Westminster Hall Debate on Low Pay (30 Oct 2013)
William Bain (Glasgow North East, Labour)
It is a pleasure to serve under your chairmanship, Mr Hood.
Growth may be making an overdue return to the UK economy, but the continuing slump in real wages is forecast by the Office for Budget Responsibility to extend into 2014, and the UK currently has the highest inflation rate in the European Union, both of which contribute to the cost of living crisis. The Office for National Statistics confirmed this morning in its November economic brief that real disposable household incomes have not risen in a sustained way under the Government’s policies.
Despite employees working more hours than before the economic crisis began, the recovery is not making its way into the pockets of ordinary workers. Workers in the lower half of the income scale, particularly low-paid workers, are falling even further behind the top 1% of earners in our society. There has never been a more important time for this House to discuss the issue of low pay and how together, as a Parliament and a society, we can tackle what is now a crisis.
As the report of the Social Mobility and Child Poverty Commission recently made clear, poverty pay blights the outcomes in life of millions of men, women and children across our country. Every week, those of us with the honour of representing our great cities such as Glasgow meet those who suffer the effects of being trapped in low pay for long periods. According to the Poverty Alliance, 870,000, or 17%, of the population in Scotland live in poverty. A fifth of all children in Scotland are below the breadline.
This afternoon I will show that low pay is a problem not only in urban parts of the UK; there are pockets of truly shocking poverty in rural parts of Britain, too. If we are to come up with the right answers on low pay, we must first acknowledge how serious and widespread a social evil this now is across our country.
Guy Opperman (Hexham, Conservative)
I congratulate the hon. Gentleman on securing this debate, and I endorse his comment that low pay affects rural areas such as mine as much as urban Glasgow. However, does he accept that the decision to raise tax thresholds provides the best possible support to low-paid workers?
William Bain (Glasgow North East, Labour)
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.
Full text of the debate here: http://www.theyworkforyou.com/whall/?id=2013-10-30a.316.1&s=Poverty#g320.0