Terms and Conditions of Employment

Jayne Kirkham Excerpts

Tuesday 25th March 2025 Commons Chamber

[Yuan Yang]

Yes, that is the case. We have heard such concerns raised throughout history, yet when we look at econometric evidence that looks in hindsight at the actual impact on the economy, we see that there is no discernible impact.

I will whizz through a few different studies. In the United States there is David Card and Alan Krueger’s study, based on the 1992 increase in New Jersey’s minimum wage, the 1988 rise in California’s minimum wage and the federal minimum wage increase the following year. In the European Union there is Tomas Kucera’s 2017 study from 18 countries. In the UK there is Christian van Stolk’s 2017 study. We can go on and on about the evidence, but we can see from the trends that, although these concerns have been raised over time, the outcome is increases in the minimum wage, which is what we are seeking to ensure.

[Jayne Kirkham (Truro and Falmouth) (Lab/Co-op)]

Does my hon. Friend agree that these uplifts are a huge boost for equality, because they benefit women, younger and older workers, workers with disabilities and those from minority ethnic backgrounds more than others?

[Yuan Yang]

I absolutely agree. As the Women’s Budget Group has shown, the measures on the minimum wage in the Employment Rights Bill will disproportionately benefit female workers, who are likely to be paid less than men.

These studies on the minimum wage use econometric methods to confirm what many of us can see in our communities at first hand: that too many people have too long been due a pay rise, and when we make the lowest paid better off, that spending goes back into our high streets and local economies. I would like to see even more studies done, producing better data. That must start with improvements to the labour force survey, which the hon. Member for West Worcestershire and I have discussed on the Treasury Committee, as many organisations have flagged that data as an area of concern.

Today I want to focus on one particular group of low-paid workers who are very significant for me and my constituency of Earley and Woodley: young people. There are around 13,000 undergraduates at the University of Reading, which sits in my constituency, who will be better off because of this new law that raises the minimum wage for 18 to 20-year-olds to £10 an hour. It will mean a record wage boost for that age group, who will see their gross annual earnings rise by £2,500, and for apprentices, too, who are the skilled workers of tomorrow.

I support the Government’s youth guarantee, to ensure that all young people are in education, employment or training. The King’s Trust has found that one in 10 young people outside of education, employment or training have turned down a job because they could not afford the costs associated with it—for example, travel, clothing or childcare. For many young people, a barrier to employment is that it does not pay well enough for them.

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[Chris Law (Dundee Central) (SNP)]

Increases to the national living wage and national minimum wage will always be supported by Scottish National party Members. Indeed, we have been pushing for the UK Government to adopt the real living wage for those of all ages since 2011. Disappointingly, we have to continue to do so, as the Labour party has failed to take the opportunity to do that, now that it is in government.

While we support the changes that are being introduced today, the SNP’s position is clear: we want the real living wage for all workers, not just a politically convenient definition of the living wage that falls short of meeting the actual costs of living, and not just for those who are 21 and over. The Resolution Foundation has the real living wage set at £12.60, whereas this regulation increases the national living wage for workers aged 21 or over from £11.44 to £12.21 per hour. It is evidently still short of where it needs to be.

Furthermore, for those aged between 18 and 21, the national living wage is 18% lower, at £10 per hour. Given that the Minister today said that there would be a consultation looking at the cost of living, can he tell me if rent is 18% lower for those under 21? Do 18-year-olds get a special rate on their electricity bills, or on petrol for their car? Do supermarkets give them an 18% discount?

[Jayne Kirkham]

On that point, will the hon. Member give way?

[Chris Law]

I will not, as I would like to make this point very clear, because it is important. The answer to my questions is obviously no. While I welcome the Minister’s comment that the national living wage may be looked at next year, and may be increased so that there is parity for everybody, we are not there yet. I would like the Government to go further, and I look forward to hearing more about how they will consult on doing so next year.

It is worth noting that in Scotland, the SNP Government have taken proactive steps to ensure that the real living wage is implemented wherever we have control, particularly in our public sector. The Scottish Government have paid all staff within their pay scheme, including NHS staff, the real living wage since 2011—that is 14 years ago. Scotland has the highest proportion of employees paid the living wage of any nation in the UK, with 25% of accredited real living wage employers in the UK based there. The Scottish Government are also providing funding to enable adult social care workers to be paid the living wage, benefiting up to 40,000 care workers, and they are working to ensure that all staff in private nurseries delivering our childcare pledge are paid the real living wage, too.

The Labour Government should demonstrate similar willingness to tackle the scourge of low pay. In their manifesto, they pledged to make changes in line with the real living wage, and to take into account the cost of living, but they have failed, at least today, to do so. They were voted in with a mantra of change, and it is in their power to legislate for the introduction of the real living wage for all, but so far, they have chosen not to. They must go further and adopt the living wage for people irrespective of their age, as the SNP has called on successive Governments to do for the past 14 years.