National Living Wage

Liz McInnes Excerpts

Monday 18th April 2016 Commons Chamber

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

I thank my hon. Friend the Member for Mitcham and Morden (Siobhain McDonagh) for bringing this debate to the House and for the sterling work she has done to highlight this important issue. I am sorry that she cannot be here today, and I wish her a speedy recovery. I thank, too, my right hon. Friend the Member for Enfield North (Joan Ryan) for her eloquent introduction to the debate.

I have mixed feelings about the Government’s new living wage. Of course an increase in low-paid workers’ wages is to be welcomed, but what we have here is, in effect, a new national minimum wage. The real living wage, as other Members have mentioned, is set by the Living Wage Foundation and calculated by the centre for research in social policy at Loughborough University. The research looks in detail at what households need in order to have a minimum acceptable standard of living. The Government’s national living wage is not connected to those calculations. The Government rate is based on median earnings while the Living Wage Foundation rate is calculated according to the cost of living—and, at £8.25 an hour outside London and £9.40 inside London, it is considerably higher than the Government version of the living wage.

I have a particular interest in the real living wage. TUC figures published last year showed that my constituency of Heywood and Middleton was the second worst in the north-west for payment of the real living wage, with 40% of workers earning less than that. It would therefore be churlish of me not to welcome the Government’s version of the living wage as a step in the right direction. I wish it were called something different and I wish it were more, but for my constituents and for low-paid workers up and down the country, I welcome what should be a pay rise for around 1.9 million employees.

That is why I am so appalled by the methods used by one of our national retailers, B&Q, to try to wriggle out of paying its workers any more money as a consequence of the introduction of the Government’s new living wage. I almost have to grudgingly admire its ingenuity in the various ways it has employed in attempting to cut other areas of pay in order to save itself from having to pay its workers any more money. B&Q is a well-respected national retailer and it is regrettable to see the company behaving in this manner.

Here I feel I should declare an interest in that my partner is such an avid DIY-er that he contributes substantially to B&Q’s profits, but he, too, was shocked to hear that the staff who serve him so well and so frequently are being treated so shabbily. Thanks to the tireless campaigning of my hon. Friend the Member for Mitcham and Morden, B&Q has now announced a two-year protection period, for which I am grateful. Surely, however, for a major retailer whose parent company, Kingfisher, declared profits of £512 million last year, implementing the new living wage without attempting to offset the costs by cutting other elements of pay would have been the right thing to do and the actions of a good employer.

Yesterday, it was my pleasure to visit the beautiful village of Port Sunlight in the Wirral South constituency. Port Sunlight is a “model village” of architect-designed houses, originally built to house the workers in Lord Lever’s Sunlight soap factory. Lord Lever, a businessman and philanthropist, put into action his belief that good housing ensures a happy and healthy workforce. He also implemented a workplace pension scheme, thus ensuring that his workers could enjoy a comfortable retirement. I cannot help comparing and contrasting the altruism of Lord Lever in the 19th century and early 20th century with the antisocial attitude of some modern businesses, which appear to think only of profit and the shareholder and not of that vital asset, their employees.

However, not all businesses are villains. It was my pleasure recently to attend an event in Parliament, organised by the Living Wage Foundation, which showcased the work of small businesses that had signed up to be accredited living wage employers. Those employers told me that they had a much higher rate of staff satisfaction as a result of becoming living wage employers, and—importantly—that it had improved their status and standing as employers in the community. One of them said to me, “If you can't afford to pay the living wage, then, quite simply, you shouldn’t be in business.” That is a philosophy from which some of our larger employers could learn.

The Government’s tag line for the national living wage is “a step up for Britain”, but some companies are trying to take a step back from their commitments to workers’ rights. Where companies are trying to find a loophole to take remuneration from their employees, I ask all Members on both sides of the House to work together to stop that happening, and to protect low-paid workers. I hope that one outcome of the debate will be the ability of workers who fear that they cannot speak out against the imposition of new contracts for fear of losing their jobs to contact their local Members of Parliament and ask them to stand up and speak out in their support, so that not one constituent loses out as a result of the new so-called living wage. That, surely, was never the intention.