Inequality

Roberta Blackman-Woods Excerpts

Thursday 27th November 2014 Commons Chamber

[Roberta Blackman-Woods (City of Durham) (Lab)]

I congratulate my right hon. Friend the Member for Oldham West and Royton (Mr Meacher) on securing the debate. It is extremely important that the House should consider the growing inequality in this country and specific measures that might be taken to reduce it.

I start by painting a picture of where we are with inequality, both nationally and in my constituency. We know that about 20% of working households rely on some form of tax credit, which shows that a great many people are in work but are relying on benefits because they are earning very low wages. That is compounded by gender. We know that since 2011, the gender gap in wages has been getting worse, not better. The gap between all women working and all men working is about 18.6%; for those who work full time, it is 14.9%. That means that women earn about 85p for every £1 that a man earns. That is important because although inequality affects large numbers of people across our work force, we must be clear that it affects women more than men.

We also know that 3.5 million children nationally are in poor households. That means that they are unable to afford adequate food or transport or to join in activities with their friends. That demonstrates the huge gap emerging between people at one end of the income spectrum and those who are increasing their wages at the other end. I experience that in my Durham constituency a great deal. Take-home pay in the north-east is less than it is in the rest of the country, so although we can give national figures about people relying on benefits, the problem is much greater in the north-east.

Changes to benefits have had an impact on areas like County Durham, where people are losing about £565 per working-age adult—money is going from people who are working and relying on top-up benefits—but the situation is also worsening for those who are out of work and relying on benefits. This is evidenced daily by the increasing number of people using food banks in my constituency. Indeed, some of the people who run the food bank in Durham talked to me recently about setting up a clothing bank and doing so locally, because they recognise that people sometimes cannot even afford to get to the charity shops in the city centre.

My contention is that a raft of measures need to be taken to reduce inequality. Before we look at them, however, perhaps we could stop for a moment and consider what has happened at the other end of the spectrum. The top 100 executives in the FTSE 100 companies took home as much as 131 times the amount their average employee did, yet only 15 of those companies have committed to pay their employees a living wage. Across the country, increasing numbers of companies pay the living wage, and we should stop and recognise that. There are some really good examples—a number of our universities pay the living wage, as does John Lewis—but trying to dig around and find them is difficult. We should have a list readily available. We need to consider what measures could be taken to reduce the income gap, and why we should do so.

Early in the lifetime of this Government, the Prime Minister was keen on looking at measures of happiness. He wanted us to be able to assess what leads to happiness; perhaps he thought that if we had information on that, it would cheer us all up and we would not spend so much time worrying about austerity. I do not know what has happened to all that work, but we do know that people who live in countries where there is more equality are happier. I want to give some advice to the Prime Minister and his colleagues this afternoon: if he wants to make people more content with their life, he and his Government need to address the growing inequality by insisting that companies adopt the living wage and that we get away from a low-pay, low-quality job economy.

Of course, in any economy we need people to work in the service sector. These are important jobs, but we want a much greater variety of jobs, especially high-value ones requiring higher skills. We need to see a real Government programme to support job creation of that type. That is in great contrast to what is available. In preparing for today’s debate, I looked at the jobs available today on my local Jobcentre website in Durham and the levels of income that they offer. The figures are truly shocking. So many of the jobs available do not even pay the living wage. Indeed, about three quarters pay less than the living wage, with about half paying the minimum wage. The jobs available cover everything from care co-ordinators to receptionists and night care assistants. I think we would all regard a senior night care assistant as an important role with significant responsibilities. The job advertised paid £7.35 an hour. These are simply wages that people are not able to live on, which is why so many people rely on in-work benefits.

We need to challenge our employers in a way that we have not done to date. Why do they think they can take home thousands of pounds a month while not paying the majority of their employees the living wage? I do not know about other hon. Members, but I do not want to live in a country that has such growing inequality. I do not want to live in a country where more and more people cannot afford basic rent. Shelter recently published research that showed that 1 million people took out payday loans just to cover their rent. This is clearly ridiculous in a country such as ours that can do so much better.

This afternoon we are challenging the Government to do more to get employers to pay not only the minimum wage—which they have to do, although some still seem to try to get out of their responsibilities—but a living wage. What do the Government intend to do to encourage the creation of jobs with higher-level skills that pay more and can take us forward to a knowledge-based economy? I also want the Government to challenge the companies that pay huge bonuses and whose directors take home obscene amounts of money to plough more resources into their businesses so that they can be successful and pay a living wage.