DRAFT National Minimum Wage (Amendment) REGULATIONS 2017

Stella Creasy Excerpts

Tuesday 14th March 2017 General Committees

[Jack Dromey (Birmingham, Erdington) (Lab)]

It is a pleasure to serve under your chairmanship, Sir Alan.

We will not oppose the statutory instrument, but it is important that we set out our concerns, including that the proposals do not match the necessary ambition, given the still severe and growing problem of low pay in our country. I was a founder member of the drive for the living wage back in 2002 and 2003, with TELCO—the East London Communities Organisation, which is now called the East London Citizens Organisation. As the head of the Transport and General Workers Union organising department, I helped to organise a campaign to win the then living wage for 4,000 cleaners in Canary Wharf and the City of London, thereby combating the obscenity of those who cleaned the boardrooms and the toilets of bankers earning millions being paid the minimum wage, often with minimum conditions of employment. After that, we organised the cleaners in the House of Commons. Some here will remember the first ever strike in the history of the House of Commons, which I was privileged to organise, to win the living wage for the House of Commons cleaners. It was wrong that those who cleaned this, the mother of Parliaments, should be on the minimum wage.

I have always taken the view that the case for the living wage is a moral case, but it is much more than that. The evidence is that the living wage is good for the worker—of course—and good for the worker’s family, because they typically do not have to do two or three jobs to make ends meet, often not seeing their kids from one day to the next. It is good for the employer, because the evidence is that it contributes to reducing turnover of labour on the one hand and promotes security, flexibility and co-operation on the other. It is good for the local economy, because someone on the living wage typically does not salt their money away in Swiss banks but spends it in the local community; and it is good for the national economy, because the workers concerned pay more in tax and claim less in benefits. The living wage is therefore good for Britain.

We have made real progress in this country. I am proud to say that in the city I represent, Birmingham, the very first action of the incoming Labour council in 2012 was to introduce the living wage for all its employees and then in the schools, and now we have dozens of private sector employers who pay the real living wage, including National Express and its 3,000 employees.

I am bound to say this, Sir Alan, but historically—this does not include the Minister here today—the Conservative party strongly opposed the measures for which we fought for many years, including the introduction of the national minimum wage. Indeed, the current Prime Minister is on record making colourful contributions at various times against the notion of a national minimum wage, in favour once it was introduced of a lower national minimum wage, and in favour of a series of geographical opt-outs from the national minimum wage. However, none other than Cardinal Cormac Murphy-O’Connor, on the great day of St Joseph the Worker’s mass in Westminster Cathedral, addressed a rally afterwards and urged employers and those of all political parties to embrace the living wage, saying that, if they do, in the spirit of the Catholic Church, those who repent shall be forgiven. If the Conservative party has repented of its resolute opposition to the then national minimum wage, that is to be welcomed.

Having said all that, the Government are seeking to hijack the language of the living wage when it is no such thing. It is not a real living wage, as the highly respected Living Wage Foundation has established with the evidence it adduced in favour of £9.75 in London and £8.45 outside London.

[Stella Creasy (Walthamstow) (Lab/Co-op)]

As my hon. Friend mentioned, east London, an area that I am proud to represent, was the birthplace of the living wage movement. Should we not judge this statutory instrument and the concerns that Conservative Members may put forward against the fact that, in this day and age, even in my part of town, 36% of people are paid below the living wage? The Government might talk about a living wage, but perhaps we ought to call in trading standards.

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[Stella Creasy]

I rise to ask a simple question of the Minister that seems to be at the heart of this statutory instrument. What difference does £2 make? That is the difference between what is being proposed and what a living wage actually is. I want to tell the Minister why that £2 makes all the difference to the communities we represent.

We are now living in a country where real wages are still, on average, below what they were a decade ago. It is not only a problem in the metropolitan, gold-plated streets of London, where 60% of our children are living in households that are in poverty. Across our country, whether in Portsmouth, Aldershot, Aberavon, Pontypridd or Bristol, there are families for whom £2 an hour would make all the difference to their problems.

We face a very simple challenge as a country: wages have not kept up with prices. There is too much month left at the end of people’s money. For the families on low wages that the statutory instrument will affect, this kind of change makes all the difference, because it does not include that extra two quid. Young people are cruelly discriminated against by our legislation. I wholeheartedly concur with the hon. Member from Scotland, whose constituency evades me; I am sure it is a wonderful place.

[Neil Gray]

Airdrie and Shotts.

[Stella Creasy]

Exactly. It is completely inconceivable that age rather than proficiency should define someone’s employability.

There is an issue for us here about whether the statutory instrument will help Britain. We have to acknowledge a word that seems to be missing from the Government’s vocabulary but will in fact define these issues: Brexit. Our economic position is so uncertain. The chances are that inflation will continue to rise; that is clear to the Opposition. The question of what difference £2 makes will be all the more important in the years ahead that the legislation provides for.

In 4 million households in this country people are in work but in poverty. The point behind the living wage campaign, which I am so proud to have been a small part of in my part of town in east London, where all the best things come from—I will fight you all for that—is that it is not simply about living to work or working to live, but living a life worth living. That is why having a living wage makes a difference. This is about the cost of living. Just as inflation has risen and wages have not—for the first time wages have not kept up with growth in our country—so the costs of living are extraordinary.

I have the dubious distinction of representing the part of the country with the most estate agents per square mile. My part of town has had the highest rise in house prices of any part of the country. The Minister looks shocked, but Kirstie and Phil are the harbingers of doom for many people in my community because the cost of living, which their wages have to cover, is going up and up. That is why having a real living wage matters. Not having one means that we as a society have to deal with the consequences in a number of ways. We have to try to help people cover the cost of living, keep a roof over their head, feed their kids, put money in their electricity meter and take their kids to school. We also have to deal with the consequences of debt that we are now seeing in our country.

I look at these proposals in the context of the impact: 24% of people in this country now have mental health issues because of their personal finances and 41% of families are worried about their debt and whether their wages are going to cover such costs. One in six of those people is worried because they have borrowed money from a family friend or member. There are real human consequences to not having a real, genuine living wage: families are torn apart.

[Owen Smith]

I am sure my hon. Friend was about to come on to this. She is making a powerful speech and a powerful point about private debt in this country, but was she as gobsmacked as me during the Budget to see that public debt is now scheduled to go up to £1.9 trillion by the end of the spending period? That is a 150% increase in our public debt since the Tories came to power. Does she think for a moment that they can ever again use the line about not saddling our children with debt when they have saddled this country with such debt?

[Stella Creasy]

I was very taken with the point that my hon. Friend made about these regulations in his speech. If the financial director of a company came to their board seven years in a row having got their sums wrong, we would expect somebody to get the sack. The Chancellor and the Prime Minister certainly bear some responsibility for this.

We know that the Government expect private debt to pay the cost of that public debt, so the people who are on low wages and are going to get into more debt because we are not paying them the living wage are the very people who are going to pick up the tab for the debt that my hon. Friend describes. I want to understand why the Minister thinks we should celebrate at this point in time when we see that personal debt is rising.

People are struggling. The 36% of people in my community who are paid less than the living wage need that extra £2. We need them to earn that extra £2 so we do not have to pick up the cost, not just because we are going to face a very expensive bill for Brexit and because of the way in which the Government are managing the public finances but because of the human cost and the effect on talent and creativity. We know that families with children living in poverty struggle harder to achieve. We know that the next generation needs a better shot than the current generation if it is to contribute to the global land of milk and honey that Brexit will deliver for us. We know, therefore, that it is not enough to claim that this is a living wage. Call it a minimum wage. It is wonderful that there has been a damascene conversion to the idea that this is of economic and social benefit, but do not call it a living wage when so many people are not able to live on it.

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[Owen Smith]

rose—

[Stella Creasy]

rose—

[Margot James]

I will give way to the hon. Lady.

[Stella Creasy]

I thank the Minister for giving way. Does she recognise that there is also quite a bit of evidence, given that growth is increasing, that companies are making profits? So what we are seeing now is employers not passing on the benefits of the productivity of employees to the people helping them to make that money. That disconnection between wages and growth is really troubling.

[Margot James]

I am glad that the hon. Lady concedes that the economy is in good shape and that it is indeed growing; I agree with her on that. I am also heartened by the fact that lots of employers are paying people more. In fact, the recent evidence about the national minimum wage is that it has not only protected the wages—the living wage—of people over the age of 25 but hauled the average wages of people younger than that up in its wake. That is because some employers who can afford it accept the point made by the hon. Lady earlier, namely that if they can afford to pay younger people more, they would rather have parity—