Incomes and Prices

Lord Hendy Excerpts

Monday 31st October 2022 Lords Chamber

Asked by

[Lord Hendy]

To ask His Majesty’s Government what steps, if any, they are taking to ensure that incomes keep up with prices.

[Viscount Younger of Leckie (Con)]

My Lords, in March 2022, the Government set out their annual remit to the independent Low Pay Commission, asking it to make recommendations on the next uprating of the national living wage and minimum wage rates by the end of October. The Government will respond in due course, and the new rates will come into effect from April 2023. In addition, the Government announced the energy price guarantee and £37 billion-worth of support for the cost of living in this financial year.

[Lord Hendy (Lab)]

My Lords, I thank the noble Viscount for his reply. The reality is that wages face a catastrophic situation this year. The annual rate of increase in wages, on average, is 7% or 8% less than the average rate of increase in prices. The consequence will be that many will face poverty, hunger and cold, and employers will lose demand for their goods and services. The OECD Employment Outlook 2022, published earlier this year, recommends the enlargement of collective bargaining as the answer to falling wages. Will the noble Viscount and his Government consider this option and join New Zealand and the state of California in adopting the enlargement of collective bargaining?

[Viscount Younger of Leckie (Con)]

First, we are very aware that people across the UK remain very worried about the cost of living—I think the House is very aware of that. The noble Lord raises an interesting idea. Certainly, collective bargaining plays an important part in the representation of workforces in the UK. The noble Lord will know, however, that the Government have accepted the pay recommendations of the independent pay review bodies, which cover the NHS, teachers, police and the Armed Forces, for 2022-23.