Living Wage

Jeremy Corbyn Excerpts

Thursday 6th November 2014 Commons Chamber

[Albert Owen (Ynys Môn) (Lab)]

It is a great pleasure to follow the thoughtful speech of my hon. Friend the Member for Birmingham, Erdington (Jack Dromey). I have known and worked with him for many years and know how hard he has fought for those on low wages throughout the country. I congratulate the hon. Member for Warwick and Leamington (Chris White) on the thoughtful way he opened this debate, and the Living Wage campaign on its work. This is the living wage week, which brings together a cross-section of employers, employees, campaigners and communities under the umbrella of Citizens UK.

Unfortunately, low pay and in-work poverty are rising. We all see it in our constituencies. There has been a squeeze on wages. With wages being held down and energy and fuel costs rising, many families are really struggling. As has been said, the next Labour Government will introduce incentive measures to help businesses introduce the living wage through make-work-pay contracts, which is a positive way forward. We need to go back to the pioneering days of 1997 when we as a Government introduced the minimum wage legislation. I raise this as someone who has been involved in low pay issues. Before I was elected to this House, I was a manager of a centre for the unemployed in an area of high unemployment. I saw at first hand how dignity was taken away from people and their families.

When the national minimum wage was first introduced in my area, more than 2,000 families saw their wages doubled. That liberated those people. They went from £1.80 an hour to £3.60 an hour—a huge increase.

I have many friends in small businesses, particularly in the catering industry. They were worried about the impact that this would have on their businesses. But they told me a short period afterwards that their staff who had received this increase in pay were spending more in their premises. There was already a big impact on the economy and unemployment did not go up. I am sorry to have to make some party political points about this, but as an activist I remember the debates in this House when it was said, as the hon. Member for Bedford (Richard Fuller) did, that there would be a huge rise in unemployment. The Leader of the House warned that the minimum wage would increase unemployment by a million. The opposite happened. Employment grew by 1 million, because the economy was stimulated. That economic stimulus has been lacking in the last few years.

Conservative Members have made thoughtful contributions, and I agreed with much of what they said. They talk about raising income tax thresholds, but at the same time they have increased VAT, which is a regressive tax. That disincentivised people from spending in the economy. Let us be honest, if we ask people on that threshold whether they want an adequate living wage so that they can pay income tax to contribute to the welfare state and to services for their families and communities, or to be held down, not paying tax, we know that the answer will be that they want to contribute and pay income tax into a better community and a better society.

We have heard jibes—the hon. Member for Arfon (Hywel Williams) is not here—about Labour lacking ambition. Again, I have to say that when the minimum wage legislation was going through the House, it was not the nationalists who did the heavy lifting. They were absent. I was a candidate at that time and an activist, and in my constituency, Plaid Cymru was saying one thing to the small businesses and another to the trade unions. We have to be brave and bold to lift people out of poverty. The incoming Labour Government set that direction. They raised the minimum wage as part of a suite of measures to encourage businesses and local authorities to do likewise and to pay the living wage throughout the country.

Authorities have to take the lead, and Labour authorities are beginning to do so. For example, Islington and York, which I visit, have living wage zones. This is real action, and the local authorities encourage that. Shop windows in those zones are proud to display the badge worn by many hon. Members today. I do not see many badges in the window saying, “I don’t pay the living wage.” The living wage instils competition and good will, and other businesses follow suit.

[Jeremy Corbyn (Islington North) (Lab)]

I am pleased that my hon. Friend mentioned Islington. My borough council has been assertive in ensuring that all suppliers and contractors pay the living wage, and that has now been achieved in the domiciliary care services and it has a knock-on effect in the wider community. It is a great achievement and I thank my hon. Friend for mentioning it.

[Albert Owen]

I was going to mention only York, but I saw my hon. Friend so I added Islington to the list, having done my research beforehand. He is absolutely right. We all want to incentivise companies to do this. Small businesses do have fears, but we must allay those and give them help.

The tax credit system worked. It became cumbersome and technical and there were problems with it, but it was there to help people into work. At the end of the day, if we want to restore dignity to people throughout the UK, we need a higher living wage for people. In areas, such as my own, on the periphery, the Government have a role. As part of real devolution they can move jobs out. We talk about academic devolution, but real devolution is the Government, where they have a role, moving jobs and paying high wages so that others will follow suit. We will then have less in-work poverty, greater decency and a better society. A living wage improves the country that we are proud to live in.