2015, wages in the UK fell by 10.4%—a drop equalled only in Greece. According to the ONS report, 3.9 million people in the UK are in persistent poverty. The Trussell Trust gave out more than 1 million three-day emergency food supplies through a network of 424 food banks in 2015-16.

Working poverty is quite simply shameful in 21st-century Britain. My hon. Friend the Member for Oldham West and Royton (Jim McMahon) was absolutely right to say that we are determined not only to enforce the existing national living wage properly and to prevent employers from taking other money away from employees who enjoy it, but to fight for a higher national living wage and ultimately to win. That is why we have set out a more ambitious approach than the Government of £10 an hour by 2020.

In conclusion, I pay tribute to all the hon. Members who have stood up today for the working poor and a proper living wage. I also pay tribute to the whole range of players from the public and private sectors who have been involved nationwide over the past 15 years, but in particular to Citizens UK. Had it not been for its work, we would not be where we are now. It has made and changed history with an idea that is in our blood in the Labour party, which is that no one should endure working poverty. The dignity of labour is paramount, and that means a wage with which someone can enjoy life with their family and kids, without having to scrimp and save, which has been the case for too long, and which still endures, in this country.