National Minimum Wage

Debate between Rachel Reeves and Gavin Shuker

Wednesday 15th January 2014 Commons Chamber

[Rachel Reeves]

I could not agree more with my hon. Friend. With almost 1 million young people out of work—250,000 of them for more than a year—hitting them further by saying that they should not be entitled to a minimum wage is doubly unfair, cruel and callous.

[Gavin Shuker (Luton South) (Lab/Co-op)]

Is not a further point that there are many threats to wages in rural communities in particular—where the cost of living is higher—not least as a result of this Government’s shameful decision to abolish the Agricultural Wages Board, which protected the pay of many low-paid people?

[Rachel Reeves]

I thank my hon. Friend for that intervention and for his work on these issues as a shadow Environment, Food and Rural Affairs Minister.

Labour Members know that a strengthened minimum wage and practical policies to promote the living wage are essential to building a recovery that works for working people and to securing rising standards of living for the future. That means stronger penalties and effective enforcement against rogue employers who flout the minimum wage. It means plans to restore the value of the minimum wage, which has been lost over the past three and a half years. It means the Government doing their bit to support the campaign for a living wage by setting an example with their own employees and contracts, as Labour councils are doing up and down this country, and it means the Government sharing the savings to the Treasury with employers who commit to paying the living wage, as we will do with our Make Work Pay contracts.

The national minimum wage is one of Labour’s proudest achievements. It was opposed by the Tories every step of the way, while their coalition partners tried to water it down and frustrate its purpose, and the current Business Secretary sat on his hands. That is why we cannot trust the Tories or their Liberal Democrat supporters to protect the minimum wage, why we cannot trust the Tories to enforce or strengthen it, and why we cannot trust them to deal with the cost of living crisis.

It therefore again falls to Labour to protect and strengthen the national minimum wage by increasing fines for those who exploit workers; investigating rogue employers and enforcing the law properly; restoring the value of the national minimum wage and catching up the lost ground of the past three years; and encouraging employers who can do so to go further and to pay the living wage.

I suspect that when the Secretary of State gets to his feet, he will tell us how he now supports the minimum wage and wants it to be increased and to be enforced better. If that is his way of apologising for his past sins, so be it, but I must warn him and his Government that we will be watching. Working people who are struggling to earn a living and to survive the cost of living crisis need more than warm words and liberal promises; they need action, and only a Labour Government will deliver that.

The Economy

Debate between Rachel Reeves and Gavin Shuker

Tuesday 11th December 2012 Commons Chamber

[Rachel Reeves]

There is £212 billion more borrowing under this Government’s plans.

Families will continue to feel the Chancellor’s failure in their wallets and their homes. Average earnings will not outpace inflation until the second quarter of 2014. It will take even longer for families to recover the loss to their living standards that this Government’s economic failure has cost them.

The lack of growth and the increase in borrowing under this Chancellor have meant that he has had to come back and ask the country for more. And who are the Government asking to bear the brunt of the past two and a half years of failure? Luckily, Andrew Neil asked the Chief Secretary to the Treasury that question on BBC1 last Wednesday. He asked him whether

“those who are on ordinary incomes are suffering a lot more than most”.

The Chief Secretary to the Treasury replied: “That is absolutely right.” That was the only sense he spoke all day. It is no surprise that he is increasingly described as the Conservatives’ favourite Liberal Democrat in the Cabinet. Apparently, they regard him as easier to deal with and more persuadable. The Chancellor’s favourite Liberal Democrat has finally told the country what we have known for a long time: that this Government are asking ordinary families to foot the bill for their economic mess.

The facts speak for themselves. Analysis by the House of Commons Library shows that a one-earner family on £20,000 with two children will lose £279 a year from next April. Slide 24 of the Institute for Fiscal Studies report shows that a two-income family with children will lose £534 as a result of the changes, including all the measures in the autumn statement. Slide 17 of the IFS assessment shows that middle and lower earners will lose most as a result of the autumn statement, with the poorest 40% losing more than the richest 10%. How can that be fair? And this is all to pay for the Government’s £212 billion of extra borrowing. They are hurting those who are trying to get on and do the best for themselves and their families. That cannot be fair.

Mothers across the country will be worried about the real-terms cut in maternity pay, worth £180, that the Chancellor announced last Wednesday. That comes on top of other deep cuts that will hit pregnant women on low incomes, such as the abolished Sure Start maternity allowance and the health in pregnancy grant. This is further proof that the Government are out of touch and simply do not understand the pressures families are facing, day in, day out.

[Gavin Shuker]

What assessment has my hon. Friend made of the impact of the changes, particularly those relating to people on low incomes, on the overall growth of the economy? It strikes me that they are exactly the people we ought to be encouraging to spend right now.

[Rachel Reeves]

My hon. Friend is right. It is a false economy to cut the incomes of the lowest paid, because they will have less money to spend in their communities. What really matters, however, is the real impact that the changes will have on their living standards and those of their children.

The Resolution Foundation has said that 60% of the cuts to benefits and tax credits will hit working households—that is, those who are trying to get on in life. Given that the welfare bill is forecast to be £13.6 billion higher in this Parliament than the Chancellor thought it would be—another target tossed aside—perhaps it is time for the Government to concentrate on getting people back to work in order to reduce the welfare bill. In February this year, the former employment Minister, now the Secretary of State for Justice, said:

“The Work Programme is doing a good job and is on track. It is helping long-term unemployed people into work.”

And only today the Chief Secretary to the Treasury said that the scheme was going well, but we now know that for every 100 people who are unemployed, the programme has seen only two people back into work. If that is the Government’s idea of a programme that is on track, I would hate to see one that is not.

It is not surprising that OBR documents released last week showed that the number of people claiming jobseeker’s allowance was set to rise from 1.58 million this year to 1.69 million in 2014, and that the number forecast for 2016 had been revised up by 340,000. That will be a third of a million more people receiving JSA compared with the number forecast in March this year.

Let us not forget that the Prime Minister dismissed the last Labour Government’s future jobs fund, which helped 120,000 young people back into work, yet an impact analysis for the Department for Work and Pensions found that we all gained £7,750 per participant through wages, increased tax receipts and reduced benefit payments. This Government ditched a plan that worked for one that has failed, so we will not be lectured by them on welfare or on job creation.

At the same time, one group of people continue to gain from the Chancellor and the Chief Secretary’s policies. If someone earns more than £1 million a year, next year they will receive an average tax cut worth £107,000. It beggars belief that while taking from families on low incomes with one hand, the Chancellor gives to millionaires with the other—there is one rule for the very richest, another for everyone else.