Age Discrimination: National Living Wage

Jim Shannon Excerpts

Wednesday 8th June 2016 Westminster Hall

[Jim Shannon (Strangford) (DUP)]

I have plenty of thoughts, and I am glad to share them. It is a pleasure to be called to speak in this debate. I enjoyed the setting of the scene by the hon. Member for Halifax (Holly Lynch), whom I congratulate on securing the debate. It is also a pleasure to be one of two males who will contribute.

It is hard to argue with the principle, ideal and intent of the national living wage. We want everyone in our country to have a life free from poverty and a job that compensates them properly for their labour, which is the purpose of the national minimum wage. In Northern Ireland we have some of the highest levels of poverty in the whole United Kingdom, so the minimum wage is an important issue for us.

We are a nation of shopkeepers, and I am descended from a family of shopkeepers. Margaret Thatcher said that we were a nation of shopkeepers—I am not sure whether we are as much as we used to be, but we still have a lot of shopkeepers. As the hon. Lady said, we are debating the principle of rewarding those who put in the graft by getting up to go to work and work hard for their family, but we would not be having this debate if there were not outstanding issues with the minimum wage changes.

We have all heard that small businesses across the country are worried that they will have to pick up costs that they cannot afford and, as a result, may have to lay off workers, who are not just employees but friends and family. That is an important issue. While seeking to improve the wages of people in the 18 to 25 bracket, we have to ensure that the businesses that employ them are able to pay those wages—it is important that we achieve that.

My constituency office—other Members will say the same—has been visited by many 18-year-olds who are setting up home together. That is good, and we want to encourage them, so we help them as best we can with housing. We hope that their wages will be enough for rent, food, heat and enjoying some time together as a young couple starting off. The hon. Member for Glasgow Central (Alison Thewliss) said that an 18-year-old could be doing the same job as a 25-year-old to the same level of expertise and ability but receive a lesser wage, which is grossly unfair.

Evidence from the Association of Convenience Stores shows that it is extremely concerned about the prospect of the national living wage reaching 60% of median earnings, which is currently projected to be £9 an hour. Retailers report that that is likely to change their staffing structures and affect store profitability. Some 25% of shop owners work more than 70 hours a week, and 20% do not take any annual leave. The May 2013 “voice of local shops” survey indicated that a majority of independent retailers, some 55%, believe that they earn less than the national minimum wage when taking into account the hours they work. Shop owners might not be earning the wage they need, but they do it because they have done it all their life and they want to create some employment for those around them. There are other reasons for doing it as well.

The Chancellor has taken that into account and has offset various business costs such as corporation tax and national insurance. The Government are cutting the burden of business rates by some £6.7 billion over the next five years. Provided that that does not affect tax receipts, it is a most welcome move that will help business owners across the country by freeing them of some of the shackles and obstacles that ambitious and striving small and medium-sized enterprises face in their quest to succeed and expand. The national living wage will hopefully not have the impact that SMEs once feared, but only time will tell. We will see how that works.

It is easy to jump to the assumption that there may be a form of discrimination, as the hon. Member for Glasgow Central said. Many of us feel that there might be discrimination, and in some cases there may well be blatant discrimination. It is about getting fairness so that people get a wage that reflects their labour and the sweat on their brow. That is what I am keen to see. There are mortgages or rent to pay, as well as childcare costs, family expenses and possibly pension savings, because now when people get a job they are often entered into a pension scheme almost straight away; indeed, people are encouraged to join pension schemes, by the Government among others. It is also important to have a pound or two set back for a rainy day. The hon. Lady referred to her grandmother. My grandmother and my mother are the same in this regard; they always had a pound or two set back for a rainy day, or the “what if?” category. When something goes wrong, it is good to be prepared for it.

Those are just a few of the costs that people have to factor in after being paid as they get older. Before the national living wage, people on the old-style minimum wage also factored those things in. It is true that there are some 21 to 24-year-olds who have all those expenses and more, which why it is important and welcome that the Low Pay Commission will continue to monitor, evaluate and review pay conditions for younger workers when it makes recommendations for future changes to the national living wage. I am keen to hear the Minister’s response to the debate, particularly on how he sees the Government monitoring, evaluating and reviewing those conditions. If those conditions are not right, what will happen?

The fact that changes to the national living wage are possible shows that there is room for movement. I believe that the Government have created some flexibility for the changing, adaptation and correction of the national living wage; the Minister will confirm whether that is the case or not. I hope that what is on the table now will not be, by any means, the end goal. There have to be some possibilities for movement, to secure better conditions for those on the minimum wage.

It is important that we do not disadvantage anyone financially in all of this activity, but at the same time we cannot disadvantage those who need the wage increase the most and those who are trying to get on in their life. Let us encourage our young people. That is why we are here; that is why we are MPs. We want to encourage our constituents, and our young people in particular. There needs to be careful monitoring of how the national living wage plays out in reality for those in the lower pay brackets, to ensure that no one is being disadvantaged by the structures.

I conclude by saying that close monitoring of the situation should allow for appropriate adjustments to be made. It is imperative that it continues in the future and that all essential amendments are made in a timely fashion, to ensure that the national living wage is the success that the Government, the hon. Member for Halifax and the rest of us here today want it to be.

[Geraint Davies (in the Chair)]

I want to begin calling the Front-Bench spokespersons at 5.20 pm, so I invite Liz McInnes to speak for eight minutes or so.