National Minimum Wage

Lord Kinnock Excerpts

Tuesday 1st April 2014 Lords Chamber

[Viscount Younger of Leckie]

I cannot comment on whether there should be another inquiry but it is fair to say that this strays into the territory of poverty. Perhaps I may reassure the House that this Government are very much focusing on poverty, which is very complex. There are all kinds of root causes for poverty, including household food security, and we are looking at this very carefully as well in the light of the national minimum wage.

[Lord Kinnock (Lab)]

Does the Minister share my wry satisfaction at the fact that when I first proposed the national minimum wage as policy, I was roundly condemned by Conservatives yet now we have a Chancellor of the Exchequer who says that he aspires to increase it? Should not the Government take up the suggestion of the right reverend Prelate and begin to replace the national minimum wage with the living wage, which would mean a shift from £6.50 an hour to £7.45 an hour, and by that means begin to compensate the national minimum wage earners—who in real terms have lost £1,000 a year since 2000—and reduce the 9.4 million households which now exist at below the minimum income standard while, in the bargain, saving the Exchequer £5.7 billion a year because of the reduction in the need for the subsidies on which very low wage earners have come to depend?

[Viscount Younger of Leckie]

The noble Lord will know that the Government follow the guidance from the Low Pay Commission and have accepted all its recommendations. The new rate from October, which is a 3% rise in the adult rate, will mean that around 1.25 million low-paid workers will enjoy the biggest cash increase in their pay packets since 2008. As I have said, we encourage all employers to pay above the national minimum wage and to pay the living wage.