National Living Wage

Lord Hannan of Kingsclere Excerpts

Monday 17th January 2022 Lords Chamber

[Lord Callanan (Con)]

Of course, I completely agree with the noble Baroness that, where it is possible to do so, employers should pay the higher rates for the living wage that she referenced. We want to see as many employers as possible doing that, but when the Low Pay Commission makes recommendations—and it has representations from all sides of the industrial sectors—it takes into account business affordability. I am sure the noble Baroness would not want to see the rise in unemployment that might result from unrealistic increases in the minimum wage.

[Lord Hannan of Kingsclere (Con)]

My Lords, of course, any increase in wages tends to get passed on to customers. Is my noble friend the Minister aware of studies that show that these increases are disproportionately felt by people on low incomes? If you have a higher wage cost which pushes up prices in a fast food joint, it is not generally investment bankers who are impacted. At a time of rising living costs, what assessment have the Government made of the inflationary impact of repeatedly raising the living wage faster than wages generally?

[Lord Callanan (Con)]

My noble friend makes an important point. I am disappointed by some of the responses from the Opposition Benches. As always with these matters, it is a question of getting the balance right. Of course, we all want to see the lowest paid in society paid more—nobody would want to see that more than I would and I am sure my noble friend feels the same way—but we have to bear in mind the importance of considering whether it is affordable for business. That is why we have the independent Low Pay Commission that makes recommendations on the maximum level of increase that can be afforded without undue inflationary impacts and is affordable for business.