National Minimum Wage

Steve McCabe Excerpts

Wednesday 15th January 2014 Commons Chamber

[Steve McCabe (Birmingham, Selly Oak) (Lab)]

I was one of those in 1998 who spent the night here as Conservative Members did everything in their power to try to stop the national minimum wage legislation. Today, they are still warning about employment risk. Only last week the Chancellor talked about his fear that a rise in the minimum wage would jeopardise jobs and risk the recovery. I am afraid that is all too familiar.

We are supposed to believe that there is a new-found enthusiasm for the minimum wage on the Conservative Benches. They are leaking stories to the press that suggest there is a Conservative-Liberal Democrat battle over who will promise a hike in the minimum wage in their 2015 manifestos. Well, they are the coalition. If we are all in it together, give us something on account: give us some of it now.

[Mr David Burrowes (Enfield, Southgate) (Con)]

On support for the living wage, does the hon. Gentleman agree that leading by example is important in the private and public sector, including in Government Departments? Does he recognise that Conservatives have been on the case for a number of years? Boris Johnson, the Mayor of London, has introduced the London living wage in city hall.

[Steve McCabe]

I am a fan of the living wage and I will mention it before I finish.

Forgive me, Mr Deputy Speaker, if I am a little cynical, but there is a consistent thread to Tory opposition. In 1983, they abolished the fair wage resolution. In 1993, they abolished wages councils. It took them until 2005 to give a manifesto commitment to retain the minimum wage. Of course, nobody told the hon. Member for Christchurch (Mr Chope), who has made successive efforts to sabotage it. All of that is probably why only 14% of people think the Tory party best represents low-paid, private sector workers. The sad truth is that the minimum wage has not kept pace with inflation and the early gains have been wiped out. In October, those on the minimum wage got a 12p rise while the Government were busy giving millionaire bankers a tax cut worth £100 million. It is funny how that poses so little threat to the economy. In fact, it apparently poses no threat at all, because they are about to give them another one.

[Mr MacNeil]

Given that the stories of doom about the minimum wage did not amount to anything, does the hon. Gentleman look back with hindsight, as openly and as honestly as he can, and think that the minimum wage could have started on a higher rate without any ill effects?

--- Later in debate ---

[Steve McCabe]

What is absolutely the case is that we should not be listening to people who want to do anything to squeeze it down now.

The real tragedy has been the appalling lack of enforcement. Last year, my hon. Friend the Member for Rhondda (Chris Bryant) pointed out that there had not been a single prosecution for failure to pay the minimum wage between March 2011 and 2013. I am extremely indebted to the Tory party researcher who contacted me to suggest that the figures my hon. Friend used, which were obtained, as I understand it, from a parliamentary question, were not true. There had indeed been a single prosecution: a Mr Kenneth Ikerrunaan was apparently fined £1,000 on 26 February for non-payment of the minimum wage, as part of a multiple charge sheet that included extensive VAT fraud. Lest Government Members think I am being unfair, I will acknowledge the only other prosecution that has come to light, that of a butcher in Sheffield who was fined £700. Some, of course, argue that the fines are not that important because the Inland Revenue can negotiate penalties, but of the 937 cases subject to penalties so far, the average penalty has been less than £600. That is for people who are defrauding their workers of wages running into hundreds of thousands of pounds.

I acknowledge plans to increase the maximum fine because, as we heard earlier, it is absurd that people can be fined more for fly-tipping than failure to pay the minimum wage. It will only make a difference if it is used to deter those who treat this law with contempt, and it will only make a difference when we see those employers named and shamed as the fraudsters they are.

I am pleased that there is some talk about supporting better wages, and I welcome the comments of the director of the CBI, but as well as employers evading their legal responsibilities regarding the minimum wage, it is estimated that nearly 5 million workers in this country do not earn a living wage. I was shocked to discover only last week that the university of Birmingham was refusing to pay 250 of its lowest-paid staff a living wage, but could afford to pay its vice-chancellor a salary increase of £28,000. We need a living wage from those who can afford it, we need an enforcement policy so that the minimum wage can be made a reality, and we need rogue employers who recruit foreign workers to undercut the minimum wage told bluntly that we do not want that kind of business here.