DRAFT National Minimum Wage (Amendment) REGULATIONS 2017

James Berry Excerpts

Tuesday 14th March 2017 General Committees

[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.

Living Wage

James Berry Excerpts

Thursday 3rd November 2016 Commons Chamber

[James Berry (Kingston and Surbiton) (Con)]

I thank the hon. Member for Mitcham and Morden (Siobhain McDonagh) for bringing the debate to the House. I enjoy working with her on human rights in Sri Lanka, and I enjoyed hearing her comments in the debate. I welcome the speech of the hon. Member for Halifax (Holly Lynch), whom I am following for a second day running.

The national minimum wage was introduced by the Labour Government in 1999 at £3.60 an hour for those aged over 22. Successive increases based on recommendations from the independent Low Pay Commission meant that it reached £6.70 by last year. I commend the Labour Government for introducing the national minimum wage, but this progressive Conservative Government introduced the national living wage, increasing the lowest rate of pay for those aged 25 and over to £7.20 this April, and to £9.35 from April 2020.

That was significant for at least three reasons. First, some had often wrongly characterised the Conservative party as an opponent of statutory minimum wages, which was clearly not the case. Secondly, the 2016 rate represents a 7.5% increase, or a 10.8% year-on-year increase, which is the largest cash increase ever to a living wage. Thirdly, the independent Low Pay Commission concluded that the real value of the new national living wage would restore and surpass the value lost in the economic downturn. I was therefore delighted when the Government announced the national living wage, as were many of my constituents in Kingston and Surbiton who were among the 1.8 million workers in the UK benefiting from the introductory wage increase.

I was concerned about the effect of the national living wage, particularly in sectors such as nursing homes. Members on both sides of the House raise the issue of the high cost to councils of placements in nursing homes, and the high costs to private users of nursing homes, which I thought would only go up if the minimum wage was increased. I discussed that with a number of care home owners in my borough of Kingston, who pointed out that they were either already paying in excess of the then proposed national living wage or planning to do so—there was such a shortage of nurses and healthcare assistants willing to work in nursing homes that they had to pay the additional amount to get quality staff.

[Jim McMahon (Oldham West and Royton) (Lab)]

The hon. Gentleman has started a very curious train of thought. Let us say that the employers had said that the increase would have an impact. Would his view have been that the staff who look after some of the most vulnerable people in his community should not be allowed the increase?

[James Berry]

My concern was that the cost would be passed on to the customer, which would either be the council or private payers, who often have to shell out a huge amount to pay for the care of their parents or loved ones. As it happens, as far as I have seen, that has turned out not to be the case. In fact, I have seen no significant evidence of widespread transfers of the cost of the national living wage to customers.

How have the costs been absorbed? Some companies have absorbed them by taking a hit to their profits. Others are doing the very things that the hon. Member for Mitcham and Morden listed, many of which are absolutely disgraceful—I have no quarrel with her about that. There are other examples of companies forcing staff to buy their own uniforms or pay for their training, which I similarly condemn, as I am sure she would.

What action are the Government taking? First, with minimum wage enforcement, an employee can take their employer to an employment tribunal for breach of contract. Secondly, when there is non-payment of a minimum wage, including the national living wage, the employee can complain to Her Majesty’s Revenue and Customs, which investigates every single case and can require repayment of the underpayment. Following changes made by the Government in April, a fine amounting to 200% of arrears can be levied. There is also provision for naming and shaming, which is popular in this context at least, as 687 companies have been named and shamed so far. As far as I am aware, there have been no complaints of this action not being taken when it has been demanded of HMRC.

What happens when the rule is not breached, but the spirit of it is? I hope that the Government will continue to criticise employers that do not follow the spirit of the rules in exactly the way the hon. Members for Mitcham and Morden and for Halifax and my hon. Friend the Member for Sutton and Cheam (Paul Scully) have taken the opportunity to do today so that we, as customers, can also take direct action by not shopping at Marks & Spencer this Christmas if we are not happy about how it treats its staff.

What we did not hear from the hon. Member for Mitcham and Morden was any suggestion of how the Government could do more to deal with employers who do not behave according to the spirit of the rules without wrapping them up in regulation after regulation. If I had an answer to that, I would certainly give it to the House, but I have not heard of one yet. I am pleased there are regulations in place to tackle those who breach the letter of the rules. I hope that hon. Members and the Government will continue to call out those who breach the spirit of the rules; I will continue to do that, too.

--- Later in debate ---

[Liz McInnes (Heywood and Middleton) (Lab)]

First, I thank my hon. Friend the Member for Mitcham and Morden (Siobhain McDonagh) for securing this debate and for her exceptional work on this issue since the Government’s national living wage took effect. She has campaigned tirelessly for the rights and wages of workers, to make sure companies do not renege on their contractual commitment to the rate of statutory pay by reviewing and diminishing their staff benefit and reward structures. She has held firms such as B&Q and Marks & Spencer to account. They have tried to offset the cost of the national living wage by cutting Sunday pay, bank holiday pay, company pension contributions and unsocial hours. I echo the words of the right hon. Member for Tatton (Mr Osborne): that is not

“in the spirit of the law.”

I commend my hon. Friend’s unshakeable belief in following through on this undertaking, persistently raising this issue inside the Chamber and relentlessly campaigning outside the House. I am sure the thousands of affected workers would also like to thank her, too.

Many of those people are in my constituency. This week, I received a letter from a constituent, Lynn, who works for Marks & Spencer and has done so for 34 years. These are her words:

“I feel I have been blackmailed and threatened to sign the form to accept the small pay-out because I was told I would not receive this; also they would change my contract and that would mean I would have to start working Sundays and work all bank holidays. No matter what they say the loyal long service worker has been sold down the river and threatened.”

Lynn clearly feels that she has been forced into an “agreement”, despite the warm words from the Minister, and that she has been blackmailed—those are her words, not mine. It is disappointing to hear reports like this from employees of stalwarts of our high streets, which really should be striving to be seen as exemplar employers. While all this has been going on, Marks & Spencer has reported a 4.3% increase in profits; the total is £689 million in the UK and £1.1 billion internationally this year alone.

As we are all aware, this week is Living Wage Week—the real living wage, as determined by researchers at Loughborough University, not the Government’s misnamed “national living wage”, which is a new national minimum wage, no more, no less. The real living wage is good for the individual, good for the family, good for society and good for business itself. Two thirds of employers who pay the living wage—the real living wage—reported a significant impact on recruitment and retention. They also saw a sharp fall in absenteeism. More than 80% reported improvements in staff performance. It was my privilege yesterday to visit the living wage event held in Parliament and to talk with many small and medium-sized enterprises about the benefits of having living wage status and what it brings to their businesses. Large companies such as Marks & Spencer could learn a lot from them.

The former Prime Minster said that the genuine living wage was

“an idea whose time has come”,

and yet here we are, six years on of Conservative rule, and it has not been implemented.

[James Berry]

Instead of making tendentious points about the name of this living wage, perhaps the hon. Lady will explain why her party’s manifesto at the last election did not include bringing the living wage up to the level of the London or national living wage?

[Liz McInnes]

I believe that my party’s manifesto championed a decent standard of living for all workers. [Interruption.] I will have to go back to the 2015 manifesto and see what we actually said and get back to the hon. Gentleman.

--- Later in debate ---

[Patricia Gibson (North Ayrshire and Arran) (SNP)]

I thank and congratulate the hon. Member for Mitcham and Morden (Siobhain McDonagh) on bringing this debate forward.

We are celebrating Living Wage Week, which is about raising awareness of the vital need for all those who go out to work to earn enough to meet the cost of living and to applaud those employers who have signed up to this scheme, committing to pay their staff the living wage. Of course I am talking about the real living wage of £8.45 an hour, which has just come into effect. It is not the same as the UK Government’s “pretendy” national living wage, which is set at £7.20 for people over the age of 25.

The national living wage relates to average earnings, not living costs. Therefore, it should not be called the living wage and it is disingenuous to call it so. By contrast, the living wage is calculated according to the basic cost of living and so takes account of adequacy of household incomes for achieving what everybody should aspire to have—an acceptable minimum standard of living. It cannot be too much to ask employers to pay their staff literally enough on which to live.

[James Berry]

Will the hon. Lady give way?

[Patricia Gibson]

I will indeed.