DRAFT National Minimum Wage (Amendment) REGULATIONS 2017

Jack Dromey Excerpts

Tuesday 14th March 2017 General Committees

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

It is a pleasure to serve under your chairmanship, Sir Alan.

We will not oppose the statutory instrument, but it is important that we set out our concerns, including that the proposals do not match the necessary ambition, given the still severe and growing problem of low pay in our country. I was a founder member of the drive for the living wage back in 2002 and 2003, with TELCO—the East London Communities Organisation, which is now called the East London Citizens Organisation. As the head of the Transport and General Workers Union organising department, I helped to organise a campaign to win the then living wage for 4,000 cleaners in Canary Wharf and the City of London, thereby combating the obscenity of those who cleaned the boardrooms and the toilets of bankers earning millions being paid the minimum wage, often with minimum conditions of employment. After that, we organised the cleaners in the House of Commons. Some here will remember the first ever strike in the history of the House of Commons, which I was privileged to organise, to win the living wage for the House of Commons cleaners. It was wrong that those who cleaned this, the mother of Parliaments, should be on the minimum wage.

I have always taken the view that the case for the living wage is a moral case, but it is much more than that. The evidence is that the living wage is good for the worker—of course—and good for the worker’s family, because they typically do not have to do two or three jobs to make ends meet, often not seeing their kids from one day to the next. It is good for the employer, because the evidence is that it contributes to reducing turnover of labour on the one hand and promotes security, flexibility and co-operation on the other. It is good for the local economy, because someone on the living wage typically does not salt their money away in Swiss banks but spends it in the local community; and it is good for the national economy, because the workers concerned pay more in tax and claim less in benefits. The living wage is therefore good for Britain.

We have made real progress in this country. I am proud to say that in the city I represent, Birmingham, the very first action of the incoming Labour council in 2012 was to introduce the living wage for all its employees and then in the schools, and now we have dozens of private sector employers who pay the real living wage, including National Express and its 3,000 employees.

I am bound to say this, Sir Alan, but historically—this does not include the Minister here today—the Conservative party strongly opposed the measures for which we fought for many years, including the introduction of the national minimum wage. Indeed, the current Prime Minister is on record making colourful contributions at various times against the notion of a national minimum wage, in favour once it was introduced of a lower national minimum wage, and in favour of a series of geographical opt-outs from the national minimum wage. However, none other than Cardinal Cormac Murphy-O’Connor, on the great day of St Joseph the Worker’s mass in Westminster Cathedral, addressed a rally afterwards and urged employers and those of all political parties to embrace the living wage, saying that, if they do, in the spirit of the Catholic Church, those who repent shall be forgiven. If the Conservative party has repented of its resolute opposition to the then national minimum wage, that is to be welcomed.

Having said all that, the Government are seeking to hijack the language of the living wage when it is no such thing. It is not a real living wage, as the highly respected Living Wage Foundation has established with the evidence it adduced in favour of £9.75 in London and £8.45 outside London.

[Stella Creasy (Walthamstow) (Lab/Co-op)]

As my hon. Friend mentioned, east London, an area that I am proud to represent, was the birthplace of the living wage movement. Should we not judge this statutory instrument and the concerns that Conservative Members may put forward against the fact that, in this day and age, even in my part of town, 36% of people are paid below the living wage? The Government might talk about a living wage, but perhaps we ought to call in trading standards.

--- Later in debate ---

[Jack Dromey]

My hon. Friend makes a powerful point. One can put provisions on the statute book to tackle low pay, but whether that works in practice is another thing altogether.

The proposed living wage will not compensate for cuts to universal credit and other taxation and benefit changes. The 60% figure is arbitrary, and the Government’s proposals continue to discriminate against young people. I used to be chair of the Ministry of Defence trade unions, with a long association with the armed forces. North Birmingham, which I represent, historically has a strong defence culture and is a recruiting ground for the British Army. I know ex-squaddies of 23 or 24 years old who do a three or four-year stint and come out of the Army having fought for their country but not entitled to the full living wage, which simply cannot be right.

The GMB has been absolutely right to argue for an end to unacceptable age discrimination against young people. In addition, there are problems not just about how the wage is defined but, as my hon. Friend the Member for Walthamstow just said, how it is enforced. The Government have been lacklustre in the extreme in taking the necessary steps not just to name and shame but to use leverage and to enforce the law against recalcitrant, bad employers who refuse to pay the living wage. In too many employers, including those that were historically regarded as reputable, such as Marks and Spencer, there has been an industry of avoidance. First, they give the good news, “You get the living wage”—or at least the Government’s definition of it—but then there is the bad news that it is offset against other conditions of employment. My hon. Friend the Member for Mitcham and Morden (Siobhain McDonagh) has done an outstanding job in this place in exposing such practices.

The living wage is a cause about which many of us, as I do with my history, feel passionate. Is it welcome that the debate has moved on from where we were in the ’90s, with resolute opposition from the Conservative party even to a then national minimum wage? Of course it is welcome that some progress has been made. In the real world out there, from which I came, people will benefit as a consequence. Having said all that, the Government’s approach continues to lack ambition, which is why the Labour party has argued, in the strongest possible terms, for moving to a £10 an hour starting point, and then the living wage review body, based on the national minimum wage review mechanisms, can keep future increases under scrutiny.

[James Berry]

(Kingston and Surbiton): The hon. Gentleman is making a powerful speech, but the manifesto on which he stood did not commit to that increase.

[Jack Dromey]

I would caution Conservative Members against praying in aid manifestos. From when I worked for Alperton Carton Company, I remember an individual who would say that something that was false was “as sound as a nine-bob note”. I think that future Conservative manifestos will be interpreted creatively, because it is extraordinary not only that a manifesto commitment on national insurance was broken, but that there then followed an attempt to define it as not having been broken. The hon. Gentleman will forgive me for saying that I place no trust in his manifesto, but I do place trust in our determination to ensure that this country has a proper living wage.

That is all the more important because, sadly, as we have heard in recent times, including in the context of the most recent Budget, the country still faces years of austerity and squeezed living standards. Too many people are struggling to get by and that is why it is essential that we are much more ambitious, as a country and a Parliament, about a real living wage to end working poverty in Britain.