Low Pay

Debate between William Bain and Nia Griffith

Wednesday 30th October 2013 Westminster Hall

[Mr Bain]

I am grateful for that intervention; I will be considering that point later in my speech. However, I must point out to the hon. Gentleman that those on the lowest earnings will not gain a penny from further increases in the personal allowance. I can direct him to the research that the Resolution Foundation has produced on the subject. It has looked at the matter in detail.

There are also issues—I shall also come to this point later—about the effects that universal credit will have, particularly in relation to any future increases in the personal allowance. Sadly, given how the Government are designing the credit, what they give with one hand, they may be taking away with another, and that is an important consideration.

The hon. Gentleman has a good record on the subject. I am sure that is borne out of his own experience in his constituency, where 47% of part-time workers are earning less than a living wage. He is absolutely right to campaign on the subject—more power to him for doing so from the Conservative Benches.

As I grew up in Glasgow, the real life experiences of people paid less than £1 an hour for security work were a scar on my conscience and a powerful spur to action on poverty pay. The success of the minimum wage in raising pay rates for the most disadvantaged working poor households is shown by the fact that the Conservatives who opposed it, and the Liberal Democrats and members of the Scottish National party who did not vote for the legislation, now would not dare abolish it.

Indeed, several Ministers in the Department for Business, Innovation and Skills, including the Secretary of State and the Minister for Skills and Enterprise, who I am pleased to see in his place, claim that they want to build on the success of the national minimum wage. It is important that today we see precisely how the Government anticipate changing the remit of the Low Pay Commission to that end.

According to the latest data from the Office for National Statistics in response to a parliamentary question I recently submitted, the average gross median wage in Britain in 2012 was £405 a week, which is almost 7% down in real terms from 2010. For the low paid, the situation is even more desperate, given that higher energy, housing and food costs affect them with even greater severity.

More worryingly, the argument that having a job is enough on its own to lift a family out of poverty has lost much of its potency, because two thirds of the 3 million children living in poverty in this country today live in households in which at least one adult is in work. October’s rise in the main rate of the national minimum wage to £6.31 an hour was the fourth successive uprating below the rise in prices. The minimum wage has lost a fifth of its value in real terms over the past decade, and we must begin to reverse that.

Under-employment and the low-skilled, low-paid work that has been created in an increasingly hourglass-shaped labour market in the past few years have made the cost of living crisis worse for millions of the working poor. The Resolution Foundation has established that 4.8 million people, or one in five across the UK, earn less than the living wage rate set by the Joseph Rowntree Foundation. That figure is up by 1.4 million in the past four years alone.

[Nia Griffith (Llanelli) (Lab)]

Will my hon. Friend ask the Minister whether, to help all those on the national minimum wage across the UK—including 7% of the Welsh population, some 95,000 people, which is higher than the UK average of 5%—he will seriously consider why the cost of living has eroded the rises in the national minimum wage so quickly in the past two or three years and what he can do about that?

[Mr Bain]

My hon. Friend is right, and she speaks with great passion on behalf of her constituents. Some 57% of her constituents in part-time work earn less than the living wage, so she will be seeing on a weekly basis the real effects of poverty on the living standards of people in Llanelli.

Other analysis that I recently received from the ONS shows that in parts of the north-east of England between a half and two thirds of part-time workers are earning less than the living wage. In parts of Northern Ireland and the south and south-west of England, poverty pay among part-time employees is equally endemic. Even in the constituency of the Secretary of State for Work and Pensions, more than two in every five part-time workers take home less than the living wage. With women more likely to be in part-time work than men, extreme low pay, particularly in the social care sector, represents not only economic injustice but gender inequality.